  The self--energy of the strange baryon $\Lambda$ in $^{17}$O is calculated
using a microscopic many--body approach which accounts for correlations beyond
the mean--field or Hartree--Fock approximation. The non-locality and
energy-dependence of the $\Lambda$ self--energy is discussed and the effects on
the bound and scattering states are investigated. For the nucleon--hyperon
interaction, we use the potential models of the J\"{u}lich and Nijmegen groups.
