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 June 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)
                                           June 30, December 31,
                                             1999        1998

Multi-family apartment complexes,
  net of accumulated depreciation of
  <S>                                      <C>        <C>
  $22,810,801 and $21,977,268, respectively$ 9,465,072$  9,784,836
Cash and cash equivalents                    739,243     932,065
Replacement reserve escrow                   195,515     160,954
Cash restricted for tenant security deposits 232,775     229,416
Prepaid expenses and other assets            591,429     614,911
Deferred expenses, net of accumulated
  amortization of $281,806 and $258,861,
  respectively                               237,778     260,723

     Total assets                        $11,461,812$ 11,982,905

                LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
  Mortgage notes payable                 $18,513,006$ 18,726,677
  Accrued expenses and other liabilities     652,037     601,319
  Due to affiliates (Note 3)                  15,855     199,500

     Total liabilities                    19,180,898  19,527,496

Partners' deficit (Note 2):
  Investor Limited Partners
   (25,000 Units outstanding)             (6,471,231)(6,305,460)
  Original Limited Partner                  (916,716)  (909,737)
  General Partners                          (331,139)  (329,394)

     Total Partners' deficit              (7,719,086)(7,544,591)

    Total liabilities and
  Partners' deficit                      $11,461,812$ 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 Six Months
                           Ended June 30,       Ended June 30,

                          1999      1998        1999      1998


Revenue:
<S>                   <C>        <C>        <C>       <C>
Rental                $1,933,687 $1,875,274 $3,823,403$3,746,410
 Other income             16,230     15,578  31,690       30,413

       Total revenue    1,949,917 1,890,852  3,855,093  3,776,823

Expenses:
 Operating (Note 3)       529,005   495,483  1,052,870  1,013,600
 Maintenance              208,808   151,299    309,870    237,251
 Real estate taxes        145,700   137,738    284,811    277,185
 General and administrative
 (Note 3)                  61,796    21,471     95,348    36,188
 Management fees (Note 3)  95,712    94,124    192,321   186,940
 Depreciation and
   amortization           444,981   409,113    856,478   820,141
 Interest                 409,292   415,160    820,477  838,450

       Total expenses   1,895,294 1,724,388   3,612,1753,409,755


Net income             $ 54,623  $166,464    $242,918  $ 367,068

Allocation of net income
  (Note 2):

  Investor Limited Partners
     (25,000 Units
     outstanding)      $51,892   $158,141    $230,772  $ 348,715

  Investor Limited Partners
     Per Unit          $ 2.08    $   6.33    $   9.23  $   13.95

  Original Limited
     Partner           $2,185    $ 6,659     $  9,717  $  14,683

  General Partners     $  546    $ 1,664     $  2,429  $   3,670

</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
<TABLE>
<CAPTION>

(Unaudited)
    For the Six Months Ended
             June 30,
                                             1999       1998
Cash flows from operating activities:
  <S>                                     <C>        <C>
  Net income                              $  242,918 $  367,068
  Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization         856,478    820,141
       Interest earned on replacement reserve
          escrow                              (3,613)    (1,070)
       Changes in assets and liabilities:
          Increase in cash restricted
            for tenant security deposits      (3,359)    (2,746)
          Decrease in prepaid expenses and
            other assets                      23,482     52,877
          Decrease in due to affiliates     (183,645)      -
          Increase (decrease) in accrued
            expenses and other liabilities    49,356    (91,415)

               Net cash provided by operating
                 activities                  981,617  1,144,855

Cash flows from investing activities:
  Additions to fixed assets                 (513,769)  (507,669)
  Deposits to replacement reserve escrow     (30,948)   (30,948)
  Withdrawals from replacement reserve escrow   -        50,502
  Increase in accrued expenses and other
  liabilities related to fixed asset additions 1,362        708

               Net cash used in investing
                 activities                 (543,355)  (487,407)

Cash flows from financing activities:
  Distributions                             (417,413)  (313,028)
  Principal payments on mortgage notes payable(213,671)(195,376)

