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,
1998

                     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.)

470 Atlantic Avenue, Boston, Massachusetts    
                 02210          
(Address of principal executive offices)      
          (Zip Code)


                              (617) 423-2233  
                               
  (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
9.
<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
                                           March 31,December 31,
                                             1998        1997  

Multi-family apartment complexes,
 less accumulated depreciation of
 $20,616,197 and $20,216,642,   
 <S>                                     <C>         <C>
 respectively                            $10,380,510 $10,519,769 
Cash and cash equivalents                    248,228    552,221
Replacement reserve escrow                   143,820    177,778 
Cash restricted for tenant security deposits 528,324     202,691
Prepaid expenses and other assets            542,683     595,696
Deferred expenses, net of accumulated 
 amortization of $224,444 and $212,971,
 respectively                                295,140    306,613

     Total assets                        $12,138,705$12,354,768


               LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
 Mortgage notes payable                  $19,029,776$19,126,371
 Accounts payable                             57,373       -
 Accrued expenses and other liabilities      618,996    683,413

     Total liabilities                    19,706,145 19,809,784

Partners' deficit (Note 2):
 Investor Limited Partners
  (25,000 Units outstanding)              (6,327,170)(6,220,367)
 Original Limited Partner                   (910,648)  (906,151)
 General Partners                           (329,622)  (328,498)

  Total Partners' deficit                 (7,567,440)(7,455,016)

  Total liabilities and Partners'deficit$12,138,705$12,354,768
  
</TABLE>
  










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

         KRUPP REALTY FUND, LTD. - III AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                     

      For the Three Months       Ended March 31,     
                              1998            1997   

Revenue:
 <S>                                    <C>          <C>
 Rental                                 $1,871,136   $1,768,195
 Other income                               14,835        9,816

    Total revenue                        1,885,971    1,778,011

Expenses:
 Operating (Note 3)                        499,326      511,118
 Maintenance                                85,952       90,052
 Real estate taxes                         139,447      134,841
 Management fees (Note 3)                   92,816       85,398
 General and administrative (Note 3)        33,508       53,767
 Depreciation and amortization             411,028      472,203
 Interest                                  423,290      428,668

    Total expenses                       1,685,367    1,776,047

Net income                              $  200,604   $    1,964 

Allocation of net income (Note 2): 

Investor Limited Partners
 (25,000 Units outstanding)             $  190,574   $    1,866 

Investor Limited Partners
 Per Unit                               $     7.62   $      .07 

Original Limited Partner                $    8,024   $       78 

General Partners                        $    2,006   $       20 
          

</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>
                                        For the Three Months 
                                          Ended March 31,      
                                        1998         1997   

Operating activities:
 <S>                                 <C>          <C> 
 Net income                          $ 200,604    $   1,964 
 Adjustments to reconcile net income
   to net cash provided by operating
   activities:
    Depreciation and amortization      411,028      472,203
    Interest earned on replacement
      reserve escrow                    (1,070)        -
    Changes in assets and liabilities:
      Increase in cash restricted for
       tenant security deposits       (325,633)      (1,580)
      Decrease in prepaid expenses and 
       other assets                     53,013       32,800 
      Increase (decrease) in accounts
       payable                          33,183       (9,100)
      Increase in due to affiliates       -          24,517
      Decrease in accrued expenses and 
       other liabilities               (64,417)     (71,996)

         Net cash provided by operating 
           activities                  306,708      448,808

Investing activities:
Increase (decrease) in accounts  
payable for fixed asset additions       24,190       (9,000)
Additions to fixed assets             (260,296)    (117,396)
Deposits to replacement reserve escrow (15,474)     (15,474)
    Withdrawals from replacement reserve
     escrow                             50,502         -   
    Net cash used in investing 
     activities                       (201,078)    (141,870)

Financing activities:
    Distributions                     (313,028)    (208,685)
    Principal payments on mortgage 
     notes payable                     (96,595)     (88,329)
Net cash used in financing
 activities                           (409,623)    (297,014)

Net increase (decrease) in cash and cash              
 equivalents                          (303,993)       9,924 

Cash and cash equivalents, beginning
 of period                             552,221      468,735

Cash and cash equivalents, end of period$ 248,228 $ 478,659
                                                  
</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, 1997 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, 1998 and
its results of operations and its cash flows
for the three months ended March 31, 1998 and
1997. 

The results of operations for the three months
ended March 31, 1998 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, 1998 is as
follows:

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



<S>                          <C>          <C>       <C>       <C>
Balance at December 31, 1997 $(6,220,367) $(906,151)$(328,498)$(7,455,016)

    Net income                   190,574      8,024     2,006    200,604


    Distributions               (297,377)  (12,521)  (3,130) (313,028)

    Balance at 
    March 31, 1998           $(6,327,170)$(910,648)$(329,622)$(7,567,440)



</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 affiliate of the General Partners sold its
management agreements to BRI OP Limited
Partnership, a subsidiary of Berkshire Realty
Company Inc., a publicly traded real estate
investment trust and an affiliate of the
General Partners, on February 28, 1997.  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
                                          Ended March 31,   

                                         1998       1997  

       <S>                            <C>         <C>
       Property management fees       $ 92,816    $ 85,398  
       Expense reimbursements           19,944      51,078

          Charged to operations        $112,760   $136,476  


</TABLE>
    
    


























         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 Partnership has spent approximately
$260,000 to date and is expected to spend
approximately $995,000 for capital
improvements at its properties in 1998.  The
Partnership believes that the improvements
are necessary to compete in its current
markets, produce quality rental units and
absorb excess demands  at the properties'
respective locations and to both maintain and
increase current occupancy levels.
Renovations include the replacement of
countertops, carpeting, appliances, pavement
upgrades and both interior and exterior
building improvements.  The Partnership
expects to fund these improvements from
established reserves and cash generated from
property operations.

Operations

Net income increased for the three months
ended March 31, 1998, as compared to the
three months ended March 31, 1997, with an
increase in total revenue and a decrease in
total expenses.

Total revenue increased for the three months
ended March 31, 1998, as compared to the
three months ended March 31, 1997, due to
increases in average occupancy rates at all
of the Partnership's properties.  Occupancy
rates for the first quarters of 1998 and 1997
at Brookeville, Hannibal Grove, and Dorsey's
Forge Apartments averaged 100%, 100%, and
99%, and 98%, 99%, and 98%, respectively. 
Other income increased as a result of higher
interest earned on the replacement reserve
escrow account. 

Total expenses decreased for the three months
ended March 31, 1998, as compared to the
three months ended March 31, 1997, as a
result of lower maintenance, general and
administrative and depreciation expenses. 
Maintenance expense decreased due to
completion of landscaping, snow removal
expenditures and interior building repairs
completed at the Partnership's properties
during 1997.  General and administrative
expense decreased as a result of 1997 legal
costs relating to the unsolicited tender
offer to purchase Partnership Units. 
Depreciation expense decreased as fixed asset
additions purchased in previous years became
fully depreciated.




     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 13, 1998