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

                             -----------------------

                                    FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d)
              of the United States Securities Exchange Act of 1934

                             -----------------------


For Quarter Ended June 30, 1997                      Commission File No. 0-15630


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)


         Massachusetts                                                04-2923206
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


    One Financial Center, 21st Floor, Boston, MA                           02111
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code             (617)    482-8000

                          ----------------------------


                                 Not Applicable
              (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 ___

                             There are no Exhibits.

                                  Page 1 of 11

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<TABLE>
<CAPTION>

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)


                                    INDEX                                                            Page No.

Part I.       FINANCIAL INFORMATION

<S>           <C>                                                                                    <C>
              Financial Statements

                    Balance Sheets as of June 30, 1997 and December 31, 1996                         3

                    Statements of Operations
                          Quarters Ended June 30, 1997 and 1996 and
                          Six Months Ended June 30, 1997 and 1996                                    4

                    Statements of Cash Flows
                          Six Months Ended June 30, 1997 and 1996                                    5

                    Notes to Financial Statements                                                    6

              Management's Discussion and Analysis of Financial Condition
                    and Results of Operations                                                        7 - 8

              Equipment Portfolio                                                                    9

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                            10

              Signature                                                                              11

</TABLE>

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<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                                 Balance Sheets

                                    Assets                                          (Unaudited)             (Audited)
                                                                                      6/30/97               12/31/96
                                                                                 ----------------       ----------------
<S>                                                                              <C>                    <C>             
Investment property, at cost (note 2):
   Capital equipment                                                             $      5,032,434       $      5,447,101
     Less accumulated depreciation                                                      5,032,434              5,447,101
                                                                                 ----------------       ----------------
       Investment property, net                                                                 -                      -

Cash and cash equivalents                                                                  26,872                199,970
Rents receivable                                                                           18,463                 62,041
                                                                                 ----------------        ---------------

     Total assets                                                                $         45,335       $        262,011
                                                                                 ================       ================

                        Liabilities and Partners' Deficit
Liabilities:
   Accounts payable and accrued
     expenses - affiliates (note 3)                                              $          7,623       $         10,747
   Accounts payable and accrued expenses                                                  145,852                230,551
   Unearned rental income                                                                       -                 22,500
                                                                                 ----------------       ----------------

     Total liabilities                                                                    153,475                263,798
                                                                                 ----------------       ----------------

Partners' deficit:
   General Partner:
     Capital contribution                                                                   1,000                  1,000
     Cumulative net income                                                              1,136,269              1,132,009
     Cumulative cash distributions                                                     (1,135,837)            (1,124,540)
                                                                                 ----------------       ----------------
                                                                                            1,432                  8,469
                                                                                 ----------------       ----------------
   Limited Partners (57,239 units):
     Capital contribution, net of
       offering costs                                                                  25,569,053             25,569,053
     Cumulative net income                                                              3,321,474              3,206,144
     Cumulative cash distributions                                                    (29,000,099)           (28,785,453)
                                                                                 ----------------       ----------------
                                                                                         (109,572)               (10,256)
                                                                                 ----------------       ----------------
     Total partners' deficit                                                             (108,140)                (1,787)
                                                                                 ----------------       ----------------

     Total liabilities and partners' deficit                                     $         45,335       $        262,011
                                                                                 ================       ================
</TABLE>

                 See accompanying notes to financial statements.


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<TABLE>
<CAPTION>

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                            Statements of Operations
                                   (Unaudited)

                                                     Quarters Ended                         Six Months Ended
                                                        June 30,                                June 30,
                                            -------------------------------         --------------------------------
                                                 1997              1996                1997                1996
                                            -------------------------------         --------------------------------

<S>                                         <C>                <C>                  <C>                 <C>         
Revenue:
   Rental income                            $     13,287       $    161,932         $     47,499        $    335,562
   Other income                                   41,630                  -              110,395                   -
   Interest income                                   562              1,083                2,218               2,366
   Net gain on sale
     of equipment                                      -             25,000               43,000              70,000
                                            ------------       ------------         ------------        ------------

       Total revenue                              55,479            188,015              203,112             407,928
                                            ------------       ------------         ------------        ------------

Costs and expenses:
   Related party expenses (note 3):
     Management fees                                 664              8,097                2,375              16,779
     General and administrative                   44,792             35,359               81,147              56,784
                                            ------------       ------------         ------------        ------------

       Total costs and expenses                   45,456             43,456               83,522              73,563
                                            ------------       ------------         ------------        ------------

Net income                                  $     10,023       $    144,559         $    119,590        $    334,365
                                            ============       ============         ============        ============

Net income per Limited
   Partnership Unit                         $       0.16       $       2.42         $       2.01        $       5.60
                                            ============       ============         ============        ============
</TABLE>

                 See accompanying notes to financial statements.


