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

                                   FORM 10-K/A
                                 Amendment No. 1


(Mark One)

           [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1997

                                       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 0-22485

                           CNL INCOME FUND XVII, LTD.
             (Exact name of registrant as specified in its charter)

                     Florida                         59-3295393
         (State or other jurisdiction of   (I.R.S. Employer Identification No.)
         incorporation or organization)

                              400 East South Street
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

            Registrant's telephone number, including area code: (407)
422-1574

           Securities registered pursuant to Section 12(b) of the Act:

                 Title of each class:    Name of exchange on which registered:
                         None                       Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                (Title of class)

         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 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


         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:   The  registrant   registered  an  offering  of  units  of  limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $10 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None


<PAGE>



         The Form 10-K of CNL Income Fund XVII, Ltd. for the year ended December
31,  1997 is being  amended  to  provide  additional  disclosure  under  Item 1.
Business, Item 2. Properties and Item 7. Management's Discussion and Analysis of
Financial  Condition and Results of Operations - Capital  Resources,  Short-Term
Liquidity and Long-Term Liquidity.


                                     PART I

Item 1.  Business

         CNL Income Fund XVII, Ltd. (the "Registrant" or the "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on February 10, 1995. The general partners of the Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation  (the  "General  Partners").  Beginning on  September  2, 1995,  the
Partnership offered for sale up to $30,000,000 of limited partnership  interests
(the  "Units")  (3,000,000  Units at $10 per Unit)  pursuant  to a  registration
statement on Form S-11 under the Securities  Act of 1933, as amended,  effective
August 11, 1995.  The offering  terminated  on September 19, 1996, at which date
the maximum  offering  proceeds of $30,000,000  had been received from investors
who  were  admitted  to  the  Partnership  as  limited  partners  (the  "Limited
Partners").


         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national and regional  fast-food,  family-style  and casual  dining
restaurant  chains (the  "Restaurant  Chains").  Net proceeds to the Partnership
from its  offering of Units,  after  deduction  of  organizational  and offering
expenses,  totalled $26,400,000.  The Partnership acquired its first Property on
December 20, 1995.  During the year ended  December  31, 1996,  the  Partnership
acquired 23  additional  Properties,  including  one  Property  owned by a joint
venture in which the Partnership is a co-venturer and one Property owned with an
affiliate,   as  tenants-in-common,   at  an  aggregate  cost  of  approximately
$23,406,500, including acquisition fees and certain acquisition expenses. During
1997, the Partnership  used the majority of its remaining net offering  proceeds
to acquire two additional  Properties,  as tenants-in-common,  with two separate
affiliates, and to establish a working capital reserve of approximately $258,000
for  Partnership  purposes.  In  addition,  the  Partnership  entered  into  two
additional  joint  ventures,  CNL Mansfield Joint Venture and CNL Kingston Joint
Venture,  with  affiliates  of the  General  Partners.  As a result of the above
transactions,  as of December 31, 1997, the Partnership owned 28 Properties. The
28 Properties include interests in three Properties owned through joint ventures
in which the  Partnership  is a  co-venturer  and three  Properties  owned  with
affiliates as  tenants-in-common.  The  Partnership  leases the  Properties on a
triple-net  basis with the lessees  responsible for all repairs and maintenance,
property taxes, insurance and utilities.

                                                         1

<PAGE>




         The  Partnership  will hold its Properties  until the General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation,  net cash flow and  federal  income  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has  elapsed.  In  general,  the General  Partners  plan to seek the sale of the
Properties commencing seven to 12 years after their acquisition. The Partnership
has no  obligation  to sell all or any portion of a Property  at any  particular
time,  except as may be required  under  property  purchase  options  granted to
certain lessees.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases.  The leases of the  Properties  provide for initial terms
ranging from 15 to 20 years (the average being 18 years) and expire between 2011
and 2017. All leases are on a triple-net basis, with the lessees responsible for
all repairs and maintenance, property taxes, insurance and utilities. The leases
of the Properties  provide for minimum base annual rental  payments  (payable in
monthly installments) ranging from approximately $66,200 to $248,700. All of the
leases  provide  for  percentage  rent,  based on sales in excess of a specified
amount.  In addition,  the majority of the leases  provide  that,  commencing in
specified  lease years  (generally  the sixth lease year),  the annual base rent
required under the terms of the lease will increase.


         Generally,  the leases of the Properties  provide for two to five -year
renewal  options  subject to the same terms and conditions as the initial lease.
Certain  lessees also have been granted  options to purchase  Properties  at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  Under the terms of certain  leases,  the option purchase price may
equal the  Partnership's  original  cost to  purchase  the  Property  (including
acquisition costs), plus a specified  percentage from the date of the lease or a
specified  percentage of the  Partnership's  purchase  price,  if that amount is
greater than the Property's fair market value at the time the purchase option is
exercised.

