UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-QSB

           Quarterly Report Under Section 13 or 15(d)
             of The Securities Exchange Act of 1934

              For the Quarter Ended:  June 30, 2007

               Commission file number:  000-51823


                   AEI INCOME & GROWTH FUND 26 LLC
(Exact Name of Small Business Issuer as Specified in its Charter)


      State of Delaware                    41-2173048
(State or other Jurisdiction of         (I.R.S. Employer
Incorporation or Organization)        Identification No.)


    30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
             (Address of Principal Executive Offices)

                         (651) 227-7333
                   (Issuer's telephone number)


                        Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)

Check  whether  the issuer (1) filed all reports required  to  be
filed by Section 13 or 15(d) of the Exchange Act during the  past
12  months  (or  for such shorter period that the registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.        Yes [X]  No

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).  Yes      No [X]

Transitional Small Business Disclosure Format:   Yes      No [X]


                 AEI INCOME & GROWTH FUND 26 LLC


                              INDEX


PART I. Financial Information

 Item 1. Balance Sheet as of June 30, 2007 and December 31, 2006

         Statements for the Periods ended June 30, 2007 and 2006:

            Income

            Cash Flows

            Changes in Members' Equity (Deficit)

         Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

 Item 3. Controls and Procedures

PART II. Other Information

 Item 1. Legal Proceedings

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 Item 3. Defaults Upon Senior Securities

 Item 4. Submission of Matters to a Vote of Security Holders

 Item 5. Other Information

 Item 6. Exhibits

         Signatures


<PAGE>
                 AEI INCOME & GROWTH FUND 26 LLC
                          BALANCE SHEET
               JUNE 30, 2007 AND DECEMBER 31, 2006

                           (Unaudited)

                             ASSETS

                                                    2007          2006
CURRENT ASSETS:
  Cash and Cash Equivalents                     $ 4,296,234   $   151,644
  Receivables                                         2,390             0
                                                 -----------   -----------
      Total Current Assets                        4,298,624       151,644
                                                 -----------   -----------
INVESTMENTS IN REAL ESTATE:
  Land                                            2,036,625     2,036,625
  Buildings and Equipment                         5,508,375     5,508,375
  Accumulated Depreciation                         (193,191)      (83,023)
                                                 -----------   -----------
      Net Investments in Real Estate              7,351,809     7,461,977
                                                 -----------   -----------
           Total  Assets                        $11,650,433   $ 7,613,621
                                                 ===========   ===========

                       LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.          $    37,946   $    86,504
  Distributions Payable                             154,415        87,919
  Unearned Rent                                       5,973             0
                                                 -----------   -----------
      Total Current Liabilities                     198,334       174,423
                                                 -----------   -----------
MEMBERS' EQUITY (DEFICIT):
  Managing Members                                   (4,753)       (1,278)
  Limited Members, $10 per Unit;
   10,000,000 Units authorized;
   1,365,974 and 882,127 Units issued and
   outstanding in 2007 and 2006, respectively    11,456,852     7,440,476
                                                 -----------   -----------
      Total Members' Equity                      11,452,099     7,439,198
                                                 -----------   -----------
        Total Liabilities and Members' Equity   $11,650,433   $ 7,613,621
                                                 ===========   ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 26 LLC
                       STATEMENT OF INCOME
                  FOR THE PERIODS ENDED JUNE 30

                           (Unaudited)

                              Three Months Ended       Six Months Ended
                             6/30/07      6/30/06     6/30/07      6/30/06

INCOME:
   Rent                   $   146,473  $    42,893  $   289,846  $    42,893
   Miscellaneous Income             0        6,199            0        6,199
                            ----------  -----------  -----------  -----------
        Total Income          146,473       49,092      289,846       49,092
                            ----------  -----------  -----------  -----------
EXPENSES:
    LLC  Administration -
      Affiliates               26,628        7,957       49,385        9,171
   LLC Administration and
     Property Management  -
     Unrelated  Parties         7,504          774       12,979        2,274
    Depreciation               55,084       15,360      110,168       15,360
                            ----------  -----------  -----------  -----------
        Total Expenses         89,216       24,091      172,532       26,805
                            ----------  -----------  -----------  -----------

