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 June 30, 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

                       JUNE 30, 1999 AND DECEMBER 31, 1998
                                   (Unaudited)

                                     ASSETS

                                                  1999             1998
                                                  ----             ----
Cash and cash equivalents                         $4,777,792            $ 600
Accounts receivable                                  991,095                -
Investments in leases                             28,628,809                -
                                            ----------------- ----------------
Total assets                                     $34,397,696            $ 600
                                            ================= ================


                        LIABILITIES AND MEMBERS' CAPITAL


Accounts payable                                   $ 242,835

Unearned operating lease income                       49,766
                                            -----------------
Total liabilities                                    292,601
Members' capital:
     Managing member                                 (17,793)           $ 100
     Other members                                34,122,888              500
                                            ----------------- ----------------
Total members' capital                            34,105,095              600
                                            ----------------- ----------------
Total liabilities and members' capital           $34,397,696            $ 600
                                            ================= ================

                             See accompanying notes.

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF OPERATIONS

                        SIX AND THREE MONTH PERIODS ENDED
                                  JUNE 30, 1999
                                   (Unaudited)

                                                 Six Months       Three Months
Revenues:
   Leasing activities:
      Operating leases                              $1,481,475       $1,462,724
      Direct financing leases                          125,488           59,493
Interest                                                19,089           18,944
Other                                                      207              (44)
                                              ----------------- ----------------
                                                     1,626,259        1,541,117
Expenses:
Depreciation                                         1,043,220          908,378
Interest expense                                       422,582          317,034
Administrative cost reimbursements to
   Managing Member                                     276,123          236,010
Asset management fees to Managing Member                78,988           62,124
Professional fees                                       27,611           22,317
Other                                                   16,306           10,685
                                              ----------------- ----------------
                                                     1,864,830        1,556,548
                                              ----------------- ----------------
Net loss                                            $ (238,571)       $ (15,431)
                                              ================= ================

Net loss:
   Managing member                                   $ (17,893)        $ (1,157)
   Other members                                      (220,678)         (14,274)
                                              ----------------- ----------------
                                                    $ (238,571)       $ (15,431)
                                              ================= ================

Net loss per Limited Liability Company Unit            $ (0.11)         $ (0.00)
Weighted average number of Units outstanding         1,934,557        2,855,581


                    STATEMENT OF CHANGES IN MEMBERS' CAPITAL

                             SIX MONTH PERIOD ENDED
                                  JUNE 30, 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                          4,058,545         40,585,450                -       40,585,450
Less selling commissions to affiliates                           (3,855,618)               -       (3,855,618)
Other syndication costs to affiliates                            (1,957,345)               -       (1,957,345)
Distributions to members                                           (429,421)               -         (429,421)
Net loss                                                           (220,678)         (17,893)        (238,571)
                                        ----------------- ----------------------------------- ----------------
Balance June 30, 1999                          4,058,595        $34,122,888        $ (17,793)    $ 34,105,095
                                        ================= =================================== ================
</TABLE>

                             See accompanying notes.

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF CASH FLOWS

                        SIX AND THREE MONTH PERIODS ENDED
                                  JUNE 30, 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          Six Months       Three Months
Operating activities:
<S>                                                         <C>              <C>
Net loss                                                     $ (238,571)       $ (15,431)
Adjustments to reconcile net loss to cash
   provided by operating activities:
   Depreciation                                               1,043,220          908,378
   Changes in operating assets and liabilities:
      Accounts receivable                                      (991,095)        (631,121)
      Accounts payable, Managing Member                               -          (16,864)
      Accounts payable, other                                   242,835          209,906
      Unearned lease income                                      49,766           14,648
                                                       ----------------- ----------------
Net cash used in operations                                     106,155          469,516
                                                       ----------------- ----------------

Investing activities:
Purchases of equipment on operating leases                  (24,638,437)     (15,864,946)
Purchases of equipment on direct financing leases            (5,341,088)      (1,156,384)
Reduction of net investment in direct financing leases          340,869          262,323
Payment of initial direct costs                                 (33,373)         (33,373)
                                                       ----------------- ----------------
Net cash used in investing activities                       (29,672,029)     (16,792,380)
                                                       ----------------- ----------------

Financing activities:
Capital contributions received                               40,585,450       23,234,030
Payment of syndication costs to managing member              (5,812,963)      (3,273,955)
Distributions to members                                       (429,421)        (381,755)
                                                       ----------------- ----------------
Net cash provided by financing activities                    34,343,066       19,578,320
                                                       ----------------- ----------------

Net increase in cash and cash equivalents                     4,777,192        3,255,456

Cash and cash equivalents at beginning of period                    600        1,522,336
                                                       ----------------- ----------------
Cash and cash equivalents at end of period                   $4,777,792       $4,777,792
                                                       ================= ================

Supplemental disclosures of cash flow information:
Cash paid during the period for interest                      $ 422,582        $ 317,034
                                                       ================= ================
</TABLE>

                             See accompanying notes.

