Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

           |X|     Quarterly Report Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934.
                   For the quarterly period ended March 31, 1999

           |_|     Transition Report Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934.
                   For the transition period from _______ to _______

                        Commission File Number 333-62477

                      ATEL Capital Equipment Fund VIII, LLC
             (Exact name of registrant as specified in its charter)

California                                                          94-3307404
(State or other jurisdiction of                               (I. R. S. Employer
incorporation or organization)                               Identification No.)

           235 Pine Street, 6th Floor, San Francisco, California 94104
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (415) 989-8800



Indicate  by a 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  |_|

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None
<PAGE>


                          Part I. FINANCIAL INFORMATION

Item 1.  Financial Statements.



<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                                 BALANCE SHEETS

                      MARCH 31, 1999 AND DECEMBER 31, 1998
                                   (Unaudited)


                                     ASSETS

                                                 1999             1998
                                                 ----             ----
Cash and cash equivalents                        $1,522,336            $ 600
Accounts receivable                                 359,974                -
Investments in leases                            12,744,807                -
                                            ---------------- ----------------
Total assets                                    $14,627,117            $ 600
                                            ================ ================


                        LIABILITIES AND MEMBERS' CAPITAL


Accounts payable:
   Managing Member                                 $ 16,864
   Other                                             32,929

Unearned operating lease income                      35,118
                                            ----------------
Total liabilities                                    84,911
Members' capital:
     Managing member                                (16,636)           $ 100
     Other members                               14,558,842              500
                                            ---------------- ----------------
Total members' capital                           14,542,206              600
                                            ---------------- ----------------
Total liabilities and members' capital          $14,627,117            $ 600
                                            ================ ================

                             See accompanying notes.

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                             STATEMENT OF OPERATIONS

                            THREE MONTH PERIOD ENDED
                                 MARCH 31, 1999
                                   (Unaudited)

Revenues:
   Leasing activities:
      Operating leases                                                $ 18,751
      Direct financing leases                                           65,995
Interest                                                                   145
Other                                                                      251
                                                               ----------------
                                                                        85,142
Expenses:
Depreciation                                                           134,842
Interest expense                                                       105,548
Administrative cost reimbursements to Managing Member                   40,113
Asset management fees to Managing Member                                16,864
Other                                                                    5,621
Professional fees                                                        5,294
                                                               ----------------
                                                                       308,282
                                                               ----------------
Net loss                                                            $ (223,140)
                                                               ================

Net loss:
   Managing member                                                   $ (16,736)
   Other members                                                      (206,404)
                                                               ----------------
                                                                    $ (223,140)
                                                               ================

Net loss per Limited Liability Company Unit                            $ (0.24)
Weighted average number of Units outstanding                           860,029

                    STATEMENT OF CHANGES IN MEMBERS' CAPITAL

                            THREE MONTH PERIOD ENDED
                                 MARCH 31, 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Other Members                Managing
                                           Units            Amount            Member            Total

<S>                                         <C>              <C>                <C>           <C>         
Balance December 31, 1998                          50              $ 500            $ 100            $ 600
Capital contributions                       1,735,142         17,351,420                -       17,351,420
Less selling commissions to affiliates                        (1,648,385)               -       (1,648,385)
Other syndication costs to affiliates                           (890,623)               -         (890,623)
Distributions to members                                         (47,666)               -          (47,666)
Net loss                                                        (206,404)         (16,736)        (223,140)
                                      ---------------- ------------------ ---------------- ----------------
Balance March 31, 1999                      1,735,192        $14,558,842        $ (16,636)    $ 14,542,206
                                      ================ ================== ================ ================
</TABLE>
                             See accompanying notes.