OPERATING INCOME               57,257       25,001      117,314       22,287

OTHER INCOME:
   Interest Income             35,358          343       45,027          344
                            ----------  -----------  -----------  -----------
NET INCOME                 $   92,615  $    25,344  $   162,341  $    22,631
                            ==========  ===========  ===========  ===========

NET INCOME ALLOCATED:
   Managing Members        $    2,778  $     3,392  $     4,870  $       679
   Limited Members             89,837       21,952      157,471       21,952
                            ----------  -----------  -----------  -----------
                           $   92,615  $    25,344  $   162,341  $    22,631
                            ==========  ===========  ===========  ===========

NET INCOME PER LLC UNIT    $      .08  $       .09  $       .15  $       .09
                            ==========  ===========  ===========  ===========

Weighted  Average Units
  Outstanding               1,198,264      249,141    1,079,253      249,141
                            ==========  ===========  ===========  ===========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 26 LLC
                     STATEMENT OF CASH FLOWS
             FOR THE SIX-MONTH PERIODS ENDED JUNE 30

                           (Unaudited)

                                                       2007        2006

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                     $   162,341   $    22,631

   Adjustments To Reconcile Net Income
   To Net Cash Provided By Operating Activities:
     Depreciation                                     110,168        15,360
     Increase in Receivables                           (2,390)      (42,926)
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                     (48,558)      123,374
     Increase in Unearned Rent                          5,973             0
                                                   -----------   -----------
        Total Adjustments                              65,193        95,808
                                                   -----------   -----------
        Net Cash Provided By
            Operating Activities                      227,534       118,439
                                                   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                               0    (3,252,141)
                                                   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Capital Contributions from Limited Members       4,838,469     3,839,578
   Organization and Syndication Costs                (709,751)     (570,640)
   Increase in Distributions Payable                   66,496        32,106
   Distributions to Members                          (278,158)      (32,106)
                                                   -----------   -----------
        Net Cash Provided By
            Financing Activities                    3,917,056     3,268,938
                                                   -----------   -----------
NET INCREASE IN CASH
   AND CASH EQUIVALENTS                             4,144,590       135,236

CASH AND CASH EQUIVALENTS, beginning of period        151,644         1,004
                                                   -----------   -----------
CASH AND CASH EQUIVALENTS, end of period          $ 4,296,234   $   136,240
                                                   ===========   ===========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 26 LLC
        STATEMENT OF CHANGES IN MEMBERS' EQUITY (DEFICIT)
                  FOR THE PERIODS ENDED JUNE 30

                           (Unaudited)


                                                                  Limited
                                                                   Member
                             Managing    Limited                   Units
                             Members     Members      Total     Outstanding


BALANCE, December 31, 2005  $ 1,004  $         0   $     1,004             0

  Capital Contributions           0    3,839,578     3,839,578     383,957.8

  Organization and
    Syndication Costs             0     (570,640)     (570,640)

  Distributions                (963)     (31,143)      (32,106)

  Net Income                    679       21,952        22,631
                             -------  -----------   -----------  ------------
BALANCE, June 30, 2006      $   720  $ 3,259,747   $ 3,260,467     383,957.8
                             =======  ===========   ===========  ============


BALANCE, December 31, 2006  $(1,278) $ 7,440,476   $ 7,439,198     882,126.8

  Capital Contributions           0    4,838,469     4,838,469     483,846.9
  Organization and
  Syndication Costs               0     (709,751)     (709,751)

  Distributions              (8,345)    (269,813)     (278,158)