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<TABLE>
<CAPTION>

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                            Statements of Cash Flows
                     Six Months Ended June 30, 1997 and 1996
                                   (Unaudited)

                                                                                    1997                     1996
                                                                                    ----                     ----

<S>                                                                          <C>                        <C>            
Cash flows from operating activities:
   Net income                                                                $        119,590           $       334,365
                                                                             ----------------           ---------------

   Adjustments  to  reconcile  net  income  to net cash  provided
     by  operating  activities:
       Net gain on sale of equipment                                                  (43,000)                  (70,000)
       Net decrease in current assets                                                  43,578                    31,324
       Net decrease in current liabilities                                           (110,323)                  (16,374)
                                                                             ----------------           ---------------

         Total adjustments                                                           (109,745)                  (55,050)
                                                                             ----------------           ---------------

         Net cash provided by operating activities                                      9,845                   279,315
                                                                             ----------------           ---------------

Cash flows from investing activities:
   Proceeds from sales of investment property                                          43,000                    70,000
                                                                             ----------------           ---------------

         Net cash provided by investing activities                                     43,000                    70,000
                                                                             ----------------           ---------------

Cash flows from financing activities:
   Cash distributions to partners                                                    (225,943)                 (297,658)
                                                                             ----------------           ---------------

         Net cash used in financing activities                                       (225,943)                 (297,658)
                                                                             ----------------           ---------------

Net (decrease) increase in cash and cash equivalents                                 (173,098)                   51,657

Cash and cash equivalents at beginning of period                                      199,970                    98,385
                                                                             ----------------           ---------------

Cash and cash equivalents at end of period                                   $         26,872           $       150,042
                                                                             ================           ===============

Supplemental cash flow information:
   Interest paid during the period                                           $              -           $             -
                                                                             ================           ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
                Six Months Ended June 30, 1997 and June 30, 1996
                                   (Unaudited)

(1)   Organization and Partnership Matters

The foregoing  financial  statements of Hanover Lease Income Limited Partnership
(the  "Partnership")  have  been  prepared  in  accordance  with the  rules  and
regulations of the Securities and Exchange  Commission for Form 10-Q and reflect
all  adjustments  which are, in the opinion of management,  necessary for a fair
presentation of the results for the interim periods presented.  Pursuant to such
rules and  regulations,  certain note  disclosures  which are normally  required
under  generally  accepted  accounting  principles  have  been  omitted.  It  is
recommended  that these  financial  statements be read in  conjunction  with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1996.

(2)   Investment Property

At June 30, 1997, the Partnership  owned capital  equipment with a cost basis of
$5,032,434.   All  purchases  of  capital  equipment  are  subject  to  a  4.75%
acquisition fee paid to the General Partner.

(3)   Related Party Transactions

Fees,  commissions  and other expenses paid or accrued by the Partnership to the
General  Partner or affiliates  of the General  Partner for the six months ended
June 30 are as follows:

<TABLE>
<CAPTION>
                                                    1997                1996
                                                    ----                ----

<S>                                              <C>                <C>         
Management fees                                  $       2,375      $     16,779
Reimbursable expenses paid                              71,896            56,048
                                                 -------------      ------------

                                                 $      74,271      $     72,827
                                                 =============      ============
</TABLE>

Under the terms of the Partnership Agreement, the General Partner is entitled to
an  Equipment  Acquisition  Fee of  4.75%  of the  purchase  price  paid  by the
Partnership  for the  equipment.  The  General  Partner  is also  entitled  to a
management fee equal to 5% of the monthly rental billings. Also, the Partnership
reimburses  the  General  Partner  and their  affiliates  for  certain  expenses
incurred by them in connection with the operation of the Partnership.




<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Results of Operations

The following discussion relates to the Partnership's operations for the quarter
and for the six months ended June 30, 1997,  in  comparison  to the same periods
ended June 30, 1996.

The  Partnership  realized  net income of $10,023 and  $144,559 for the quarters
ended June 30, 1997 and 1996, respectively.  Rental income decreased $148,645 or
92% between the quarter  periods.  The decrease is primarily due to lower rental
rates obtained on equipment lease  extensions and  remarketings  resulting after
the initial  lease term expires and due to a decrease in the overall size of the
equipment portfolio.  Other income is the result of a reduction of an overstated
liability recorded in a prior period. Interest income decreased $521 as a result
of lower average short-term  investment  balances held during the second quarter
of 1997. There were no sales of equipment during the current quarter.