         The leases also  generally  provide that, in the event the  Partnership
wishes to sell the Property  subject to the terms of the lease,  the Partnership
first must offer the lessee the right to purchase the Property on the same terms
and  conditions,  and for the same price, as any offer which the Partnership has
received for the sale of the Property.

Major Tenants


                                                         2

<PAGE>




         During 1997,  four  lessees,  or group of  affiliated  lessees,  of the
Partnership  and its  consolidated  joint  venture,  Golden Corral  Corporation,
National Restaurant  Enterprises,  Inc.,  DenAmerica Corp. and Foodmaker,  Inc.,
each contributed more than ten percent of the Partnership's  total rental income
(including rental income from the Partnership's  consolidated joint venture, the
Partnership's share of rental income from two Properties owned by unconsolidated
joint ventures and three Properties owned with affiliates as tenants-in-common).
As of December 31,  1997,  Golden  Corral  Corporation  and National  Restaurant
Enterprises,   Inc.  were  each  the  lessee  under  leases  relating  to  three
restaurants and DenAmerica Corp. and Foodmaker,  Inc. were each the lessee under
leases relating to four restaurants. It is anticipated that based on the minimum
rental payments required by the leases,  these four lessees each will contribute
more than ten  percent  of the  Partnership's  total  rental  income in 1998 and
subsequent  years.  In addition,  four Restaurant  Chains,  Golden Corral Family
Steakhouse  Restaurants,  ("Golden Corral"),  Jack in the Box, Boston Market and
Burger King, each accounted for more than ten percent of the Partnership's total
rental  income  during  1997  (including  rental  income  from  the  Partnership
consolidated  joint venture,  the Partnership's  share of rental income from two
Properties  owned by  unconsolidated  joint ventures and three  Properties owned
with affiliates as  tenants-in-common).  In subsequent  years, it is anticipated
that these four Restaurant  Chains each will contribute more than ten percent of
the  Partnership's  rental income to which the Partnership is entitled under the
terms of the leases.  Any failure of these  lessees or  Restaurant  Chains could
materially  adversely affect the Partnership's  income. As of December 31, 1997,
no single  tenant  or group of  affiliated  tenants  leased  Properties  with an
aggregate  carrying  value in excess of 20  percent  of the total  assets of the
Partnership.

Joint Venture Arrangements and Tenancy in Common Arrangements

         In  December  1996,  the  Partnership  entered  into  a  joint  venture
arrangement,  CNL/GC El Cajon  Joint  Venture,  with an  unaffiliated  entity to
purchase and hold one  Property.  In  addition,  during  1997,  the  Partnership
entered into two joint venture  arrangements:  CNL Mansfield  Joint Venture with
CNL Income Fund VII, Ltd., an affiliate of the General Partners, to purchase and
hold one  Property;  and CNL  Kingston  Joint  Venture with CNL Income Fund XIV,
Ltd., an affiliate of the General Partners, to purchase and hold one Property.


         Each joint venture  arrangement  provides for the  Partnership  and its
joint venture  partners to share in all costs and benefits  associated  with the
joint venture in proportion to each partner's  percentage  interest in the joint
venture.  The Partnership  owns an 80 percent  interest in CNL/GC El Cajon Joint
Venture,  a 21 percent  interest  in CNL  Mansfield  Joint  Venture and a 60.06%
interest in CNL Kingston Joint Venture.  The  Partnership  and its joint venture
partners are also jointly and severally  liable for all debts,  obligations  and
other  liabilities  of the joint  venture.  Each of the  affiliates is a limited
partnership organized pursuant to the laws of the State of Florida.

                                                         3

<PAGE>




         Each  joint  venture  has an initial  term of 20 years  and,  after the
expiration of the initial term,  continues in existence from year to year unless
terminated  at the  option of either  of the joint  venturers  or by an event of
dissolution.  Events  of  dissolution  include  the  bankruptcy,  insolvency  or
termination of either of the joint venturers,  sale of the Property owned by the
joint  venture and mutual  agreement of the  Partnership  and its joint  venture
partners to dissolve the joint venture.

         The Partnership has management control of CNL/GC El Cajon Joint Venture
and shares  management  control equally with affiliates of the General  Partners
for CNL  Mansfield  Joint  Venture and CNL  Kingston  Joint  Venture.  The joint
venture agreements  restrict any venturer's ability to sell,  transfer or assign
its joint  venture  interest  without  first  offering  it for sale to its joint
venture partner, either upon such terms and conditions as to which the venturers
may agree or, in the event the  venturers  cannot  agree,  on the same terms and
conditions  as any offer  from a third  party to  purchase  such  joint  venture
interest.

