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


                  FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30,1999

                     OR

     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          0-11210



         Krupp Realty Fund, Ltd.-III


          Massachusetts
     04-2763323
(State or other jurisdiction of
        (IRS employer
incorporation or organization)
     identification no.)

One Beacon Street, Boston, Massachusetts
               02108
(Address of principal executive offices)
                       (Zip Code)


               (617) 523-7722
  (Registrant's telephone number, including
area code)


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

The total number of pages in this document is
11.<PAGE>
       PART I.  FINANCIAL INFORMATION

Item 1.  CONSOLIDATED FINANCIAL STATEMENTS

This Form 10-Q contains forward-looking
statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934.
Actual results could differ materially from
those projected in the forward-looking
statements as a result of a number of factors,
including those identified herein.

          KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

                   CONSOLIDATED BALANCE SHEETS


                             ASSETS
<TABLE>
<CAPTION>
                                         (Unaudited)
                                         September 30,December 31,
                                             1999        1998

Multi-family apartment complexes,
  net of accumulated depreciation of
 <S>                                      <C>        <C>
$23,243,661 and $21,977,268, respectively $9,277,242 $  9,784,836
Cash and cash equivalents                      435,454      932,065
Replacement reserve escrow                     211,780      160,954
Cash restricted for tenant security deposits   234,386      229,416
Prepaid expenses and other assets             763,499      614,911
Deferred expenses, net of accumulated
  amortization of $293,278 and $258,861,
  respectively                               226,306     260,723

     Total assets                        $11,148,667$ 11,982,905

                LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
  Mortgage notes payable                 $18,402,530$ 18,726,677
  Accrued expenses and other liabilities                686,263
  601,319
  Due to affiliates (Note 3)                    -        199,500

     Total liabilities                    19,088,793  19,527,496

Partners' deficit (Note 2):
  Investor Limited Partners
   (25,000 Units outstanding)             (6,681,218)(6,305,460)
  Original Limited Partner                  (925,558)  (909,737)
  General Partners                          (333,350)  (329,394)

     Total Partners' deficit              (7,940,126)(7,544,591)

Total liabilities and Partners' deficit  $11,148,667$ 11,982,905
</TABLE>


The accompanying notes are an integral
part of the consolidated financial statements.<PAGE>
          KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

              CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
<TABLE>
<CAPTION>

                        For the Three Months For the Nine Months
                       Ended September 30,   Ended September 30,
                        1999        1998        1999      1998


Revenue:
 <S>                   <C>       <C>         <C>       <C>
 Rental                $2,004,789$1,878,976  $5,828,192$5,625,386
 Other income          12,636       19,141    44,326      49,554

       Total revenue    2,017,425 1,898,117   5,872,518 5,674,940

Expenses:
 Operating (Note 3)       551,992  479,416    1,604,862 1,493,016
 Maintenance              165,240  178,257     475,110   415,508
 Real estate taxes        136,443  139,657     421,254   416,842
 General and administrative
   (Note 3)                19,357   16,649     114,705    52,837
 Management fees (Note 3)  97,416   94,529     289,737   281,469
 Depreciation and
   amortization           444,333  507,842    1,300,8111,327,983
 Interest                 406,315  415,868    1,226,792 1,254,318

       Total expenses   1,821,096 1,832,218   5,433,271 5,241,973


Net income             $  196,329$ 65,899    $439,247  $ 432,967

Allocation of net income
  (Note 2):

  Investor Limited Partners
     (25,000 Units
     outstanding)      $186,513  $62,603     $417,285  $  411,318

  Investor Limited Partners
     Per Unit          $  7.46   $ 2.50      $ 16.69   $   16.45

  Original Limited
     Partner           $7,853    $2,636      $17,570   $  17,319

  General Partners     $1,963    $  660      $4,392    $  4,330
</TABLE>
             The accompanying notes are an integral
      part of the consolidated financial statements.<PAGE>
          KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

              CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
<TABLE>
<CAPTION>

                                          For the Nine Months
                              Ended September 30,
                                             1999       1998
Cash flows from operating activities:
  <S>                                     <C>        <C>
  Net income                              $  439,247 $432,967
  Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization      1,300,811 1,327,983
       Interest earned on replacement reserve
          escrow                            (4,405)    (2,624)
       Changes in assets and liabilities:
          Increase in cash restricted
            for tenant security deposits   (4,970)     (4,696)
          Increase in prepaid expenses and
            other assets                   (148,588)  (22,228)
          Decrease in due to affiliates     (199,500)    -
          Increase (decrease) in accrued
            expenses and other liabilities 84,944     (75,769)

               Net cash provided by operating
                 activities                1,467,5391,655,633

Cash flows from investing activities:
  Additions to fixed assets               (758,800)  (738,948)
  Deposits to replacement reserve escrow   (46,421)   (46,421)
  Withdrawals from replacement reserve escrow  -       86,111

               Net cash used in investing
                 activities               (805,221)    (699,258)

Cash flows from financing activities:
Distributions                             (834,782)    (626,058)
Principal payments on mortgage notes payable
                                          (324,147)    (296,392)

       Net cash used in financing
       activities                         (1,158,9 ) (922,450)

Net (decrease)increase in cash and cash
  equivalents                             (496,611)      33,925

Cash and cash equivalents, beginning of period932,065   552,221

Cash and cash equivalents, end of period  $  435,454 $  586,146

</TABLE>
            The accompanying notes are an integral
            part of the consolidated financial statements.
<PAGE>
          KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(1)Accounting Policies

Certain information and footnote disclosures
normally included in financial statements
prepared in accordance with generally accepted
accounting principles have been condensed or
omitted in this report on Form 10-Q pursuant
to the Rules and Regulations of the Securities
and Exchange Commission.  In the opinion of
the General Partners of Krupp Realty Fund,
Ltd.-III and Subsidiary (the "Partnership"),
the disclosures contained in this report are
adequate to make the information presented not
misleading.  See Notes to Consolidated
Financial Statements included in the
Partnership's Annual Report on Form 10-K for
the year ended December 31, 1998 for
additional information relevant to significant
accounting policies followed by the
Partnership.

In the opinion of the General Partners of the
Partnership, the accompanying unaudited
consolidated financial statements reflect all
adjustments (consisting of only normal
recurring accruals) necessary to present
fairly the Partnership's consolidated
financial position as of September 30, 1999,
its results of operations for the three and
nine months ended September 30, 1999 and 1998,
and its cash flows for nine months ended
September 30, 1999 and 1998.  Certain prior
period balances have been reclassified to
conform with current period consolidated
financial statement presentation.

The results of operations for the three and
nine months ended September 30, 1999 are not
necessarily indicative of the results which
may be expected for the full year.  See
Management's Discussion and Analysis of
Financial Condition and Results of Operations
included in this report.

(2)   Changes in Partners' Deficit

   A summary of changes in Partners' deficit for the nine months
ended                                   September 30, 1999 is as
follows:
<TABLE>
<CAPTION>
                        Investor  Original               Total
                        Limited   Limited     General   Partners'
                        Partners  Partner     Partners   Deficit

    Balance at
      <S>              <C>         <C>      <C>        <C>
      December 31, 1998$(6,305,460)$(909,737)$(329,394)$(7,544,591)

    Net income            417,285    17,570     4,392      439,247

    Distributions        (793,043) (33,391)     (8,348)   (834,782)

    Balance at
    September 30, 1999$(6,681,218)$(925,558)$(333,350)$(7,940,126)

</TABLE>
Continued<PAGE>
KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued



(3)Related Party Transactions

The Partnership pays property management fees
to an affiliate of the General Partners for
management services.  Pursuant to the
management agreements, management fees are
payable monthly at a rate of 5% of the gross
receipts from the properties under management.
The Partnership also reimburses affiliates of
the General Partners for certain expenses
incurred in connection with the operation of
the Partnership and its properties, including
administrative expenses.