  Net Income                  4,870      157,471       162,341
                             -------  -----------   -----------  ------------
BALANCE, June 30, 2007      $(4,753) $11,456,852   $11,452,099   1,365,973.7
                             =======  ===========   ===========  ============



 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 26 LLC
                  NOTES TO FINANCIAL STATEMENTS
                          JUNE 30, 2007

                           (Unaudited)

(1)  The  condensed  statements included herein have been  prepared
     by  the  Company,  without audit, pursuant to  the  rules  and
     regulations  of  the Securities and Exchange  Commission,  and
     reflect   all  adjustments  which  are,  in  the  opinion   of
     management,  necessary to a fair statement of the  results  of
     operations for the interim period, on a basis consistent  with
     the  annual audited statements.  The adjustments made to these
     condensed   statements  consist  only  of   normal   recurring
     adjustments.   Certain information, accounting  policies,  and
     footnote    disclosures   normally   included   in   financial
     statements  prepared  in  accordance with  generally  accepted
     accounting principles have been condensed or omitted  pursuant
     to  such  rules and regulations, although the Company believes
     that  the  disclosures  are adequate to make  the  information
     presented   not  misleading.   It  is  suggested  that   these
     condensed  financial  statements be read in  conjunction  with
     the  financial  statements  and  the  summary  of  significant
     accounting  policies  and  notes  thereto  included   in   the
     Company's latest annual report on Form 10-KSB.

(2)  Organization -

     AEI  Income  & Growth Fund 26 LLC (the Company),  a  Limited
     Liability  Company, was formed on March 14, 2005 to  acquire
     and  lease commercial properties to operating tenants.   The
     Company's operations are managed by AEI Fund Management XXI,
     Inc.  (AFM),  the Managing Member.  Robert P.  Johnson,  the
     President  and sole director of AFM, serves as  the  Special
     Managing  Member.  AFM is a wholly owned subsidiary  of  AEI
     Capital  Corporation of which Mr. Johnson  is  the  majority
     shareholder.  AEI Fund Management, Inc. (AEI), an  affiliate
     of  AFM, performs the administrative and operating functions
     for the Company.

     The  terms of the offering call for a subscription price  of
     $10 per LLC Unit, payable on acceptance of the offer.  Under
     the  terms of the Operating Agreement, 10,000,000 LLC  Units
     are  available for subscription which, if fully  subscribed,
     will  result  in  contributed Limited  Members'  capital  of
     $100,000,000.  The Company commenced operations on April  3,
     2006   when  minimum  subscriptions  of  150,000  LLC  Units
     ($1,500,000)  were accepted.  At June 30, 2007,  1,365,973.7
     Units  ($13,659,737)  were subscribed and  accepted  by  the
     Company.   The Managing Members have contributed capital  of
     $1,000.  The Company shall continue until December 31, 2055,
     unless  dissolved, terminated and liquidated prior  to  that
     date.

     During operations, any Net Cash Flow, as defined, which  the
     Managing Members determine to distribute will be distributed
     97%  to  the Limited Members and 3% to the Managing Members.
     Distributions to Limited Members will be made  pro  rata  by
     Units.

                 AEI INCOME & GROWTH FUND 26 LLC
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(2)  Organization - (Continued)

     Any  Net  Proceeds  of Sale, as defined, from  the  sale  or
     financing of properties which the Managing Members determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner: (i) first,  99%  to  the
     Limited  Members  and 1% to the Managing Members  until  the
     Limited  Members  receive  an amount  equal  to:  (a)  their
     Adjusted  Capital Contribution plus (b) an amount  equal  to
     6.5%  of  their  Adjusted  Capital Contribution  per  annum,
     cumulative  but not compounded, to the extent not previously
     distributed  from Net Cash Flow; (ii) any remaining  balance
     will  be distributed 90% to the Limited Members and  10%  to
     the  Managing Members.  Distributions to the Limited Members
     will be made pro rata by Units.