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                             STATEMENT OF CASH FLOWS

                            THREE MONTH PERIOD ENDED
                                 MARCH 31, 1999


Operating activities:
Net loss                                                             $ (223,140)
Adjustments to reconcile net income to cash provided 
   by operating activities:
   Depreciation                                                         134,842
   Changes in operating assets and liabilities:
      Accounts receivable                                              (359,974)
      Accounts payable, Managing Member                                  16,864
      Accounts payable, other                                            32,929
      Unearned lease income                                              35,118
                                                                ----------------
Net cash used in operations                                            (363,361)
                                                                ----------------

Investing activities:
Purchases of equipment on operating leases                           (8,773,491)
Purchases of equipment on direct financing leases                    (4,184,704)
Reduction of net investment in direct financing leases                   78,546
                                                                ----------------
Net cash used in investing activities                               (12,879,649)
                                                                ----------------

Financing activities:
Capital contributions received                                       17,351,420
Payment of syndication costs to managing member                      (2,539,008)
Distributions to other members                                          (47,666)
                                                                ----------------
Net cash provided by financing activities                            14,764,746
                                                                ----------------

Net increase in cash and cash equivalents                             1,521,736

Cash and cash equivalents at beginning of period                            600
                                                                ----------------
Cash and cash equivalents at end of period                           $1,522,336
                                                                ================

Supplemental disclosures of cash flow information:
Cash paid during the period for interest                              $ 105,548
                                                                ================
                             See accompanying notes.

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                   (Unaudited)


1.  Summary of significant accounting policies:

Interim financial statements:

The unaudited interim financial statements reflect all adjustments which are, in
the opinion of the managing  member,  necessary to a fair statement of financial
position and results of operations for the interim periods  presented.  All such
adjustments are of a normal recurring nature.  These unaudited interim financial
statements  should be read in  conjunction  with the most recent  report on Form
10K.


2.  Organization and Company matters:

ATEL Capital Equipment Fund VIII, LLC. (the Company),  was formed under the laws
of the State of  California  on July 31 , 1998,  for the  purpose  of  acquiring
equipment to engage in equipment leasing and sales activities.  Contributions in
the  amount  of $600  were  received  as of  October  7,  1998,  $100  of  which
represented  the Managing  Member's (ATEL  Financial  Corporation's)  continuing
interest, and $500 of which represented the Initial Members' capital investment.

Upon the sale of the  minimum  amount  of Units  of  Limited  Liability  Company
interest  (Units)  of  $1,200,000  and the  receipt of the  proceeds  thereof on
January 13, 1999, the Company commenced operations.

The  Company  does not make a  provision  for income  taxes since all income and
losses will be allocated to the Partners for inclusion in their  individual  tax
returns.


3.  Investment in leases:

The Company's investment in leases consists of the following:

<TABLE>
<CAPTION>
                                                            Depreciation
                                                             Expense or          Balance
                                                            Amortization        March 31,
                                            Additions         of Leases           1999
<S>                                          <C>                 <C>             <C>        
Net investment in operating leases             8,773,491         $ (134,842)      $8,638,649
Net investment in direct financing leases      4,184,704            (78,546)       4,106,158
                                         ---------------- ------------------ ----------------
                                             $12,958,195         $ (213,388)     $12,744,807
                                         ================ ================== ================
</TABLE>



<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                   (Unaudited)


3.  Investment in leases (continued):

Operating leases:

Property on operating leases consists of the following as of March 31, 1999:

                           Transportation                      $ 7,404,130
                           Manufacturing                           494,113
                           Materials handling                      594,748
                           Other                                   280,500
                                                         ------------------
                                                                 8,773,491
                           Less accumulated depreciation          (134,842)
                                                         ------------------
                                                               $ 8,638,649
                                                         ==================

Direct financing leases:

As of March 31, 1999,  investment in direct  financing  leases  consists  office
automation  equipment.  The  following  lists the  components  of the  Company's
investment in direct financing leases as of March 31, 1999:

 Total minimum lease payments receivable                           $4,142,441
 Estimated residual values of leased equipment (unguaranteed)         448,103
                                                              ----------------
 Investment in direct financing leases                              4,590,544
 Less unearned income                                                (484,386)
                                                              ----------------
 Net investment in direct financing leases                         $4,106,158
                                                              ================

All of the property on leases was acquired in 1999.  There were no  dispositions
of such property.


