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

                                   FORM 10-Q


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                 For the Quarterly Period Ended March 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 #0-19220


                    Inland Land Appreciation Fund II, L.P. 
            (Exact name of registrant as specified in its charter)


         Delaware                                     #36-3664407
  (State or other jurisdiction      (I.R.S. Employer Identification Number) 
of incorporation or organization)


       2901 Butterfield Road, Oak Brook, Illinois         60521
        (Address of principal executive office)         (Zip Code)


    Registrant's telephone number, including area code:  630-218-8000


                                   N/A                        
                (Former name, former address and former fiscal
                      year, if changed since last report)


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   






                                      -1-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                                Balance Sheets

                     March 31, 1997 and December 31, 1996
                                  (unaudited)



                                    Assets
                                    ------

                                                       1997          1996
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $ 3,920,297     3,904,046
  Investments in marketable securities (Note 1)...   1,811,736     2,232,785
  Accounts and accrued interest receivable........     105,294        28,778
  Deposits and other current assets...............       8,738         2,477
                                                   ------------  ------------
Total current assets..............................   5,846,065     6,168,086
                                                   ------------  ------------

Investment properties (including acquisition
  fees paid to Affiliates of $2,020,407 and
  $2,020,973 at March 31, 1997 and December 31,
  1996, respectively) (Notes 1 and 3):
  Land and improvements...........................  41,010,495    40,514,211
  Buildings.......................................      93,082        93,082
                                                   ------------  ------------
                                                    41,103,577    40,607,293
  Less accumulated depreciation...................      13,057        12,282
Total investment properties, net of accumulated    ------------  ------------
  depreciation....................................  41,090,520    40,595,011
                                                   ------------  ------------
Total assets...................................... $46,936,585    46,763,097
                                                   ============  ============


















                See accompanying notes to financial statements.


                                      -2-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                     March 31, 1997 and December 31, 1996
                                  (unaudited)



                      Liabilities  and Partners' Capital
                      ----------------------------------

                                                       1997          1996
                                                       ----          ----
Current liabilities:
  Accounts payable................................ $    67,047        65,387
  Accrued real estate taxes.......................     131,291       104,059
  Due to Affiliates (Note 3)......................      95,573         4,307
  Unearned income.................................     100,340        70,088
                                                   ------------  ------------
Total current liabilities.........................     394,251       243,841
                                                   ------------  ------------
Partners' capital (Notes 1 and 2):
  General Partner:
   Capital contribution...........................         500           500
   Cumulative net income..........................     449,190       449,394
   Cumulative cash distributions..................     (93,034)      (93,034)
                                                   ------------  ------------
                                                       356,656       356,860
  Limited Partners:                                ------------  ------------
   Units of $1,000. Authorized 60,000 Units,
    50,184.52 Units outstanding (net of offering
    costs of $7,532,439, of which $2,535,445 was
    paid to Affiliates)...........................  42,655,371    42,655,371
   Cumulative net income..........................   6,367,366     6,343,988
   Cumulative cash distributions..................  (2,837,059)   (2,836,963)
                                                   ------------  ------------
                                                    46,185,678    46,162,396
                                                   ------------  ------------
    Total Partners' capital.......................  46,542,334    46,519,256
                                                   ------------  ------------
Total liabilities and Partners' capital........... $46,936,585    46,763,097
                                                   ============  ============










                See accompanying notes to financial statements.


                                      -3-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                           Statements of Operations

              For the three months ended March 31, 1997 and 1996
                                  (unaudited)

                                                       1997          1996
Income:                                                ----          ----
  Sale of investment properties (Notes 1 and 3)... $    77,887       430,140
  Rental income (Note 4)..........................      91,907        76,740
  Interest income.................................      85,612        72,947
                                                   ------------  ------------
                                                       255,406       579,827
                                                   ------------  ------------
Expenses:
  Cost of investment properties sold..............      34,337       263,002
  Professional services to Affiliates.............      10,278         4,765
  Professional services to non-affiliates.........      32,027        29,974
  General and administrative expenses to
    Affiliates....................................      10,141        12,013
  General and administrative expenses to
    non-affiliates................................      13,752        21,926
  Marketing expenses to Affiliates................      41,013        21,712
  Marketing expenses to non-affiliates............      24,078         5,582
  Land operating expenses to Affiliates...........      22,901        23,218
  Land operating expenses to non-affiliates.......      42,930        34,744
  Depreciation....................................         775           776
                                                   ------------  ------------
                                                       232,232       417,712
                                                   ------------  ------------
Net income........................................ $    23,174       162,115
                                                   ============  ============