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated 97% to the Limited Members and 3% to the  Managing
     Members.   Net losses from operations will be allocated  99%
     to the Limited Members and 1% to the Managing Members.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with  the Operating Agreement  as  follows:  (i)
     first,  to  those  Members with deficit  balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the  Limited  Members
     and  1%  to the Managing Members until the aggregate balance
     in  the Limited Members' capital accounts equals the sum  of
     the Limited Members' Adjusted Capital Contributions plus  an
     amount equal to 6.5% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated;  (iii)  third,  the  balance  of  any
     remaining  gain  will then be allocated 90% to  the  Limited
     Members  and  10% to the Managing Members.  Losses  will  be
     allocated 99% to the Limited Members and 1% to the  Managing
     Members.

     The  Managing Members are not required to currently  fund  a
     deficit capital balance.  Upon liquidation of the Company or
     withdrawal  by a Managing Member, the Managing Members  will
     contribute to the Company an amount equal to the  lesser  of
     the  deficit balances in their capital accounts or 1.01%  of
     the  total capital contributions of the Limited Members over
     the amount previously contributed by the Managing Members.

(3)  Investments in Real Estate -

     During  the second quarter of 2006, the Company purchased  a
     40%  interest  in a Sports Authority (formerly Gart  Sports)
     store  in  Wichita, Kansas for $2,230,753.  The property  is
     leased  to TSA Stores, Inc. under a Lease Agreement  with  a
     remaining  primary term of 11 years and initial annual  rent
     of  $186,059.   The remaining interest in the  property  was
     purchased  by AEI Income & Growth Fund 25 LLC, an  affiliate
     of the Company.

                 AEI INCOME & GROWTH FUND 26 LLC
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(3)  Investments in Real Estate - (Continued)

     On  June 1, 2006, the Company purchased a 55% interest in an
     Advance Auto Parts store in Middletown, Ohio for $1,022,289.
     The property is leased to Advance Stores Company, Inc. under
     a  Lease  Agreement with a remaining primary  term  of  13.2
     years  and  initial annual rent of $71,679.   The  remaining
     interest  in  the  property was purchased by  AEI  Income  &
     Growth Fund 24 LLC, an affiliate of the Company.

     On  September 21, 2006, the Company purchased a 37% interest
     in  an  Applebee's restaurant in Indianapolis,  Indiana  for
     $1,130,049.  During the fourth quarter of 2006, the  Company
     purchased  the remaining 63% interest in this  property  for
     $1,924,138.  The property is leased to Apple Indiana II  LLC
     under a Lease Agreement with a primary term of 20 years  and
     initial annual rent of $220,262.

     On  December 29, 2006, the Company purchased a 40%  interest
     in  an Applebee's restaurant in Crawfordsville, Indiana  for
     $1,237,771.  The property is leased to Apple Indiana II  LLC
     under a Lease Agreement with a primary term of 20 years  and
     initial  annual rent of $89,289.  The remaining interest  in
     the  property was purchased by AEI Income & Growth Fund XXII
     Limited Partnership, an affiliate of the Company.

     The  Sports  Authority store, the Applebee's  restaurant  in
     Crawfordsville,  Indiana  and  the  63%  interest   in   the
     Applebee's   restaurant   in  Indianapolis,   Indiana   were
     purchased  from  AEI Fund Management XVII, Inc.  (AFMX),  an
     affiliate  of the Managing Members.  In order to  facilitate
     the  Company's  purchase of these property  interests,  AFMX
     purchased the properties from unrelated third parties.   For
     property  interests purchased from AFMX, the price  paid  by
     the  Company  was equal to the price paid by AFMX  plus  the
     expenses  incurred to transfer ownership of the property  to
     the  Company,  which  were minimal.  There  was  no  benefit
     arising  out of the transactions to the Managing Members  or
     their affiliates apart from compensation otherwise permitted
     by the Operating Agreement.

