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 March 31,1999

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

Multi-family apartment complexes,
  net of accumulated depreciation of
  <S>                                      <C>       <C>
  $22,377,293 and $21,977,268, respectively$9,568,041$9,784,836 
Cash and cash equivalents                     637,597   932,065
Replacement reserve escrow                    178,155   160,954 
Cash restricted for tenant security deposits  231,167   229,416
Prepaid expenses and other assets             567,079   614,911
Deferred expenses, net of accumulated 
amortization of $270,333 and $258,861,
respectively                               249,251      260,723

     Total assets                        $11,431,290$ 11,982,905


               LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
  Mortgage notes payable                 $ 18,621,037$18,726,677
  Accrued expenses and other liabilities      567,666    601,319
Due to affiliates (Note 3)                     16,296    199,500

     Total liabilities                     19,204,999 19,527,496

Partners' deficit (Note 2):
  Investor Limited Partners
     (25,000 Units outstanding)          (6,523,123)(6,305,460)
  Original Limited Partner                 (918,901)  (909,737)
  General Partners                           (331,685) (329,394)

  Total Partners' deficit                (7,773,709)(7,544,591)

  Total liabilities and Partners'deficit$11,431,290$11,982,905
     
</TABLE>









            The accompanying notes are an integral
        part of the consolidated financial statements.

         KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF OPERATIONS
                                     
(Unaudited)

      For the Three Months 
                                            Ended March 31,    
<TABLE>
<CAPTION>
                                           1999         1998   

Revenue:
 <S>                                    <C>          <C>
 Rental                                 $1,889,716   $1,871,136
 Other income                               15,460       14,835

    Total revenue                        1,905,176    1,885,971

Expenses:
 Operating (Note 3)                        523,865      499,326
 Maintenance                               101,062       85,952
 Real estate taxes                         139,111      139,447
 General and administrative (Note 3)        33,552       33,508
 Management fees (Note 3)                   96,609       92,816
 Depreciation and amortization             411,497      411,028
 Interest                                  411,185      423,290

    Total expenses                       1,716,881    1,685,367

Net income                              $  188,295   $  200,604 

Allocation of net income (Note 2): 

Investor Limited Partners
 (25,000 Units outstanding)             $  178,880   $  190,574 

Investor Limited Partners
 Per Unit                               $     7.16   $     7.62 

Original Limited Partner                $    7,532   $    8,024 

General Partners                        $    1,883   $    2,006 
</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 Three Months 
                                          Ended March 31,      
                                        1999         1998   

Cash flows from operating activities:
 <S>                                 <C>          <C>
 Net income                          $  188,295   $  200,604 
 Adjustments to reconcile net income
   to net cash provided by operating
   activities:
    Depreciation and amortization       411,497      411,028
    Interest earned on replacement
      reserve escrow                     (1,727)      (1,070)
    Changes in assets and liabilities:
      Increase in cash restricted for
        tenant security deposits         (1,751)    (325,633)
      Decrease in prepaid expenses and 
        other assets                     47,832       53,013 
      Decrease in due to affiliates    (183,204)        -
      Decrease in accrued expenses and 
        other liabilities               (33,653)     (31,234)

         Net cash provided by operating 
           activities                   427,289      306,708

Cash flows from investing activities:
    Increase in accrued expenses and other
      liabilities related to fixed asset
      additions                            -          24,190
    Additions to fixed assets          (183,230)    (260,296)
Deposits to replacement reserve escrow  (15,474)     (15,474)
    Withdrawals from replacement reserve
      escrow                               -          50,502
                                                  
         Net cash used in investing 
           activities                  (198,704)    (201,078)

Cash flows from financing activities:
    Distributions                      (417,413)    (313,028)
    Principal payments on mortgage 
      notes payable                    (105,640)     (96,595)
                                                     
Net cash used in financing
           activities                  (523,053)    (409,623)

Net decrease in cash and cash equivalents(294,468)   (303,993) 

Cash and cash equivalents, beginning
    of period                           932,065      552,221

Cash and cash equivalents, end of period$  637,597$  248,228
                                                  
</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 March 31, 1999 and
its results of operations and its cash flows
for the three months ended March 31, 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 months
ended March 31, 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 three
months ended March 31, 1999 is as follows:


                       Investor  Original              Total
                       Limited   Limited   General    Partners'
                       Partners  Partner   Partners    Deficit 
<TABLE>
<CAPTION>

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

    Net income        178,880       7,532     1,883    188,295

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

    Balance at 
   March 31, 1999$(6,523,123)$(918,901)$(331,685)$(7,773,709)

</TABLE>


Continued
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 paid to the General Partners' affiliates were as
    follows:
<TABLE>
<CAPTION>
                                        For the Three Months
                                          Ended March 31,   

                                         1999       1998  

       <S>                            <C>         <C>
       Property management fees       $ 96,609    $ 92,816  
       Expense reimbursements           41,570      19,944

          Charged to operations        $138,179   $112,760  

</TABLE>
    Due to affiliates consisted of expense reimbursements of
    $16,296 and $199,500 at March 31, 1999 and December 31,
    1998, respectively.
    