<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                   (Unaudited)


3.  Investment in leases (continued):

At March 31, 1999, the aggregate amounts of future minimum lease payments are as
follows:

                                              Direct
           Year ending     Operating         Financing
          December 31,      Leases            Leases             Total
                  1999       $1,537,672          $ 856,505       $2,394,177
                  2000        2,052,365          1,141,734        3,194,099
                  2001        2,052,365          1,001,391        3,053,756
                  2002        2,052,365            579,542        2,631,907
                  2003        1,394,111            563,269        1,957,380
            Thereafter        4,779,513                  -        4,779,513
                        ---------------- ------------------ ----------------
                            $13,868,391        $ 4,142,441      $18,010,832
                        ================ ================== ================


4.  Related party transactions:

The terms of the Limited Company  Operating  Agreement provide that the Managing
Member  and/or  Affiliates  are entitled to receive  certain fees for  equipment
acquisition, management and resale and for management of the Company.

The Limited Liability  Company Operating  Agreement allows for the reimbursement
of costs incurred by the Managing Member in providing administrative services to
the  Company.  Administrative  services  provided  include  Company  accounting,
investor  relations,  legal counsel and lease and equipment  documentation.  The
Managing Member is not reimbursed for services where it is entitled to receive a
separate  fee as  compensation  for  such  services,  such  as  acquisition  and
management of equipment.  Reimbursable costs incurred by the Managing Member are
allocated to the Company based upon actual time incurred by employees working on
Company  business and an allocation of rent and other costs based on utilization
studies.

Substantially  all  employees of the  Managing  Member  record time  incurred in
performing administrative services on behalf of all of the Companies serviced by
the Managing Member.  The Managing Member believes that the costs reimbursed are
the lower of (i)  actual  costs  incurred  on behalf of the  Company or (ii) the
amount the Company would be required to pay  independent  parties for comparable
administrative  services in the same geographic location and are reimbursable in
accordance with the Limited Liability Company Operating Agreement.

The  Managing   Member   and/or   Affiliates   earned  fees,   commissions   and
reimbursements, pursuant to the Limited Liability Company Agreement as follows:

Selling commissions (equal to 9.5% of the selling price of 
   the Limited Liability Company units, deducted from Other 
   Members' capital)                                                 $1,648,385
Reimbursement of other syndication costs to Managing Member             890,623
Administrative costs reimbursed to Managing Member                       40,113
Asset management fees to Managing Member                                 16,864
                                                               -----------------
                                                                     $2,595,985
                                                               =================


<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                   (Unaudited)


5. Member's capital:

As of March 31, 1999, 1,735,192 Units ($17,351,920) were issued and outstanding.
The Company's registration statement with the Securities and Exchange Commission
became  effective  December 7, 1998.  The Company is  authorized  to issue up to
15,000,050 Units, including the 50 Units issued to the initial members.

The  Company's Net Income,  Net Losses,  and  Distributions  are to be allocated
92.5% to the Members and 7.5% to the Managing Member.


6.  Line of credit:

The Company  participates with the Managing Member and certain of its Affiliates
in  a  $90,000,000   revolving  credit  agreement  with  a  group  of  financial
institutions  which  expires on January  31,  2000.  The  agreement  includes an
acquisition  facility and a warehouse  facility which are used to provide bridge
financing  for  assets  on  leases.  Draws on the  acquisition  facility  by any
individual  borrower  are  secured  only by that  borrower's  assets,  including
equipment and related leases.  Borrowings on the warehouse facility are recourse
jointly to certain of the Affiliates, the Company and the Managing Member.

At March 31, 1999, the Company had no borrowings under the line of credit.

The credit agreement  includes certain  financial  covenants  applicable to each
borrower. The Company was in compliance with its covenants as of March 31, 1999.



<PAGE>

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

Capital Resources and Liquidity

During the first quarter of 1999, the Company's primary  activities were raising
funds  through  its  offering of Limited  Liability  Company  Units  (Units) and
engaging in equipment  leasing  activities.  Through March 31, 1999, the Company
had received  subscriptions for 1,767,141 Units  ($17,671,410) all of which were
issued and outstanding.

During  the  funding  period,  the  Company's  primary  source of  liquidity  is
subscription  proceeds from the public  offering of Units.  The liquidity of the
Company will vary in the future, increasing to the extent cash flows from leases
exceed expenses,  and decreasing as lease assets are acquired,  as distributions
are made to the  members  and to the  extent  expenses  exceed  cash  flows from
leases.