     Subsequent  to  June  30,  2007,  the  Company  purchased  a
     Starbucks  store  in  Bluffton,  Indiana  for  approximately
     $1,120,000.  The property is leased to Starbucks Corporation
     under a Lease Agreement with a primary term of 10 years  and
     initial annual rent of $79,800.

(4)  Payable to AEI Fund Management, Inc. -

     AEI  Fund  Management, Inc. performs the administrative  and
     operating  functions for the Company.  The  payable  to  AEI
     Fund   Management  represents  the  balance  due  for  those
     services.    This  balance  is  non-interest   bearing   and
     unsecured  and  is  to  be  paid in  the  normal  course  of
     business.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS.

        The Management's Discussion and Analysis contains various
"forward  looking  statements"  within  the  meaning  of  federal
securities  laws  which  represent management's  expectations  or
beliefs  concerning future events, including statements regarding
anticipated  application of cash, expected  returns  from  rental
income,  growth  in  revenue, the sufficiency  of  cash  to  meet
operating  expenses, rates of distribution,  and  other  matters.
These,  and other forward looking statements made by the Company,
must be evaluated in the context of a number of factors that  may
affect   the   Company's  financial  condition  and  results   of
operations, including the following:

    Market and economic conditions which affect the value
    of the properties the Company owns and the cash from
    rental income such properties generate;

    the federal income tax consequences of rental income,
    deductions, gain on sales and other items and the
    effects of these consequences for Members;

    resolution by the Managing Members of conflicts with
    which they may be confronted;

    the success of the Managing Members of locating
    properties with favorable risk return characteristics;

    the effect of tenant defaults; and

    the condition of the industries in which the tenants of
    properties owned by the Company operate.

The Application of Critical Accounting Policies

        The  preparation  of  the Company's financial  statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses to the Company as opposed to other funds they manage.

        The Company purchases properties and records them in  the
financial statements at the lower of cost or estimated realizable
value.   The  Company  initially records the properties  at  cost
(including  capitalized acquisition expenses).   The  Company  is
required   to  periodically  evaluate  the  carrying   value   of
properties  to  determine  whether  their  realizable  value  has
declined.   For  properties the Company will  hold  and  operate,
management   determines  whether  impairment  has   occurred   by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        AEI  Fund Management, Inc. allocates expenses to each  of
the  funds  they manage primarily on the basis of the  number  of
hours  devoted  by their employees to each fund's affairs.   They
also  allocate  expenses at the end of each month  that  are  not
directly related to a fund's operations based upon the number  of
investors  in the fund and the fund's capitalization relative  to
other  funds they manage.  The Company reimburses these  expenses
subject  to  detailed  limitations  contained  in  the  Operating
Agreement.

        Management  of the Company has discussed the  development
and   selection  of  the  above  accounting  estimates  and   the
management  discussion  and analysis disclosures  regarding  them
with the managing member of the Company.

Results of Operations

        The  Company was organized on March 14, 2005.  From  this
date  until the initial subscription proceeds of $1,932,316  were
released  from escrow on April 3, 2006, the Company had  received
only  $1,000  of  capital  from the  Managing  Members,  had  not
conducted any business operations other than those related to the
offering and sale of Units, and had not admitted any investors as
Limited Members.

        For  the  six  months ended June 30,  2007,  the  Company
recognized rental income of $289,846, representing rent from four
properties.  At June 30, 2007, the scheduled annual rent for  the
four properties was $585,895.  For the six months ended June  30,
2006,   the   Company  recognized  rental  income   of   $42,893,
representing rent from two properties acquired during the period.

        For  the  six  months ended June 30, 2007 and  2006,  the
Company  incurred  LLC  administration expenses  from  affiliated
parties    of   $49,385   and   $9,171,   respectively.     These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements  and correspondence to the Limited Members.   During
the  same  periods,  the Company incurred LLC administration  and
property  management expenses from unrelated parties  of  $12,979
and   $2,274,  respectively.   These  expenses  represent  direct
payments  to  third  parties for legal and  filing  fees,  direct
administrative costs, outside audit costs, taxes,  insurance  and
other property costs.