   Amounts accrued or paid to the General Partners' affiliates
   were as follows:
<TABLE>
<CAPTION>
                     For the Three Months   For the Nine Months
                      Ended September 30,    Ended
September 30,             1999      1998      1999    1998

<S>                     <C>      <C>      <C>       <C>
Property management fees$97,416  $ 94,529 $289,737  $281,469

Expense reimbursements   40,702    41,522   124,941  102,989

Charged to operations $138,118   $136,051  $414,678     $384,458

</TABLE>

   Expense reimbursements of $25,580 are
   included in prepaid expenses and other
   assets at September 30, 1999 and $199,500
   are included in due to affiliates at
   December 31, 1998.<PAGE>
KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF FINANCIAL CONDITION AND RESULTS OF
         OPERATIONS

This Management's Discussion and Analysis of
Financial Condition and Results of Operations
contains forward-looking statements including
those concerning Management's expectations
regarding the future financial performance and
future events.  These forward-looking
statements involve significant risk and
uncertainties, including those described
herein.  Actual results may differ materially
from those anticipated by such forward-looking
statements.

Liquidity and Capital Resources

The Partnership's ability to generate cash
adequate to meet its needs is dependent
primarily upon the operations of its real
estate investments.  Such ability is also
dependent upon the future availability of bank
borrowings and the potential refinancing and
sale of the Partnership's remaining real
estate investments.  These sources of
liquidity will be used by the Partnership for
payment of expenses related to real estate
operations, capital expenditures, debt service
and expenses.  Cash Flow, if any, as
calculated under Section 8.2(a) of the
Partnership Agreement, will then be available
for distribution to the Partners.

The General Partners, on an ongoing basis,
assess the current and future liquidity needs
in determining the levels of working capital
reserves the Partnership should maintain.
Adjustments to distributions are made when
appropriate to reflect such assessments.  The
current annual distribution rate is $31.72 per
Unit, and is paid semiannually in February and
August.

In the third quarter of 1999, occupancy rates
for the Partnership's properties
("Properties") remained below the historically
high levels achieved in 1998 of between 99%
and 100% as of December 31, 1998 with rates of
approximately 98% (in the case of the Hannibal
Grove Apartments), 97% (in the case of the
Brookeville Apartments) and 98% (in the case
of the Dorsey's Forge Apartments) as of
September 30, 1999.

In March 1999, the Property Manager prepared a
five year capital improvement plan (the
"Capital Plan") setting forth capital
improvements that it believes a third party
purchaser of the Properties would regard as
necessary to maintain the Properties' current
occupancy and rent levels (subject to
inflationary increases), in light of the
increased competition in the markets served by
the Partnership.  The aggregate cost of
implementing the five year Capital Plan is
estimated to be approximately $10,000,000.

The General Partners are in the process of
finalizing the Capital Plan, which may not be
practicable for the Partnership to implement
promptly and fully because of the possible
need for additional investment of capital,
additional borrowings and/or the
discontinuation of future cash distributions
from the Partnership.  However, the General
Partners believe additional capital
improvements will be needed in the future and
may be over and above historical levels.

Continued


KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY


Year 2000

The General Partners of the Partnership
conducted an assessment of the Partnership's
core internal and external computer
information systems and have taken the
necessary steps to understand the nature and
extent of the work required to make its
systems Year 2000 ready in those situations in
which it is required to do so.  The Year 2000
readiness issue concerns the inability of
computerized information systems to accurately
calculate, store or use a date after 1999.
This could result in a system failure or
miscalculations causing disruptions of
operations.  The Year 2000 issue affects
virtually all companies and organizations.

