FORM 10-Q


                                        SECURITIES AND EXCHANGE COMMISSION

                                              Washington, D.C. 20549


          QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


(Mark One)
{ X }  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended  June 30, 1997

{   }  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to


For Quarter Ended   June 30, 1997           Commission file number  33-32125

                                Redwood Equipment Leasing Income Fund L.P.
                          (Exact Name of Registrant as Specified in its Charter)


             Delaware                                           52-1650971
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)



225 East Redwood Street, Baltimore, Maryland                        21202
(Address of Principal Executive Offices)                         (Zip Code)

Registrant's Telephone Number, Including Area Code:        (410) 727-4083


                                                   N/A
                          (Former Name, Former Address, and Former Fiscal Year,
                                      if Changed Since Last Report.)


  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  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

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.



                                                       INDEX


                                                                      Page No.

Part I.    Financial Information


     Item 1.    Financial Statements

                       Balance Sheets                                    1
                       Statements of Operations                          2
                       Statements of Partners' Capital                   3
                       Statements of Cash Flows                          4
                       Notes to Financial Statements                    5-6


     Item 2.    Management's Discussion and Analysis of
                   Financial Condition and Results of Operations         7



Part II.   Other Information


     Item 1. through Item 6.                                             8

     Signatures                                                          9


<PAGE>
REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>

                                                                  June 30,          December 3
                                                                    1997               1996


Assets

<S>                                                          <C>                   <C>
 Cash and cash equivalents                                   $        369,300      $2,772,471
 Lease payment and other receivables                                  102,099          33,098
 Deposit                                                                     -         10,000
 Investment in direct finance leases, net                           1,217,167       1,631,824

  Total assets                                               $      1,688,566      $4,447,393


Liabilities and Partners' Capital

 Accounts payable and accrued expenses                       $         14,060      $   18,656
 Amounts due to affiliates                                             18,288          12,403
 Advance rentals                                                       28,386          40,634

  Total liabilities                                                    60,734          71,693


 Partners' Capital
  General Partner                                                    (114,831)        (85,305)
  Assignor Limited Partner:
  Assignment of limited partnership interests - $25 stated
    value per unit, 401,180 units outstanding                       1,742,164       4,460,235
  Limited partnership interests - $25 stated value per
   unit, 40 units outstanding                                             299             570
  Special Limited Partners                                                200             200

  Total partners' capital                                           1,627,832       4,375,700

  Total liabilities and partners' capital                    $      1,688,566      $4,447,393



</TABLE>


See accompanying notes to financial statements

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REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
                                                            Three  months  ended
                                                             Six  months   ended
                                                             June  30,  June 30,
                                                             June 30, June 30,
                                                               1997      1996       1997      1996

Revenues
<S>                                                         <C>       <C>        <C>       <C>
 Direct finance lease revenue                               $ 32,580  $ 47,915   $ 71,183  $ 99,711
 Interest income                                               3,767    29,843     29,139    61,424
 Gain from sale of leased equipment                           29,556    29,516     29,556    29,516

                                                              65,903   107,274    129,878   190,651


Expenses
 Administrative expenses including
  amounts to related party                                    14,279    16,943     37,490    36,434
 Management fees to advisor                                    8,060     3,054     10,965     6,107
 Professional fees                                             4,420     4,000      8,420     8,450
 Amortization of acquisition costs                             3,071     3,560      6,405     7,080

                                                              29,830    27,557     63,280    58,071


Net earnings                                                $ 36,073  $ 79,717   $ 66,598  $132,580


Net earnings per unit of assignee
 limited partnership interest                               $   0.09  $   0.19   $   0.16  $   0.32

</TABLE>


See accompanying notes to financial statements

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         REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

              Statements of Partners' Capital
      For the six months ended June 30, 1997 and 1996
                        (Unaudited)
<TABLE>
<CAPTION>
                                                              Assignee   Assignor     Special
                                                              Limited    Limited      Limited       General
                                                              Partners   Partner      Partners      Partner      Total


<S>                                                        <C>          <C>      <C>              <C>        <C>
Balance at December 31, 1996                               $  4,460,235 $    570 $            200 $  (85,305)$  4,375,700

Net earnings                                                     65,925        7                 -       666       66,598

Distributions to partners
 Operations                                                    (376,916)     (38)                -    (5,875)    (382,829)
 Return of capital                                           (2,407,080)    (240)                -   (24,317)  (2,431,637)

Balance at June 30, 1997                                   $  1,742,164 $    299 $            200 $ (114,831)$  1,627,832



Balance at December 31, 1995                               $  5,020,712 $    626 $            200 $  (73,866)$  4,947,672

Net earnings                                                    129,915       13                 -     2,652      132,580