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 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        June 30,
                                                             Additions          of Leases           1999
<S>                                                            <C>               <C>               <C>
Net investment in operating leases                             $24,638,437       $ (1,038,644)     $23,599,793
Net investment in direct financing leases                        5,341,088           (340,869)       5,000,219
Initial direct costs, net of accumulated amortization               33,373             (4,576)          28,797
                                                          ----------------- -----------------------------------
                                                               $29,979,525       $ (1,379,513)     $28,628,809
                                                          ================= ===================================
</TABLE>


                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1999
                                   (Unaudited)


3.  Investment in leases (continued):

Operating leases:

Property on operating leases consists of the following:

                                                                   Balance
                                        Acquisitions               June 30,
                               1st Quarter      2nd Quarter        1999
Transportation                     $7,404,130      $ 9,160,425    $16,564,555
Marine vessel                               -        3,952,500      3,952,500
Materials handling                    594,748          987,960      1,582,708
Manufacturing                         494,113          952,267      1,446,380
Other                                 280,500          811,794      1,092,294
                               --------------- ---------------- --------------
                                    8,773,491       15,864,946     24,638,437
Less accumulated depreciation        (134,842)        (903,802)    (1,038,644)
                               --------------- ---------------- --------------
                                   $8,638,649      $14,961,144    $23,599,793
                               =============== ================ ==============

Direct financing leases:

As of June 30, 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 June 30, 1999:

Total minimum lease payments receivable                           $5,027,357
Estimated residual values of leased equipment (unguaranteed)         565,388
                                                            -----------------
Investment in direct financing leases                              5,592,745
Less unearned income                                                (592,526)
                                                            -----------------
Net investment in direct financing leases                         $5,000,219
                                                            =================

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

                                  JUNE 30, 1999
                                   (Unaudited)


3.  Investment in leases (continued):

At June 30, 1999, the aggregate  amounts of future minimum lease payments are as
follows:

                                                  Direct
               Year ending    Operating          Financing
              December 31,      Leases            Leases            Total
                      1999       $1,919,921          $ 723,707       $2,643,628
                      2000        3,844,756          1,447,413        5,292,169
                      2001        3,844,756          1,306,797        5,151,553
                      2002        3,555,531            804,873        4,360,404
                      2003        2,303,980            708,252        3,012,232
                Thereafter        8,300,164             36,315        8,336,479
                           ----------------- ------------------ ----------------
                                $23,769,108        $ 5,027,357      $28,796,465
                           ================= ================== ================


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)                                             $3,855,618
Reimbursement of other syndication costs to Managing Member       1,957,345
Administrative costs reimbursed to Managing Member                  276,123
Asset management fees to Managing Member                             78,988
                                                                ------------
                                                                 $6,168,074
                                                                ============

<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1999
                                   (Unaudited)


5. Member's capital:

As of June 30, 1999,  4,058,595 Units ($40,585,950) 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  $95,000,000   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 June 30, 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 June 30, 1999.



<PAGE>

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

Capital Resources and Liquidity

During the first half 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 June 30, 1999, the Company had
received  subscriptions  for  4,058,595  Units  ($40,585,950)  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 $95,000,000 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
$16,158,000 as of June 30, 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.


Cash Flows

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


<PAGE>

Sources of cash flows from operating  activities  consisted  primarily of direct
financing lease revenues.

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 and payment of initial
direct costs related to lease asset purchases.

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  $238,571  for the first half of the year and $15,431 for the second
quarter.  The Company's  primary source of revenues is from operating leases. In
future periods,  operating  leases are also 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 half 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 half of 1999.

Results of operations in future periods are expected to vary  considerably  from
those of the first half 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.


<PAGE>

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 July 31, 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        4,592,168     $ 45,921,680

                             (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                               $ -                          $4,362,560       $4,362,560

                             Other expenses                                                          2,316,476        2,316,476

                                                          -----------------                   ----------------- ----------------
                             Total expenses                            $ -                          $6,679,035       $6,679,035
                                                          =================                   ================= ================

                             (9) Net offering proceeds to the issuer after the total expenses in item 8:           $ 39,242,645

                             (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                   $ -                         $39,013,036     $ 39,013,036

                             Working capital                                                           229,608          229,608
                                                          -----------------                   ----------------- ----------------
                                                                       $ -                         $39,242,645     $ 39,242,645
                                                          =================                   ================= ================

                             (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>



<PAGE>

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,  June 30,  1999 and  December  31,
                             1998.

                             Statements  of  operations  for the  six and  three
                             month periods ended June 30, 1999.

                             Statement of changes in  partners'  capital for the
                             six month period ended June 30, 1999.

                             Statements  of cash  flows  for  the six and  three
                             month periods ended June 30, 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:
August 13, 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