        For  the  six  months ended June 30, 2007 and  2006,  the
Company   recognized  interest  income  of  $45,027   and   $344,
respectively,  mainly  from  subscription  proceeds   temporarily
invested  in  a  money market account.  In 2007, interest  income
increased  due  to the Company having more money  invested  in  a
money market account due to the sale of additional LLC Units.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   In addition, leases may contain  rent  clauses
which  entitle the Company to receive additional rent  in  future
years if gross receipts for the property exceed certain specified
amounts.   Increases  in sales volumes of  the  tenants,  due  to
inflation  and  real sales growth, may result in an  increase  in
rental  income over the term of the leases.  Inflation  also  may
cause the real estate to appreciate in value.  However, inflation
and  changing prices may have an adverse impact on the  operating
margins  of  the  properties' tenants, which could  impair  their
ability  to  pay rent and subsequently reduce the Net  Cash  Flow
available for distributions.

Liquidity and Capital Resources

        The  Company's primary sources of cash are proceeds  from
the  sale  of Units, interest income, rental income and  proceeds
from  the  sale  of  property.  Its  primary  uses  of  cash  are
investment  in real properties, payment of expenses  involved  in
the sale of Units, the management of properties, the organization
and   administration  of  the  Company,  and   the   payment   of
distributions.

        The  Company  generated $227,534 of cash from  operations
during  the  six  months  ended June 30, 2007,  representing  net
income  of  $162,341  and  a non-cash  expense  of  $110,168  for
depreciation,  which  were partially offset  by  $44,975  of  net
timing differences in the collection of payments from the tenants
and  the payment of expenses.  The Company generated $118,439  of
cash  from operations during the six months ended June 30,  2006,
representing net income of $22,631, a non-cash expense of $15,360
for  depreciation  and $80,448 of net timing differences  in  the
collection  of  payments  from the tenants  and  the  payment  of
expenses.

        The  major  components of the Company's  cash  flow  from
investing activities are investments in real estate and  proceeds
from  the sale of real estate.  During the six months ended  June
30,  2007,  the  Company did not purchase  any  real  properties.
During  the  year  ended December 31, 2006, the Company  expended
$7,545,000 to invest in real properties (inclusive of acquisition
expenses).   During  the  second quarter  of  2006,  the  Company
purchased  a  40% interest in a Sports Authority  (formerly  Gart
Sports)  store  in Wichita, Kansas for $2,230,753.   On  June  1,
2006,  the  Company purchased a 55% interest in an  Advance  Auto
Parts store in Middletown, Ohio for $1,022,289.  On September 21,
2006,  the  Company  purchased a 37% interest  in  an  Applebee's
restaurant  in Indianapolis, Indiana for $1,130,049.  During  the
fourth  quarter of 2006, the Company purchased the remaining  63%
interest in this property for $1,924,138.  On December 29,  2006,
the  Company purchased a 40% interest in an Applebee's restaurant
in Crawfordsville, Indiana for $1,237,771.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        The Sports Authority store, the Applebee's restaurant  in
Crawfordsville,  Indiana and the 63% interest in  the  Applebee's
restaurant in Indianapolis, Indiana were purchased from AEI  Fund
Management  XVII,  Inc.  (AFMX), an  affiliate  of  the  Managing
Members.  In order to facilitate the Company's purchase of  these
property  interests, AFMX purchased the properties from unrelated
third  parties.  For property interests purchased from AFMX,  the
price  paid  by the Company was equal to the price paid  by  AFMX
plus  the expenses incurred to transfer ownership of the property
to the Company, which were minimal.  There was no benefit arising
out  of  the  transactions  to  the  Managing  Members  or  their
affiliates  apart  from compensation otherwise permitted  by  the
Operating Agreement.