Distributions to partners                                      (401,180)     (40)                -    (8,188)    (409,408)

Balance at June 30, 1996                                   $  4,749,447 $    599 $            200 $  (79,402)$  4,670,844

</TABLE>

       See accompanying notes to financial statements

                            -3-

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REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Statements of Cash Flows
For the six months ended June 30,
(Unaudited)
<TABLE>
<CAPTION>
                                                                   1997                1996


Cash flow from operating activities
<S>                                                           <C>               <C>
 Net earnings                                                 $     66,598      $        132,580
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Amortization of acquisition costs                                 6,405                 7,080
   Gain from sale of leased equipment                              (29,556)              (29,516)
   Changes in assets and liabilities
    (Increase) decrease in lease payment and other receivables     (69,001)               30,599
    Decrease in deposit                                             10,000                      -
    Decrease in accounts payable and accrued expenses               (4,596)               (3,551)
    Increase in amounts due to affiliates                            5,885                 2,242
    Decrease in advance rentals                                    (12,248)               (2,645)

Net cash provided by (used in) operating activities                (26,513)              136,789

Cash flows from investing activities
 Principal received on direct finance leases                       349,308               355,947
 Termination of direct finance leases                               88,500                29,516

Net cash provided by investing activities                          437,808               385,463

Cash flows from financing activities-
 distributions to partners                                      (2,814,466)             (409,408)


Net increase (decrease) in cash and cash equivalents            (2,403,171)              112,844

Cash and cash equivalents
 Beginning of period                                             2,772,471             2,500,697

 End of period                                                $    369,300      $      2,613,541

</TABLE>


See accompanying notes to financial statements

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                                           Notes to Financial Statements
                                                   June 30, 1997
                                                    (Unaudited)


Note 1 - The Partnership and Basis of Preparation

         The  accompanying  financial  statements of Redwood  Equipment  Leasing
Income Fund L.P. (the  "Partnership")  do not include all of the information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting principles.  The unaudited interim
financial  statements  reflect  all  adjustments  which are,  in the  opinion of
management, necessary to a fair statement of the results for the interim periods
presented.  All such adjustments are of a normal recurring nature. The unaudited
interim financial  information  should be read in conjunction with the financial
statements contained in the 1996 Annual Report.


Note 2 - Cash and Cash Equivalents

         The  Partnership  considers all  short-term  investments  with original
maturities  of  three  months  or  less  as  cash  equivalents.  Cash  and  cash
equivalents  consist of cash,  money market accounts and other liquid short term
investments and are stated at cost, which approximates market value, at June 30,
1997 and December 31, 1996.


Note 3 - Related Party Transactions

         The  Partnership's  General  Partner earned an asset  management fee of
$4,340 and $6,141 (3% of  distributable  cash  distributions  to investors)  and
received  or was due  reimbursement  of $8,885  and  $8,025  for  certain  costs
incurred relating to  administrative  services for the Partnership for the three
months ended June 30, 1997 and 1996, respectively.

         As the management  agent,  Signet is entitled to an equipment and lease
management fee equal to 1.5% of gross lease rental payments as well as a fee for
services  provided in acquiring  and disposing of leased  assets.  For the three
months  ended  June  30,  1997  and  1996,  Signet  earned  $8,060  and  $3,054,
respectively in management and disposition fees.


Note 4 - Leases

         Investment in direct  finance leases with initial terms ranging from 34
to 82 months at June 30, 1997 and December 31, 1996 includes the following:
<TABLE>
<CAPTION>

                                                                   June 30, 1997           December 31, 1996

<S>                                                              <C>                         <C>
          Lease payments receivable                              $    844,473                $ 1,259,277
          Estimated residual value                                    483,292                    542,237
          Acquisition fees, net                                        12,111                     18,516
          Unearned income                                            (100,153)                  (165,650)
          Reserve for residual value loss                             (22,556)                   (22,556)

                                                                  $ 1,217,167                $ 1,631,824
</TABLE>

          During the first quarter of 1997, the Partnership  learned that one of
its lessees is in default under the terms of its lease. However, pursuant to the
Security  Agreement and Assignment of Lease,  all rental  payments due from this
lessee have been guaranteed by the lease originator.  The guarantee  obligations
have been honored by the lease originator and  accordingly,  the Partnership has
timely received all rental payments due under the lease.



                                                      -5-
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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                                           Notes to Financial Statements
                                                   June 30, 1997
                                                    (Unaudited)

Note 4 - Leases - continued

          During the second quarter of 1997, two lease schedules from one lessee
expired.  The lessee  purchased the  equipment for $88,500 from the  Partnership
resulting in a gain from the sale of leased equipment of $29,556.

          All leases in the  Partnership's  portfolio  are  classified as direct
finance leases.