         Net cash flow from  operations  of CNL/GC El Cajon Joint  Venture,  CNL
Mansfield  Joint  Venture  and CNL  Kingston  Joint  Venture is  distributed  80
percent, 21 percent and 60.06%, respectively, to the Partnership and the balance
is  distributed  to each other  joint  venture  partner in  accordance  with its
percentage  ownership in the joint  venture.  Any  liquidation  proceeds,  after
paying joint venture debts and liabilities  and funding  reserves for contingent
liabilities,  will be  distributed  first to the  joint  venture  partners  with
positive  capital  account  balances in proportion  to such balances  until such
balances  equal  zero,  and  thereafter  in  proportion  to each  joint  venture
partner's percentage interest in the joint venture.


         In addition to the above joint venture  arrangements,  in October 1996,
the  Partnership  entered into an agreement to hold a Property in  Fayetteville,
North  Carolina,  as  tenants-in-common  with CNL  Income  Fund  XVI,  Ltd.,  an
affiliate of the General  Partners.  The agreement  provides for the Partnership
and the  affiliate  to share in the profits and losses of the  Property  and net
cash  flow  from the  Property  in  proportion  to each  co-tenant's  percentage
interest  in the  Property.  The  Partnership  owns a  19.73%  interest  in this
Property.

         In addition,  during 1997, the Partnership entered into an agreement to
hold a Property in Corpus Christi,  Texas as tenants-in-common,  with CNL Income
Fund XI, Ltd.,  an affiliate of the General  Partners,  and entered into another
agreement  to hold a Property in Akron,  Ohio,  as  tenants-in-common,  with CNL
Income Fund XIII,  Ltd., an affiliate of the General  Partners.  The  agreements
provide  for the  Partnership  and the  affiliates  to share in the  profits and
losses of the Property in proportion to each co- tenant's  percentage  interest.
The  Partnership  owns an approximate 27 percent and 37 percent  interest in the
Properties in Corpus Christi, Texas and Akron, Ohio, respectively.



                                                         4

<PAGE>



         Each of the affiliates is a limited  partnership  organized pursuant to
the laws of the State of Florida. The tenancy in common agreement restricts each
co-tenant's ability to sell, transfer,  or assign its interest in the tenancy in
common's Property without first offering it for sale to the remaining co-tenant.

         The use of joint venture and tenancy in common  arrangements allows the
Partnership  to fully invest its available  funds at times at which it would not
have  sufficient  funds to purchase an additional  property,  or at times when a
suitable  opportunity to purchase an additional  property is not available.  The
use of joint  venture  and  tenancy in common  arrangements  also  provides  the
Partnership  with  increased  diversification  of its portfolio  among a greater
number of properties. In addition,  tenancy in common arrangements may allow the
Partnership  to defer the gain for federal  income tax purposes upon the sale of
the  property  if  the  proceeds  are  reinvested  in  an  additional  property.
Management Services


         CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenants'  books and records,  assisting the
Partnership  in  responding  to  tenant  inquiries  and  notices  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL Fund Advisors,  Inc. an annual fee of one percent of the sum of gross rental
revenues from Properties  wholly owned by the Partnership plus the Partnership's
allocable  share of gross revenues of joint ventures in which the Partnership is
a co-venturer, but not in excess of competitive fees for comparable services.

         The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.


Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the officers and employees of CNL Fund Advisors,  Inc.  perform
certain  services for the  Partnership.  In addition,  the General Partners have
available to them the  resources  and expertise of the officers and employees of
CNL Group, Inc., a diversified real estate company, and its affiliates,  who may
also perform certain services for the Partnership.



                                                         5

<PAGE>



Item 2.  Properties


         As of December 31, 1997, the Partnership owned 28 Properties. Of the 28
Properties,  22 are  owned by the  Partnership  in fee  simple,  three are owned
through joint venture arrangements and three are owned through tenancy in common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and Accumulated Depreciation filed with this report for a listing of
the  Properties  and their  respective  costs,  including  acquisition  fees and
certain acquisition expenses.

Description of Properties

         Land. The Partnership's Property sites ranged from approximately 18,200
to 91,400  square  feet  depending  upon  building  size and  local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.


         The following table lists the Properties owned by the Partnership as of
December 31, 1997 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation filed with this report.

         State                                Number of Properties

         California                                    4
         Florida                                       2
         Georgia                                       2
         Illinois                                      3
         Indiana                                       2
         Michigan                                      1
         North Carolina                                1
         Nevada                                        1
         Ohio                                          2
         South Carolina                                1
         Tennessee                                     3
         Texas                                         6
                                                  ------
         TOTAL PROPERTIES:                            28
                                                  ======


         Buildings.  Each of the Properties owned by the Partnership  includes a
building that is one of a Restaurant  Chain's  approved  designs.  The buildings
generally are  rectangular  and are  constructed  from various  combinations  of
stucco,  steel,  wood,  brick and tile. The sizes of the buildings  owned by the
Partnership ranged from approximately 2,100 to 11,300 square feet. All buildings
on Properties  acquired by the  Partnership are  freestanding  and surrounded by
paved  parking  areas.  Buildings  are suitable for  conversion to various uses,
although  modifications  may be required prior to use for other than  restaurant
operations. As of December 31, 1997, the Partnership had no plans for renovation
of  the  Properties.   Depreciation   expense  is  computed  for  buildings  and
improvements using

                                                         6

<PAGE>



the straight line method using a depreciable life of 40 years for federal income
tax  purposes.  As of  December  31,  1997,  the  aggregate  cost  basis  of the
Properties  owned by the  Partnership and joint ventures  (including  Properties
owned through  tenancy in common  arrangements)  for federal income tax purposes
was $24,986,419 and $2,205,549, respectively.