Total costs and expenses  increased  $2,000 or 5% during the current  quarter as
compared to the prior period quarter. The increase in general and administrative
expense is attributed to an increase in the allocable salaries of the accounting
and reporting  personnel of the General  Partner,  which are reimbursable by the
various partnerships under management.  Management fees decreased in the current
quarter as a result of the decline in rental income.

The Partnership  realized net income of $119,590 and $334,365 for the six months
ended June 30, 1997 and 1996, respectively.  Rental income decreased $288,063 or
86% between the six month  periods.  The  decrease is due to lower  rental rates
obtained on equipment  lease  extensions and  remarketings  resulting  after the
initial  lease term  expires and due to a decrease  in the  overall  size of the
equipment  portfolio,  as  discussed  above.  Other  income  is  the  result  of
helicopter  inspection fees and flight time charges, and includes a reduction of
an overstated liability in the amount of $83,260,  which was recorded in a prior
period.  Interest income decreased $148 as a result of lower average  short-term
investment balances held between the six month periods. The decrease in net gain
on sale of  equipment  between  1997 and 1996 is  attributed  to a reduction  in
equipment sales.

Total costs and expenses  increased  $9,959 or 14% between the six month periods
ended  June 30,  1997 and 1996.  The  increase  in  general  and  administrative
expenses  is  mainly  due  to an  increase  in  the  allocable  salaries  of the
partnership accounting and reporting personnel of the General Partner during the
current year. Management fees decreased between the six month periods due to the
decline in rental income.

The Partnership  recorded net income per Limited  Partnership  Unit of $0.16 and
$2.42 for the  quarters  ended  June 30,  1997 and 1996,  respectively,  and net
income  of $2.01  and $5.60 for the six  months  ended  June 30,  1997 and 1996,
respectively.



<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Liquidity and Capital Resources

For the six months  ended  June 30,  1997,  rental  revenue  generated  from the
operating  leases and sales  proceeds  from  equipment  sales  were the  primary
sources of funds for the  Partnership.  As the equipment leases  terminate,  the
General Partner determines if the equipment will be extended to the same lessee,
remarketed to another  lessee,  or sold.  This  decision is made upon  analyzing
which option generates the most favorable result.

Consistent with prior periods,  the Partnership's  operating activities resulted
in a decrease in rental revenue due to lease expirations and resulting equipment
sales,  and due to lower  rental rates  obtained on  remarketed  equipment.  The
helicopter lease with Sikorsky Aircraft Corporation expired in January, 1997. It
is anticipated  that the  helicopter  will be sold and the  Partnership  will be
liquidated soon thereafter.

The  Partnership's  investing  activities for the six months ended June 30, 1997
resulted in sales of fully depreciated  equipment,  generating  $43,000 in sales
proceeds.  The Partnership has no material capital commitments and will not have
any  in  the  future  due  to  the  Partnership  having  fulfilled  its  capital
expenditure commitments in prior years.

During the fourth quarter of 1995, the General Partner  announced its intentions
of winding  down the  operations  of the  Partnership.  It is  anticipated  that
substantially all of the assets will be liquidated and the proceeds will be used
to settle  all  outstanding  liabilities  and make a final  distribution  to the
Partners during 1997.

Cash  distributions  are  currently  halted in an effort to  minimize  costs and
accumulate cash in anticipation of a final distribution to the Partners once the
Partnership  has  been  liquidated.  The  effects  of  inflation  have  not been
significant to the  Partnership and are not expected to have any material impact
in future periods.



<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                         Equipment Portfolio (Unaudited)
                                  June 30, 1997

Lessees

BASF Corporation
Federal Paper Board Company, Incorporated

Equipment Description                              Acquisition Price

Helicopter aircraft                                 $      4,678,826
Heavy duty equipment                                         328,500
Other                                                         25,108
                                                    ----------------

                                                    $      5,032,434
                                                    ================


<PAGE>


                           PART II. OTHER INFORMATION

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)


Item 1.        Legal Proceedings
               Response:  None

Item 2.        Changes in the Rights of the Partnership's Security Holders
               Response:  None

Item 3.        Defaults by the Partnership on its Senior Securities
               Response:  None

Item 4.        Results of Votes of Security Holders
               Response:  None

Item 5.        Other Information
               Response:  None

Item 6.        Exhibits and Reports on Form 8-K
               Response:

               A.  None

               B.  None


<PAGE>


                                    SIGNATURE

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

HANOVER LEASE INCOME LIMITED PARTNERSHIP
(Registrant)

By:    Hanover Leasing Partnership,
       its General Partner

By:    TLP Leasing Programs, Inc.,
       one of its Corporate General Partners


Date:  August 13, 1997

By:    Arthur P. Beecher,
       President