As another source of liquidity,  the Company has contractual  obligations with a
diversified  group of lessees for fixed lease terms at fixed rental amounts.  As
the initial lease terms expire the Company will re-lease or sell the  equipment.
The future liquidity  beyond the contractual  minimum rentals will depend on the
Managing Member's success in re-leasing or selling the equipment as it comes off
lease.

The Company  participates with the Managing Member and certain of its affiliates
in a $90,000,000 revolving line of credit with a financial institution. The line
of credit expires on January 31, 2000.

The Company  anticipates  reinvesting  a portion of lease  payments  from assets
owned in new leasing  transactions.  Such reinvestment will occur only after the
payment  of  all  obligations,   including  debt  service  (both  principal  and
interest), the payment of management and acquisition fees to the Managing Member
and providing for cash distributions to the Limited Partners.

The Company currently has available adequate reserves to meet contingencies, but
in the event those  reserves  were found to be  inadequate,  the  Company  would
likely be in a position to borrow  against its  current  portfolio  to meet such
requirements.  The Managing Member envisions no such  requirements for operating
purposes.

No  commitments  of capital  have been or are expected to be made other than for
the acquisition of additional equipment.  Such commitments totaled approximately
$4,700,000 as of March 31, 1999.

If  inflation  in the general  economy  becomes  significant,  it may affect the
Company  inasmuch as the residual  (resale) values and rates on re-leases of the
Company's  leased assets may increase as the costs of similar  assets  increase.
However, the Company's revenues from existing leases would not increase, as such
rates are generally  fixed for the terms of the leases  without  adjustment  for
inflation.

If interest rates increase  significantly,  the lease rates that the Company can
obtain on future leases will be expected to increase as the cost of capital is a
significant  factor in the pricing of lease financing.  Leases already in place,
for the most part, would not be affected by changes in interest rates.



<PAGE>

Cash Flows

During the first quarters of 1999, the Company's primary source of liquidity was
the proceeds of its offering of Units.

Sources of cash flows from operating  activities  consisted  primarily of direct
financing lease revenues.  In future periods,  operating  leases are expected to
provide the majority of cash flows generated by operating activities.

Rents from direct  financing  leases were the only source of cash from investing
activities.  Uses of cash for  investing  activities  consisted  of cash used to
purchase operating and direct financing lease assets.

The only  source of cash  from  financing  activities  was the  proceeds  of the
Company's  public  offering  of Units of  Limited  Liability  Company  interest.
Financing uses of cash included  payments of syndication  costs  associated with
the offering and distributions to the members.


Results of operations


On January 13, 1999, the Company commenced operations.  Operations resulted in a
net loss of $223,140.  The Company's  primary  source of revenues is from direct
financing  leases.  In future periods,  operating  leases are expected to be the
most significant source of revenues.  Depreciation is related to operating lease
assets and thus,  to  operating  lease  revenues.  It is expected to increase in
future periods as acquisitions continue.

Asset  management  fees are based on the gross lease  rents of the Company  plus
proceeds from the sales of lease assets. They are limited to certain percentages
of lease rents,  distributions to members and certain other items. As assets are
acquired,  lease rents are collected and  distributions are made to the members,
these fees are expected to increase.

Interest  expense for the first quarter of 1999 related to the borrowings  under
the line of credit incurred by an affiliate of the Managing Member.  It included
all amounts related to those borrowings, going back as far as November 1998 when
the Managing  Member started to fund the related  transactions  on behalf of the
Company.  All of the revenues and related carrying costs for these  transactions
were attributed to the Company in the first quarter of 1999.

Results of operations in future periods are expected to vary  considerably  from
those  of the  first  quarter  of  1999  as the  Company  continues  to  acquire
significant amounts of lease assets.





<PAGE>

                           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.