         The following table lists the Properties owned by the Partnership as of
December 31, 1997 by Restaurant Chain.

         Restaurant Chain                        Number of Properties

         Arby's                                              3
         Black-Eyed Pea                                      1
         Boston Market                                       4
         Burger King                                         4
         Denny's                                             3
         Fazoli's                                            1
         Golden Corral                                       4
         Jack in the Box                                     4
         Popeye's                                            1
         Taco Bell                                           1
         Wendy's                                             2
                                                        ------
         TOTAL PROPERTIES                                   28
                                                        ======


         The General Partners consider the Properties to be well-maintained  and
sufficient for the Partnership's operations.


         The General  Partners  believe that the  Properties are adequately
covered by insurance. In addition, the General Partners have obtained contingent
liability and property coverage for the Partnership.  This insurance is intended
to reduce the Partnership's  exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

         Leases.  The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term  "triple  net"  basis,  meaning  that the  tenant is  responsible  for
repairs,  maintenance,  property taxes,  utilities and insurance.  Generally,  a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures, as may be reasonably necessary, to refurbish buildings,  premises,
signs  and  equipment,  so  as to  comply  with  the  lessee's  obligations,  if
applicable,  under the  franchise  agreement  to reflect the current  commercial
image of its Restaurant Chain. These capital expenditures are required to

                                                         7

<PAGE>



be paid by the lessee  during the term of the lease.  The terms of the leases of
the  Properties  owned by the  Partnership  are  described in Item 1. Business -
Leases.

          At December 31,  1997,  1996,  and 1995,  all of the  Properties  were
occupied. The following is a schedule of the average annual rent for each of the
years ended December 31:

<TABLE>
<CAPTION>

                                                                                       February 10,
                                                                                       1995 (date
                                                                                      of inception)
                                               Year Ended            Year Ended          through
                                               December 31,         December 31,        December 31,
                                               1997                 1996                 1995 (2)
<S> <C>


              Rental Revenues (1)               $2,762,605          $1,190,656               -
              Properties                                28                  24                1
              Average Rent per Unit                $98,664             $49,611               -
</TABLE>

(1) Rental revenues include the Partnership's  share of rental revenues from the
    three  Properties  owned through joint  venture  arrangements  and the three
    properties  owned through  tenancy in common  arrangements.  Rental revenues
    have been adjusted, as applicable, for any amounts for which the Partnership
    has established an allowance for doubtful accounts.


(2) Operations  did not commence until November 4, 1995, the date following when
    the Partnership  received the minimum offering  proceeds of $1,500,000,  and
    such  proceeds  were  released  from  escrow.  The  Property  owned  by  the
    Partnership was not operational as of December 31, 1997.

    The following is a schedule of lease  expirations  for leases in place as of
December 31, 1997 for each of the ten years beginning with 1998 and thereafter.
<TABLE>
<CAPTION>

                                                                                           Percentage of
                                            Number              Annual Rental                Gross Annual
        Expiration Year                 of Leases                  Revenues                 Rental Income
<S> <C>

               1998                             -                          -                            -
               1999                             -                          -                            -
               2000                             -                          -                            -
               2001                             -                          -                            -
               2002                             -                          -                            -
               2003                             -                          -                            -
               2004                             -                          -                            -
               2005                             -                          -                            -
               2006                             -                          -                            -
               2007                             -                          -                            -
               Thereafter                      28                  2,799,614                      100.00%
                                           ------              -------------                -------------
               Totals                          28                  2,799,614                      100.00%
                                           ======              =============                =============
</TABLE>

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's major tenants as of December 31,

                                                         8

<PAGE>



1997 (see Item 1. Business - Major Tenants), are substantially the same as those
described in Item 1. Business - Leases.

      Golden Corral Corporation leases three Golden Corral restaurants. The
initial  term of each  lease is 15 years  (expiring  in  2011)  and the  average
minimum base annual rent is approximately  $157,100 (ranging from  approximately
$127,800 to $190,000).

      National  Restaurant  Enterprises,  Inc.  leases  three  Burger  King
restaurants.  The initial term of each lease is 20 years (expiring  between 2016
and 2017) and the average  minimum  base annual rent is  approximately  $140,400
(ranging from approximately $123,200 to $155,000).

