John J. Cahill Jr., director of the office of administration of the State Highway Administration, died Friday at a hospital in Pittsburgh, where he had gone for treatment of leukemia.

He was 59 and lived in Round Bay.

Services for Mr. Cahill were being held today at St. Margaret's Episcopal Church, 1601 Pleasant Plains Road in St. Margarets.

A state employee for 20 years, he did administrative work for the Department of Health and Mental Hygiene for a time before joining the highway agency.

A native of Paterson, N.J., he held an electrical engineering degree from the Massachusetts Institute of Technology and a master's degree in business administration from the University of Michigan.

He is survived by his wife, the former Anna May Ryon; a daughter, Susan Betts Taylor of Virginia Beach, Va.; a son, John J. Cahill 3rd of Chester; his father, John J. Cahill Sr. of Oceanside, Calif.; a brother, Donald A. Cahill of Chalfont, Pa.; and four grandchildren.

The family suggested memorial contributions to the bone marrow transplant fund of the West Penn Hospital in Pittsburgh.