         Information  provided  pursuant to ss.  228.701 (Item  701(f))(formerly
included in Form SR):

 (1) Effective date of the offering: December 7, 1998;
 File  Number:   333-62477  (2)  Offering   commenced:
 December 7, 1998 (3) The offering  did not  terminate
 before any securities were sold. (4) The offering has
 not been  terminated  prior to the sale of all of the
 securities.  (5)  The  managing  underwriter  is ATEL
 Securities   Corporation.   (6)  The   title  of  the
 registered  class of  securities is "Units of Limited
 Liability  Company interest" (7) Aggregate amount and
 offering  price of securities  registered and sold as
 of April 30, 1999


<TABLE>
<CAPTION>
                                                    Aggregate                          Aggregate
                                                    price of                           price of
                                                    offering                           offering
                                   Amount            amount            Amount           amount
      Title of Security          Registered        registered           sold             sold

<S>                                 <C>              <C>                 <C>           <C>         
 Limited Company units              15,000,000       $150,000,000        2,533,533     $ 25,335,330

 (8)  Costs  incurred  for  the  issuers   account  in
      connection with the issuance and distribution of
      the  securities  registered  for  each  category
      listed below:

                                 Direct or indirect payments to
                                  directors, officers, general
                                partners of the issuer or their
                                 associates; to persons owning
                                   ten percent or more of any         Direct or
                                 class of equity securities of        indirect
                                the issuer; and to affiliates of     payments to
                                 the issuer                            others            Total

 Underwriting discounts and
 commissions                               $ -                          $2,406,856       $2,406,856

 Other expenses                                                          1,390,090        1,390,090

                               ----------------                    ---------------- ----------------
 Total expenses                            $ -                          $3,796,946       $3,796,946
                               ================                    ================ ================




 (9) Net offering proceeds to the issuer after the total expenses in item 8:           $ 21,538,384

 (10) The  amount  of  net  offering  proceeds  to the
      issuer  used  for  each of the  purposes  listed
      below:

                                 Direct or indirect payments to
                                  directors, officers, general
                                partners of the issuer or their
                                 associates; to persons owning
                                   ten percent or more of any         Direct or
                                 class of equity securities of        indirect
                                the issuer; and to affiliates of     payments to
                                 the issuer                            others            Total

 Purchase and installation of
 machinery and equipment                   $ -                         $21,411,707     $ 21,411,707

 Working capital                                                           126,677          126,677
                               ----------------                    ---------------- ----------------
                                           $ -                         $21,538,384     $ 21,538,384
                               ================                    ================ ================

 (11)   The use of the  proceeds  in Item 10 does  not
        represent  a  material  change  in the uses of
        proceeds described in the prospectus.
</TABLE>


Item 6. Exhibits And Reports On Form 8-K.

                       (a)Documents filed as a part of this report

                       1.  Financial Statements

                           Included in Part I of this report:

                           Balance Sheets, March 31, 1999 and December 31, 1998.

                           Statement  of  operations  for the three month period
                              ended March 31, 1999.

                           Statement  of changes in  partners'  capital  for the
                              three month period ended March 31, 1999.

                           Statements  of cash flows for the three month  period
                              ended March 31, 1999.

                           Notes to the Financial Statements

                       2.  Financial Statement Schedules

                           All other  schedules  for which  provision is made in
                           the   applicable   accounting   regulations   of  the
                           Securities  and Exchange  Commission are not required
                           under the related  instructions or are  inapplicable,
                           and therefore have been omitted.

                       (b) Report on Form 8-K

                           None


<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  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.

Date:
May 14, 1999

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC
                                  (Registrant)



                                   By: ATEL Financial Corporation
                                       Managing Member of Registrant




                               By: /s/ A. J. Batt
                                   -----------------------------------
                                   A. J. Batt
                                   President and Chief Executive Officer
                                   of Managing Member




                              By: /s/ Dean L. Cash
                                   -----------------------------------
                                  Dean L. Cash
                                  Executive Vice President
                                  of Managing Member




                              By: /s/ Paritosh K. Choksi
                                  -----------------------------------
                                  Paritosh K. Choksi
                                  Principal financial officer
                                  of registrant




                              By: /s/ Donald E. Carpenter
                                  -----------------------------------
                                  Donald E. Carpenter
                                  Principal accounting
                                  officer of registrant