      DenAmerica Corp. leases three Denny's  restaurants and one Black-eyed
Pea  restaurant.  The initial term of each lease is 20 years  (expiring  between
2015 and  2016)  and the  average  minimum  base  annual  rent is  approximately
$118,500 (ranging from approximately $98,700 to $142,600).

      Foodmaker, Inc. leases four Jack in the Box restaurants.  The initial
term of each lease is 18 years (expiring  between 2014 and 2015) and the average
minimum base annual rent is approximately  $89,300  (ranging from  approximately
$83,600 to $109,000).


Competition

         The fast-food and family-style  restaurant business is characterized by
intense  competition.  The restaurants on the Partnership's  Properties  compete
with  independently  owned  restaurants,  restaurants which are part of local or
regional chains, and restaurants in other well-known national chains,  including
those offering different types of food and service.

      At the time the  Partnership  elects to dispose of its  Properties,  other
than as a result of the exercise of tenant options to purchase  Properties,  the
Partnership  will be in  competition  with other  persons and entities to locate
purchasers for its Properties.


                                     PART II


Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations


      The  Partnership  was organized on February 10, 1995, to acquire for cash,
either directly or through joint venture  arrangements,  both newly  constructed
and  existing  restaurant  Properties,  as well as land  upon  which  restaurant
Properties  were to be constructed,  which are leased  primarily to operators of
selected  national  and  regional  fast-food,  family-style  and  casual  dining
Restaurant Chains. The leases are triple-net leases,  with the lessees generally
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities. As of December 31,

                                                         9

<PAGE>



1997,  the  Partnership  owned 28 Properties,  either  directly or through joint
venture and tenancy in common arrangements.


 Capital Resources


      On September 2, 1995, the Partnership  commenced an offering to the public
of up to 3,000,000  Units of limited  partnership  interest.  The  Partnership's
offering of Units  terminated  on September  19, 1996, at which time the maximum
proceeds of $30,000,000 (3,000,000 Units) had been received from investors.  The
Partnership,  therefore,  will derive no additional  capital  resources from the
offering.

      Net  proceeds  to the  Partnership  from  its  offering  of  Units,  after
deduction of organizational and offering expenses,  totalled $26,400,000.  As of
December  31,  1995,  approximately  $1,539,000  had been  used to invest in one
Property and to pay acquisition fees and certain  acquisition  expenses.  During
1996, the Partnership acquired 23 additional Properties,  including one Property
owned by a joint  venture  in which the  Partnership  is a  co-venturer  and one
Property,  owned  with  an  affiliate,  as  tenants-in-common,   at  a  cost  of
approximately   $23,406,500,   including   acquisition  fees  and  miscellaneous
acquisition  expenses.  During 1997,  the  Partnership  used the majority of its
remaining  net  offering  proceeds  to acquire  two  additional  Properties,  as
tenants-in-common,  with affiliates of the General  Partners.  In addition,  the
Partnership entered into two joint ventures, CNL Mansfield Joint Venture and CNL
Kingston  Joint  Venture,  with  affiliates of the General  Partners,  to own an
approximate 21 percent interest and 60.06 percent interest, respectively, in two
Properties. As a result of the above transactions,  as of December 31, 1997, the
Partnership  had acquired 28 Properties,  including  three  Properties  owned by
joint ventures in which the  Partnership is a co-venturer  and three  Properties
owned  with  affiliates  as  tenants-in-common,  and had paid  acquisition  fees
totaling  $1,350,000 to an affiliate of the General Partners.  The remaining net
offering proceeds of approximately  $258,000 from the Partnership's  offering of
Units were reserved for Partnership purposes.

      Until  Properties  were  acquired  by  the  Partnership,  all  Partnership
proceeds were held in short-term,  highly liquid  investments  which the General
Partners  believed to have  appropriate  safety of  principal.  This  investment
strategy provided high liquidity in order to facilitate the Partnership's use of
these  funds to  acquire  Properties  at such time as  Properties  suitable  for
acquisition were located.

      Currently,  the  Partnership's  primary  source  of  capital  is cash from
operations  (which includes cash received from tenants,  distributions  from the
joint ventures and interest  received,  less cash paid for expenses).  Cash from
operations  was  $2,495,114,  $1,232,948 and $9,012 for the years ended December
31, 1997 and 1996 and the period  February 10, 1995 (date of inception)  through
December 31, 1995,  respectively.  The increase in cash from  operations  during
1997 and 1996,  each as compared to the previous  year, is primarily a result of
changes in income and expenses as described in "Results of Operations" below.