          Net cash used in financing
          activities                        (631,084)  (508,404)

Net increase (decrease) in cash and cash
  equivalents                              (192,822)    149,044

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

Cash and cash equivalents, end of period  $  739,243 $  701,265

</TABLE>


            The accompanying notes are an integral
part of the consolidated financial statements.
        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 June 30, 1999, its
results of operations for the three and six
months ended June 30, 1999 and 1998, and its
cash flows for six months ended June 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
six months ended June 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)Summary of Changes in Partners' Deficit

A summary of changes in Partners' deficit for
the six months ended June 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            230,772     9,717     2,429      242,918

    Distributions        (396,543)(16,696)      (4,174)   (417,413)

    Balance at
      June 30, 1999   $(6,471,231)$(916,716)$(331,139)$(7,719,086)

</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 Six Months
                          Ended June 30,        Ended June 30,
                         1999             1998      1999    1998

<S>                     <C>             <C>       <C>
Property management fees$95,712         $ 94,124  $192,321$186,940

Expense reimbursements    42,669          41,523    84,239  61,467

Charged to operations   $138,381   $135,647 $276,560  $248,407
</TABLE>

   Due to affiliates consisted of expense
   reimbursements of $15,855 and $199,500 at
   June 30, 1999 and December 31, 1998,
   respectively.

(4)    Subsequent event

   On or about July 6, 1999 affiliates of the
   General Partners and Property Manager
   acquired 40% of the Investor Limited
   Partnership Units pursuant to a
   solicitation offer dated May 14, 1999.
   <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
semiannual distribution paid in February, 1999
represents an annualized  rate of $31.72 per
Unit.

In the second quarter of 1999, occupancy rates
for the Partnership's properties
("Properties") declined from the historically
high levels achieved in 1998 of between 99%
and 100% as of December 31, 1998 to
approximately 97% (in the case of the Hannibal
Grove Apartments), 96% (in the case of the
Brookeville Apartments) and 95% (in the case
of the Dorsey's Forge Apartments) as of June
30, 1999.  Moreover, the managing agent for
the Properties (an affiliate of the General
Partners) ("Property Manager") granted
increased rental concessions to tenants in
order to achieve these occupancy rates.

The Property Manager believes that this
decline in occupancy rates is attributable to
significantly increased competition resulting
from newly constructed or renovated housing
entering the markets served by the Properties,
a trend that the Property Manager believes is
expected to continue over the next several
years.

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 Capital Plan is estimated to
be approximately $10,000,000.

The General Partners are in the process of
reviewing 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
will 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 expect all Year 2000
compliance issues identified in its non-
financial systems to be resolved by early in
the fourth quarter.  The General Partners of
the Partnership do not believe that future
efforts to achieve Year 2000 compliance in
non-financial systems will result in material
cost to the Partnership.

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 captial resources.
Nevertheless, the General Partners are
developing contingency plans for all of its
mission-critical functions' to insure business
continuity.

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 decreased for the three and six
months ended June 30, 1999, as compared to the
three and six months ended June 30, 1998, as
the increase in total expenses more than
offset the increase in total revenue.

While total revenue increased for the three
and six months ended June 30, 1999, as
compared to the three and six months ended
June 30, 1998, primarily due to rental rate
increases implemented at all the Partnership's
properties, the increases achieved have not
been significant, as had been planned.

Total expenses increased for the three and six
months ended June 30, 1999, as compared to the
three and six months ended June 30, 1998 as a
result of increases in operating, maintenance,
general and administrative and depreciation
expenses.  Operating expense increased in 1999
as a result of an increase in workmen's
compensation expense due to a one-time
beneficial adjustment to the workmen's
compensation reserve in 1998.  Maintenance
increased due to landscaping expenditures at
Brookeville Apartments during the second
quarter.  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 resulted in an increase in
general and administrative expense.
Depreciation expense increased in conjunction
with increased capital improvements completed
at the Partnership's properties.


<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: August 16, 1999