Note 5 - Net Earnings per Unit of Assigned Limited Partnership Interest

          Net  earnings  per unit of assignee  limited  partnership  interest is
disclosed  on the  Statements  of  Operations  and is based upon  401,180  units
outstanding.


Note 6 - Subsequent Event

          In August 1997, the Partnership will make a cash distribution totaling
$233,170 of which 99% will be  allocated  to  assignee  limited  partners.  This
distribution will be derived from principal  payments received on direct finance
leases and certain  other  investing  activities.  Holders of  assignee  limited
partnership  interests will receive cash distributions of approximately $.58 per
$25 unit.



                                                      -6-

<PAGE>
                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                             Management's Discussion and Analysis of Financial
                                        Condition and Results of Operations

Liquidity and Capital Resources

         At June 30, 1997, the Partnership  had a working capital  position that
included cash and cash  equivalents of $369,300 and accounts payable and accrued
expenses of $14,060. The Partnership invests its cash balances in a money market
account. The Partnership is reserving $136,130 as working capital reserves,  but
has the  discretion to increase or decrease  reserves as deemed  necessary.  The
unexpended  offering  proceeds and working  capital  reserves are  sufficient to
satisfy the Partnership's liquidity requirements

         Cash and cash equivalents  increased  $55,045 during the second quarter
of 1997.  This  increase  represented  the  combined  effect of $25,287  used by
operating activities,  $169,957 received in principal payments on direct finance
leases,  $88,500 received upon termination of certain direct finance leases, and
$178,125 distributed to partners.

         The  Partnership  made a distribution  of $178,125 on May 13, 1997 from
funds  generated  from  principal  payments  on  direct  finance  leases.   This
distribution   increased  the  total   distributions  from  the  Partnership  to
$9,078,407 to Unitholders or 90.51% of gross offering proceeds


Results of Operations

         Direct  finance  lease  revenue  decreased  $15,335  during  the second
quarter of 1997 as compared to the second  quarter of 1996,  and $28,528  during
the first six months of 1997 as compared  to the first six months of 1996.  This
decrease  resulted from scheduled lease  terminations and an expected decline in
the portion of lease payments recognized as revenue (versus return of principal)
for existing leases.

         Interest income decreased  $26,076 during the second quarter of 1997 as
compared to the second  quarter of 1996, and $32,285 during the first six months
of 1997 as compared to the first six months of 1996, due primarily to lower cash
balances after the return of capital distribution made in March 1997.

     The Partnership recognized a $29,556 gain from the sale of leased equipment
during the second quarter of 1997.

         Total expenses increased by $2,273 during the second quarter of 1997 as
compared to the second  quarter of 1996,  and $5,209 during the first six months
of 1997 as compared to the first six months of 1996. The increases are primarily
attributable to state taxes and disposition fees earned by the Advisor.

         During the first quarter of 1997, the  Partnership  learned that one of
its lessees is in default under the terms of its lease. However, pursuant to the
Security  Agreement and Assignment of Lease,  all rental  payments due from this
lessee have been guaranteed by the lease originator.  The guarantee  obligations
have been honored by the lease originator and  accordingly,  the Partnership has
timely received all rental payments due under the lease.


Equipment Lease Acquisitions

         During the second  quarter of 1997, the  Partnership  made no equipment
lease acquisitions.  As noted in prior reports,  the Partnership has entered the
Liquidation  Phase  during  which the  remaining  funds (net of  reserves)  were
distributed to investors.  Future quarterly  distributions  will be dependent on
funds  generated  from  operations,  principal  payments and proceeds from lease
sales. The Partnership will distribute $233,170 in August 1997 which was derived
primarily  from  principal  payments  and  certain  other  investing  activities
received during the quarter ended June 30, 1997.

                                                      -7-

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.


PART II.  OTHER INFORMATION


Item 1.     Legal Proceedings

                  Inapplicable

Item 2.     Changes in Securities

                  Inapplicable

Item 3.     Defaults upon Senior Securities

                  Inapplicable

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

                  Inapplicable

Item 5.     Other Information

                  Inapplicable

Item 6.     Exhibits and Reports on Form 8-K

                  a)  Exhibits:  None

                  b)  Reports on Form 8-K:    None



                                                        -8-

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.




                                                    SIGNATURES


     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, as amended,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                            REDWOOD EQUIPMENT LEASING
                                INCOME FUND L.P.




DATE:       7/29/97                           By:     /s/   John M.  Prugh
                                  John M. Prugh
                                                          President and Director
                                                          Redwood Leasing, Inc.
                                                          General Partner



DATE:       7/29/97                           By:     /s/   Timothy M.  Gisriel
                                                          Timothy M. Gisriel
                                    Treasurer
                              Redwood Leasing, Inc.
                                                         General Partner




                                                        -9-

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