                                                        11

<PAGE>


      None of the Properties owned by the Partnership,  or the joint ventures or
tenancy in common arrangements in which the Partnership owns an interest,  is or
may be encumbered.  Subject to certain  restrictions on borrowing,  however, the
Partnership  may borrow  funds but will not encumber  any of the  Properties  in
connection  with any such  borrowing.  The  Partnership  will not borrow for the
purpose of returning capital to the Limited  Partners.  The Partnership will not
borrow  under  arrangements  that  would  make the  Limited  Partners  liable to
creditors of the Partnership. The General Partners further have represented that
they will use their  reasonable  efforts to structure  any  borrowing so that it
will not constitute  "acquisition  indebtedness" for federal income tax purposes
and also will limit the Partnership's  outstanding indebtedness to three percent
of the  aggregate  adjusted  tax  basis  of its  Properties.  In  addition,  the
Partnership  will not borrow  unless it first obtains an opinion of counsel that
such borrowing will not constitute acquisition  indebtedness.  Affiliates of the
General Partners from time to time incur certain operating expenses on behalf of
the  Partnership  for which the  Partnership  reimburses the affiliates  without
interest.


      Currently,  rental  income  from  the  Partnership's  Properties  and cash
reserves  are  invested in money  market  accounts or other  short-term,  highly
liquid  investments such as demand deposit accounts at commercial banks, CDs and
money  market  accounts  with  less than a 30-day  maturity  date,  pending  the
Partnership's  use  of  such  funds  to  pay  Partnership  expenses  or to  make
distributions to partners.  At December 31, 1997, the Partnership had $1,238,799
invested in such  short-term  investments  as compared to $4,716,719 at December
31, 1996. The decrease in the amount invested in short-term  investments  during
1997, as compared to 1996, is primarily a result of the payment of  construction
costs during 1997 relating to the  Properties  that were under  construction  at
December 31, 1996 and the  acquisition  of additional  Properties  through joint
ventures and with affiliates of the General Partners as tenants-in-common during
1997.  As of December 31, 1997,  the average  interest rate earned on the rental
income   deposited  in  demand   deposit   accounts  at  commercial   banks  was
approximately three percent annually.  The funds remaining at December 31, 1997,
after payment of distribution  and other  liabilities,  will be used to meet the
Partnership's working capital and other needs.

Short-Term Liquidity

      The Partnership's  short-term liquidity  requirements consist primarily of
the operating expenses of the Partnership.



                                                        12

<PAGE>



      The Partnership's investment strategy of acquiring Properties for cash and
leasing them under  triple-net  leases to operators who generally meet specified
financial standards minimizes the Partnership's  operating expenses. The General
Partners  believe that the leases will generate cash flow in excess of operating
expenses.

      Due to low operating  expenses and ongoing cash flow, the General Partners
do not believe that working  capital  reserves  are  necessary at this time.  In
addition, because all leases of the Partnership's Properties are on a triple-net
basis,  it is not  anticipated  that a  permanent  reserve for  maintenance  and
repairs is necessary at this time. To the extent,  however, that the Partnership
has insufficient  funds for such purposes,  the General Partners will contribute
to the  Partnership  an  aggregate  amount of up to one percent of the  offering
proceeds for  maintenance  and repairs.  The General  Partners have the right to
cause  the  Partnership  to  maintain  reserves  if, in their  discretion,  they
determine such reserves are required to meet the  Partnership's  working capital
needs.

      The  General  Partners  have the right,  but not the  obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.


         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.   Based  on  cash  from  operations,   the  Partnership   declared
distributions to the Limited Partners of $2,287,500,  $1,166,689 and $28,275 for
the years  ended  December  31, 1997 and 1996 and the period  February  10, 1995
(date of inception)  through  December 31, 1995,  respectively.  This represents
distributions  of $0.76,  $0.55 and $0.08 per Unit for the years ended  December
31, 1997 and 1996 and the period  February 10, 1995 (date of inception)  through
December 31, 1995, respectively.  No amounts distributed or to be distributed to
the  Limited  Partners  for the years ended  December  31, 1997 and 1996 and the
period  February 10, 1995 (date of  inception)  through  December 31, 1995,  are
required to be or have been  treated by the  Partnership  as a return of capital
for  purposes of  calculating  the Limited  Partners'  return on their  adjusted
capital contributions. The Partnership intends to continue to make distributions
of cash available for distribution to Limited Partners on a quarterly basis.


         During the year ended  December  31, 1996 and the period  February  10,
1995 (date of inception)  through  December 31, 1995,  affiliates of the General
Partners   incurred  on  behalf  of  the  Partnership   $231,885  and  $356,450,
respectively,  for certain  organizational and offering  expenses.  In addition,
during the years ended  December  31, 1997 and 1996 and the period  February 10,
1995 (date of inception)  through December 31, 1995, the affiliates  incurred on
behalf of the  Partnership  $11,262,  $69,835  and  $30,424,  respectively,  for
certain acquisition expenses and $59,451,  $64,906 and $790,  respectively,  for
certain  operating  expenses.  As of December 31, 1997 and 1996, the Partnership
owed

                                                        13

<PAGE>



$2,875  and  $17,153,   respectively,  to  related  parties  for  such  amounts,
accounting and  administrative  services and management fees. As of February 28,
1998, the  Partnership  had  reimbursed  the affiliates all such amounts.  Other
liabilities,  including distributions payable, decreased to $865,877 at December
31, 1997,  from  $2,197,032  at December  31,  1996,  as a result of the payment
during 1997, of  construction  costs accrued for certain  Properties at December
31,  1996.  The  decrease is  partially  offset by an increase in  distributions
payable to the Limited  Partners  and an increase in deferred  rental  income at
December  31,  1997.  The General  Partners  believe  that the  Partnership  has
sufficient cash on hand to meet its current working capital needs.