In this regard, the General Partners of the
Partnership, along with certain affiliates,
began a computer systems project in 1997 to
significantly upgrade its existing hardware
and software.  The General Partners completed
the testing and conversion of the financial
accounting operating systems in February 1998.
As a result, the General Partners have
generated operating efficiencies and believe
their financial accounting operating systems
are Year 2000 ready. The General Partners
incurred hardware costs as well as consulting
and other expenses related to the
infrastructure and facilities enhancements
necessary to complete the upgrade and prepare
for the Year 2000.  There are no other
significant internal systems or software that
the Partnership is using at the present time.

The General Partners of the Partnership have
evaluated Year 2000 compliance issues with
respect to its non-financial systems, such as
computer controlled elevators, boilers,
chillers and other miscellaneous systems. The
General Partners do not anticipate any
problems in its non-financial systems.

The General Partners of the Partnership
surveyed the Partnership's material third-
party service providers (including but not
limited to its banks and telecommunications
providers) and significant vendors and
received assurances that such providers and
vendors are to be Year 2000 ready.  The
General Partners do not anticipate any
problems with such providers and vendors that
would materially impact its results of
operations, liquidity or capital resources.

In addition, the Partnership is also subject
to external forces that might generally affect
industry and commerce, such as utility and
transportation company Year 2000 readiness
failures and related service interruptions.
However, the General Partners do not
anticipate these would materially impact its
results of operations, liquidity or capital
resources.

To date, the Partnership has not incurred, and
does not expect to incur, any significant cost
associated with being Year 2000 ready.

Continued


KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY


Operations

Net income increased for the three and nine
months ended September 30, 1999, as compared
to the three and nine months ended September
30, 1998, as expenses for the three months
ended September 30, 1999 remained relatively
stable while total revenue for the period
increased and the increase in expenses for the
nine months ended September 30, 1999 was less
than the increase in total revenue for the
period.

Total revenue increased for the three and nine
months ended September 30, 1999, as compared
to the three and nine months ended September
30, 1998, primarily due to rental rate
increases implemented at all the Partnership's
properties.

Total expenses remained stable for the three
months ended September 30, 1999, as compared
to the same period in 1998 as increases in
operating expenses were offset by decreases in
depreciation and amortization.  Operating
expense increased in 1999 as a result of an
increase in workmen's compensation expense due
to an adjustment to the workmen's compensation
reserve in 1998 as well as increases in
utility expenses.  Depreciation and
amortization expense decreased as previously
purchased fixed assets became fully
depreciated.

Total expenses increased for the nine months
ended September 30, 1999 as compared to the
same period in 1998 as a result of increases
in operating, general and administration and
maintenance expenses.  Operating expense
increased in 1999 as a result of an increase
in workmen's compensation expense due to an
adjustment to the workmen's compensation
reserve in 1998 as well as increases in
payroll and utility expenses.  General and
administrative expenses increased as a result
of increases in legal costs primarily
associated with the Partnership's response to
the tender offer made by Madison Liquidity
Investors 104, LLC to purchase Partnership
units during the second quarter.  Maintenance
increased due to increases in snow removal
expenses at all properties during the first
quarter, increases in landscaping expenses at
Dorsey's Forge and Brookeville and increases
in plumbing expenses at Dorsey's Forge and
Hannibal Grove.

<PAGE>
KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

         PART II - OTHER INFORMATION




Item 1.               Legal Proceedings
                          Response:  None

Item 2.               Changes in Securities
                          Response:  None

Item 3.Defaults upon Senior Securities
                          Response:  None

Item 4.Submission of Matters to a Vote of
Security Holders
                          Response:  None

Item 5.               Other Information
                          Response:  None

Item 6.               Exhibits and Reports on
Form                      8-K
                          Response:  None






















                   <PAGE>
                  SIGNATURE



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.

     Krupp Realty Fund, Ltd. - III

  (Registrant)


BY:/s/Wayne H. Zarozny
 Wayne H. Zarozny
Treasurer and Chief Accounting Officer of The
Krupp   Corporation,  a General Partner



DATE: November 15, 1999