       During the offering of Units, the Company's primary source
of  cash  flow will be from the sale of LLC Units.   The  Company
commenced  the  offering of LLC Units to  the  public  through  a
registration statement that became effective October 20, 2005 and
will  continue until October 19, 2007, unless all 10,000,000  LLC
Units are sold before then.  The registration statement indicated
that  the  Company would not be capitalized, and all subscription
funds  would  be held in escrow, until the Company  had  received
subscriptions  for  150,000  Units  ($1,500,000).   The   Company
obtained subscriptions for the 150,000 Units required for release
of  escrow  proceeds and on April 3, 2006, the  Company  accepted
subscriptions  for  193,231.6 Units  for  aggregate  proceeds  of
$1,932,316.  Through June 30, 2007, the Company raised a total of
$13,659,737   from   the   sale  of  1,365,973.7   Units.    From
subscription   proceeds,  the  Company  paid   organization   and
syndication  costs (which constitute a reduction of  capital)  of
$2,016,768.

        After  completion of the acquisition phase, the Company's
primary  use of cash flow is distribution and redemption payments
to   Members.    The  Company  declares  its  regular   quarterly
distributions  before  the  end of  each  quarter  and  pays  the
distribution in the first ten days after the end of each quarter.
For  the  six  months ended June 30, 2007, the  Company  declared
distributions of $278,158, which were distributed 97% to  Limited
Members and 3% to the Managing Members.

        Beginning  in  April 2009, the Company may acquire  Units
from  Limited  Members  who  have tendered  their  Units  to  the
Company.  Such Units may be acquired at a discount.  The  Company
will not be obligated to purchase in any year more than 2% of the
total number of Units outstanding on January 1 of such year.   In
no  event shall the Company be obligated to purchase Units if, in
the  sole discretion of the Managing Member, such purchase  would
impair the capital or operation of the Company.

        The  Operating Agreement requires that all proceeds  from
the  sale  of Units, subject to a reasonable reserve for  ongoing
operations, be invested or committed to investment in  properties
by  the  later  of two years after the date of the Prospectus  or
twelve  months  after  the  offering  terminates.   Although  the
Company  had no formal contractual commitments to expend  capital
at June 30, 2007, it entered into one commitment after this date.
The  Company purchased a Starbucks store in Bluffton, Indiana for
approximately $1,120,000.

        Until capital is invested in properties, the Company will
remain   extremely   liquid.   After   completion   of   property
acquisitions, the Company will attempt to maintain a cash reserve
of  only  approximately  .5% of subscription  proceeds.   Because
properties  are  purchased for cash and leased  under  triple-net
leases,   this   is   considered   adequate   to   satisfy   most
contingencies.


ITEM 3.   CONTROLS AND PROCEDURES.

       (a) Evaluation of disclosure controls and procedures

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the Managing Member of the Company evaluated the effectiveness of
the   design  and  operation  of  its  disclosure  controls   and
procedures (as defined in Rule 13a-14(c) under the Exchange Act).
Based  upon  that  evaluation, the President and Chief  Financial
Officer of the Managing Member concluded that, as of the  end  of
the  period  covered by this report, the disclosure controls  and
procedures of the Company are adequately designed to ensure  that
information required to be disclosed by us in the reports we file
or   submit  under  the  Exchange  Act  is  recorded,  processed,
summarized  and  reported, within the time periods  specified  in
applicable   rules  and  forms  and  that  such  information   is
accumulated   and  communicated  to  management,  including   the
President and Chief Financial Officer of the Managing Member,  in
a   manner   that  allows  timely  decisions  regarding  required
disclosure.

       (b)  Changes in internal controls

        There  were no significant changes made in the  Company's
internal controls during the most recent period covered  by  this
report that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over  financial
reporting.


                   PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

        There are no material pending legal proceedings to  which
the  Company  is  a party or of which the Company's  property  is
subject.