Long-Term Liquidity

      The  Partnership  has no  long-term  debt  or  other  long-term  liquidity
requirements.


Results of Operations

      No significant  operations  commenced until the  Partnership  received the
minimum offering proceeds of $1,500,000 on November 3, 1995.

      The Partnership owned and leased one wholly owned Property during 1995 and
22 wholly owned  Properties  during 1996 and 1997.  During 1996, the Partnership
owned and leased one Property  through a joint venture  arrangement in which the
Partnership  is a  co-venturer,  and  owned  and  leased  one  Property  with an
affiliate  of the  General  Partners,  as  tenants-in-common.  During  1997  the
Partnership was a co-venturer in three joint ventures that each owned and leased
one Property and also owned and leased three  Properties  with affiliates of the
General Partners, as tenants-in-common. As of December 31, 1997, the Partnership
owned,  either  directly or through  joint venture  arrangements,  28 Properties
which are subject to long-term,  triple-net leases. The leases of the Properties
provide  for  minimum   base  annual   rental   payments   (payable  in  monthly
installments) ranging from approximately $66,200 to $248,700.  All of the leases
provide for percentage rent based on sales in excess of a specified  amount.  In
addition, the majority of the leases provide that, commencing in specified lease
years  (generally the sixth lease year), the annual base rent required under the
terms of the lease will increase.  For further  description of the Partnership's
leases and Properties, see Item 1. Business - Leases and Item 2.
Properties, respectively.


      During the years ended December 31, 1997 and 1996, the Partnership and its
consolidated joint venture, CNL/GC El Cajon Joint Venture, earned $2,642,743 and
$1,185,279,  respectively,  in rental  income from  operating  leases and earned
income from direct  financing  leases.  The increase in rental and earned income
during 1997, as compared to 1996, is primarily attributable to the fact that the
majority of the Properties were operational for a full year in 1997, as compared
to a partial year in 1996.  In addition,  for the years ended  December 31, 1997
and 1996, the

                                                        14

<PAGE>




Partnership earned $100,918 and $4,834, respectively, attributable to net income
earned  by  unconsolidated   joint  ventures  in  which  the  Partnership  is  a
co-venturer.  The increase in net income earned by unconsolidated joint ventures
during 1997, as compared to 1996, is primarily  attributable  to the Partnership
investing  in  two  Properties  with  affiliates  of  the  General  Partners  as
tenants-in-common  and in two  joint  ventures  in which  the  Partnership  is a
co-venturer,  during 1997, as described above in "Capital Resources." Net income
earned by joint ventures is expected to increase in 1998 as the Properties owned
by  the  joint  ventures  or  with  affiliates  as  tenants-in-common   will  be
operational  for a full year during  1998 as  compared to a partial  year during
1997.

      During at least one of the years ended  December 31, 1997 and 1996 and the
period  February 10, 1995 (date of inception)  through  December 31, 1995,  five
lessees, or group of affiliated  lessees, of the Partnership,  (i) Golden Corral
Corporation, (ii) National Restaurant Enterprises,  Inc., (iii) DenAmerica Corp.
(iv) RTM Indianapolis, Inc. and RTM Southwest Texas, Inc., (hereinafter referred
to as RTM,  Inc.)  and (v)  Foodmaker,  Corp.,  each  contributed  more than ten
percent of the  Partnership's  total rental income  (including rental and earned
income from the Partnership's  consolidated  joint venture and the Partnership's
share of rental income from two Properties owned by unconsolidated joint venture
and three Properties owned with separate affiliates as tenants-in-common). As of
December 31, 1997, RTM, Inc., Golden Corral Corporation and National  Restaurant
Enterprises,  Inc., were each lessee under leases relating to three  restaurants
and  DenAmerica  Corp. and  Foodmaker,  Inc.,  were each the lessee under leases
relating to four restaurants. It is anticipated that based on the minimum rental
payments required by the leases, Golden Corral Corporation,  National Restaurant
Enterprises,  Inc.,  DenAmerica  Corp. and Foodmaker,  Inc. each will contribute
more than ten  percent  of the  Partnership's  total  rental  income in 1998 and
subsequent years. In addition,  six Restaurant  Chains,  Golden Corral,  Arby's,
Denny's,  Burger King, Jack in the Box and Boston Market each accounted for more
than ten percent of the Partnership's total rental income during at least one of
the years  ended  December  31, 1997 and 1996 and the period  February  10, 1995
(date of  inception)  through  December  31, 1995  (including  rental and earned
income from the  Partnership's  consolidated  joint venture,  the  Partnership's
share of  rental  income  from two  Properties  owned  by  unconsolidated  joint
ventures and three  Properties  owned with  separate  affiliates  of the General
Partners as  tenants-in-common).  In subsequent  years,  it is anticipated  that
Golden  Corral,  Jack in the Box,  Burger  King and  Boston  Market,  each  will
contribute more than ten percent of the Partnership's rental income to which the
Partnership  is  entitled  under the terms of the  leases.  Any failure of these
lessees or Restaurant Chains could materially adversely affect the Partnership's
income.