         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
distribution paid in February, 1999 was
increased from an annual rate of $23.79 per
Unit, to $31.72 per Unit.

In the first 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 94% (in the case of the
Hannibal Grove Apartments), 97% (in the case
of the Brookeville Apartments) and 97.5% (in
the case of the Dorsey's Forge Apartments) as
of March 31, 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 Columbus, Ohio,
approximately 8,600 new units have been
constructed in the past eighteen months or
are currently under construction, and in
Columbia, Maryland, approximately 961 newly
renovated units have entered the market in
the past year, with an additional 974 units
currently undergoing renovation.

In March 1999, the Property Manager prepared
a 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.

These capital improvements include interior
rehabilitation, replacement of windows,
roofs, piping and HVAC systems, as well as
improvements to parking lots, landscaping and
exterior painting (collectively, the
"Improvements").  The aggregate cost of
implementing the Capital Plan is estimated to
be approximately $10,000,000.  The Property
Manager has advised the General Partners that
in view of the new or newly renovated housing
alternatives in the areas served by the
Properties, the current occupancy rates
enjoyed by the Properties may not be
sustained unless the Capital Plan is
implemented, particularly since many of the
newer residential units will have amenities
such as fitness centers, tennis courts and
swimming pools that the Properties do not.
Continued
KRUPP REALTY FUND, LTD. - III AND
SUBSIDIARY
          

Liquidity and Capital Resources, Continued 

The General Partners have not yet determined
the Partnership's response to the challenges
presented by these market developments. 
However, the Property Manager believes that
prompt and full implementation of the Capital
Plan by the Partnership may not be
practicable because it would require the
investment of additional equity capital,
additional borrowings and/or the
discontinuation of future cash distributions
from the Partnership.

The General Partners of the Partnership have
conducted an assessment of the Partnership's
core internal and external computer
information systems and have taken the
further 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 all
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.  Costs incurred by the
Partnership are not significant to date. 
There are no other systems or software that
the Partnership is using at the present time.

The General Partners of the Partnership are
currently in the process of identifying,
evaluating and remedying the Partnership's
Year 2000 compliance issues with respect to
its non-financial systems, such as computer
controlled elevators, boilers, chillers or
other miscellaneous systems.  The General
Partners are in the process of completing the
Partnership's Year 2000 compliance
initiatives at its properties.  Based on
their identification and assessment efforts
to date, the General Partners believe that
certain of the computer equipment and
software the Partnership currently uses will
require modification or replacement. 
However, the General Partners do not believe
that the future efforts to achieve the
Partnership's Year 2000 compliance
initiatives will result in material cost to
the Partnership or significantly interrupt
services or operations.

The General Partners are in the process of
evaluating the potential adverse impact that
could result from the failure of material
third-party service providers (including but
not limited to its banks and
telecommunications providers) and significant
vendors to be Year 2000 ready.  No estimate
can be made at this time as to the impact of
the readiness of such third parties. 
However, if any of the third party service
providers cease to conduct business due to
Year 2000 related problems, the General
Partners expect to be able to contract with
alternate providers without experiencing any
material adverse effects on the Partnership's
financial condition and results of
operations.  The Partnership is in the
process of coordinating their contingency
plan with the property manager in charge of
operations.

Operations

Net income decreased for the three months
ended March 31, 1999, as compared to the
three months ended March 31, 1998, as the
increase in total expenses more than offset
the increase in total revenue.


 Continued

KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY
          


Operations, Continued

While total revenue increased for the three
months ended March 31, 1999, as compared to
the three months ended March 31, 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 months
ended March 31, 1999, as compared to the
three months ended March 31, 1998, as a
result of increases in operating and
maintenance expenses.  Operating expense
increased primarily due to an increase in
utilities as a result of a 1998 adjustment
for an overestimate of water and sewer costs
at Brookeville Apartments.  Maintenance
expense increased due to landscaping
expenditures at Dorsey's Forge Apartments and
snow removal, interior building repairs and
carpet cleaning completed at Hannibal Grove
Apartments. 


<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:  May 17, 1999