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
  PROCEEDS

        (a) During the period covered by this report, the Company
did  not sell any equity securities that are not registered under
the Securities Act of 1933.

        (b) The registration statement for the offering (No. 333-
125266) was declared effective on October 20, 2005.  The offering
commenced  on  October 20, 2005 and is ongoing.  AEI  Securities,
Inc.   (ASI)  is  the  dealer  manager  of  the  offering.    The
registration  statement  covers  10,000,000  Units   of   limited
liability  company interest at an aggregate price of up  to  $100
million.  Through June 30, 2007, the Company had sold 1,365,973.7
Units for gross offering proceeds of $13,659,737.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
  PROCEEDS

        From gross offering proceeds, the Company paid $1,323,284
in  selling  commissions  to ASI, an affiliate  of  the  Managing
Members.   Of  this  amount, $875,565 was re-allowed  by  ASI  to
participating  broker/dealers not affiliated  with  the  Managing
Members.   The  gross offering proceeds were further  reduced  by
underwriting  discounts  of $10,497 and  other  organization  and
syndication costs of $682,987 of which $373,555 was paid  to  AEI
Fund Management, Inc., an affiliate of the Managing Members,  for
costs incurred in connection with managing the Company's offering
and  organization.  From inception to June 30, 2007, the  Company
paid  commissions,  organization and syndication  costs  totaling
$2,016,768.

        From  the  net  offering proceeds, the  Company  expended
$7,545,000 to acquire real estate of which $7,424,287 represented
cash  paid  to  unaffiliated sellers of real estate and  $120,713
represented cash paid to reimburse AEI Fund Management, Inc.  for
costs  and direct expenses incurred by it in acquiring properties
on behalf of the Company.

        (c) Beginning in January 2009, pursuant to Section 7.7 of
the  Operating Agreement, each Limited Member has  the  right  to
present Units to the Company for purchase by submitting notice to
the  Managing  Member during January or July of each  year.   The
purchase  price  of the Units is equal to 85% of  the  net  asset
value  of  the Units, as of the first business day of January  or
July  of  each  year,  as determined by the  Managing  Member  in
accordance  with the provisions of the Operating  Agreement.   In
the case of the death of a Limited Member who is a natural person
the purchase price is equal to 100% of the net asset value of the
Units, including Units held in an IRA or other qualified plan  or
grantor trust.  Units tendered to the Company during January  and
July are redeemed on April 1st and October 1st, respectively,  of
each year subject to the following limitations.  The Company will
not  be  obligated to purchase in any year more than  2%  of  the
total number of Units outstanding on January 1 of such year.   In
no  event shall the Company be obligated to purchase Units if, in
the  sole discretion of the Managing Member, such purchase  would
impair  the  capital  or operation of the  Company.   During  the
period  covered by this report, the Company did not purchase  any
Units.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None

ITEM 5.OTHER INFORMATION

      None.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS

    31.1 Certification of  Chief Executive  Officer  of  Managing
    Member  pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2 Certification of  Chief Financial  Officer  of  Managing
    Member  pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    32 Certification  of  Chief  Executive  Officer   and   Chief
    Financial Officer of Managing Member pursuant to Section  906
    of the Sarbanes-Oxley Act of 2002.



                           SIGNATURES

        In  accordance with the requirements of the Exchange Act,
the  registrant caused this report to be signed on its behalf  by
the undersigned, thereunto duly authorized.

Dated:  August 10, 2007       AEI Income & Growth Fund 26 LLC
                              By:  AEI Fund Management XXI, Inc.
                              Its: Managing Member



                              By: /s/ Robert P Johnson
                                      Robert P. Johnson
                                      President
                                      (Principal Executive Officer)



                              By: /s/ Patrick W Keene
                                      Patrick W. Keene
                                      Chief Financial Officer
                                      (Principal Accounting Officer)