      During the years ended December 31, 1997 and 1996 and the period  February
10, 1995 (date of inception)  through  December 31, 1995, the  Partnership  also
earned $69,779, $244,406 and $12,153,

                                                        15

<PAGE>




respectively,  in interest  income from  investments in money market accounts or
other  short-term,  highly liquid  investments.  The decrease in interest income
during 1997, as compared to 1996, is primarily  attributable  to the decrease in
the  amount of funds  invested  in  short-term,  liquid  investments  due to the
payment  during 1997, of  construction  costs accrued at December 31, 1996,  the
acquisition of two Properties as  tenants-in-common  with  affiliates,  and as a
result of  acquiring  interests  in two joint  ventures  as  described  above in
"Capital Resources." The increase in interest income during 1996, as compared to
1995, was primarily  attributable to an increase in the amount of funds invested
in  short-term  liquid  investments  as a result of additional  Limited  Partner
contributions during 1996.

      Operating expenses,  including depreciation and amortization expense, were
$569,157, $348,744 and $3,802 for the years ended December 31, 1997 and 1996 and
the period  February  10, 1995 (date of  inception)  through  December 31, 1995,
respectively.  The increase in operating  expenses  during 1996,  as compared to
1995, is primarily  attributable to an increase in  depreciation  expense as the
result of the  acquisition  of additional  Properties  during 1996. The increase
during 1997, as compared to 1996, is primarily attributable to the fact that the
Properties  acquired  during 1996 were  operational  for a full year in 1997, as
compared  to a  partial  year  during  1996.  In  addition,  operating  expenses
increased  during 1997 and 1996,  each as compared to the  previous  year,  as a
result of an increase in  management  fees  derived  from the  increased  rental
revenues, as described above.  Operating expenses also increased during 1997, as
compared to 1996, as a result of the Partnership incurring taxes relating to the
filing of  various  state tax  returns  during  1997.  Operating  expenses  also
increased  during  1996,  as  compared  to 1995,  as a result of an  increase in
administrative  expenses  associated  with  operating  the  Partnership  and its
Properties.

      The General  Partners of the  Partnership  are in the process of assessing
and addressing the impact of the year 2000 on their computer  package  software.
The  hardware and  built-in  software  are  believed to be year 2000  compliant.
Accordingly, the General Partners do not expect this matter to materially impact
how the  Partnership  conducts  business  nor its  current or future  results of
operations or financial position.

      The  Partnership's  leases as of December 31, 1997, are triple-net  leases
and contain  provisions that the General  Partners  believe mitigate the adverse
effect of inflation.  Such provisions  include clauses  requiring the payment of
percentage rent based on certain restaurant sales above a specified level and/or
automatic  increases  in base rent at  specified  times  during  the term of the
lease.  Management  expects  that  increases in  restaurant  sales volume due to
inflation  and real sales growth  should  result in an increase in rental income
over  time.  Continued  inflation  also may cause  capital  appreciation  of the
Partnership's Properties.  Inflation and changing prices, however, also may have
an  adverse  impact on the sales of the  restaurants  and on  potential  capital
appreciation of the Properties.

                                                        16

<PAGE>




                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) 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,  on the 29th day of
July, 1999.

                                         CNL INCOME FUND XVII, LTD.

                                         By:      CNL REALTY CORPORATION
                                                  General Partner

                                                  /s/ Robert A. Bourne
                                                  ---------------------------
                                                  ROBERT A. BOURNE, President


                                         By:      ROBERT A. BOURNE
                                                  General Partner

                                                  /s/ Robert A. Bourne
                                                  ---------------------------
                                                  ROBERT A. BOURNE


                                         By:      JAMES M. SENEFF, JR.
                                                  General Partner

                                                  /s/ James M. Seneff, Jr.
                                                  ---------------------------
                                                  JAMES M. SENEFF, JR.


<PAGE>


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>


Signature                               Title                                   Date
<S> <C>
/s/ Robert A. Bourne                President, Treasurer and Director        July 29, 1999
--------------------------          (Principal Financial and Accounting
Robert A. Bourne                    Officer)


/s/ James M. Seneff, Jr.            Chief Executive Oficer and Director      July 29, 1999
--------------------------          (Principal Executive Officer)
James M. Seneff, Jr.



</TABLE>