Net income (loss) allocated to:
  General Partner.................................        (204)          (50)
  Limited Partners................................      23,378       162,165
                                                   ------------  ------------
Net income........................................ $    23,174       162,115
                                                   ============  ============

Net loss allocated to the one General Partner
  Unit............................................ $      (204)          (50)
                                                   ============  ============
Net income per weighted average Limited
  Partnership Units (50,184.52 and 50,190.46
  for the three months ended March 31, 1997
  and 1996, respectively)......................... $       .47          3.23
                                                   ============  ============





                See accompanying notes to financial statements.


                                      -4-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

              For the three months ended March 31, 1997 and 1996
                                  (unaudited)


                                                       1997          1996
Cash flows from operating activities:                  ----          ----
  Net income...................................... $    23,174       162,115
  Adjustments to reconcile net income to net
      cash provided by operating activities:
    Depreciation..................................         775           776
    Gain on sale of investment properties.........     (43,550)     (167,138)
    Changes in assets and liabilities:
      Accounts and accrued interest receivable....     (76,516)      (19,831)
      Deposits and other current assets...........      (6,261)       (6,933)
      Accounts payable............................       1,660        90,885
      Accrued real estate taxes...................      27,232        17,019
      Due to Affiliates...........................      91,266        66,127
      Unearned income.............................      30,252        48,212
                                                   ------------  ------------
Net cash provided by operating activities.........      48,032       191,232
                                                   ------------  ------------
Cash flows from investing activities:
  Additions to investment properties..............    (530,621)     (218,646)
  Sale (purchase) of short-term investments.......     421,049          -
  Proceeds from sale of investment properties.....      77,887       430,140
Net cash provided by (used in) investing           ------------  ------------
  activities......................................     (31,685)      211,494
                                                   ------------  ------------
Cash flows from financing activities:
  Cash distributions..............................         (96)          (55)
                                                   ------------  ------------
Net cash used in financing activities.............         (96)          (55)
                                                   ------------  ------------
Net increase in cash and cash equivalents.........      16,251       402,671
Cash and cash equivalents at beginning of
  period..........................................   3,904,046     5,097,705
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $ 3,920,297     5,500,376
                                                   ============  ============











                See accompanying notes to financial statements.


                                      -5-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

                                March 31, 1997
                                  (unaudited)


Readers of this  Quarterly  Report  should  refer  to the Partnership's audited
financial statements for the  fiscal  year  ended  December 31, 1996, which are
included  in  the  Partnership's  1996   Annual  Report,  as  certain  footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this Report.

(1)  Organization and Basis of Accounting

The Registrant, Inland Land Appreciation  Fund II, L.P. (the "Partnership"), is
a limited partnership formed on June 28, 1989, pursuant to the Delaware Revised
Uniform Limited Partnership Act, to  invest  in undeveloped land on an all-cash
basis and realize appreciation of such  land  upon resale. On October 25, 1989,
the Partnership commenced an Offering of 30,000 (subject to increase to 60,000)
Limited Partnership Units pursuant to  a  Registration under the Securities Act
of 1933.  The  Amended  and  Restated  Agreement  of  Limited  Partnership (the
"Partnership Agreement") provides for Inland Real Estate Investment Corporation
to be the General Partner. On  October 24, 1991, the Partnership terminated its
Offering of Units, with total  sales  of  50,476.17  Units, at $1,000 per Unit,
resulting in $50,476,170 in gross  offering proceeds, not including the General
Partner's capital contribution of $500. All  of the holders of these Units have
been admitted to the Partnership.  As  of  March  31, 1997, the Partnership has
repurchased a total of 291.65 Units  for $288,360 from various Limited Partners
through the Unit Repurchase Program.  Under this program, Limited Partners may,
under certain circumstances, have their  Units  repurchased for an amount equal
to their Invested Capital.

The preparation of financial  statements  in conformity with generally accepted
accounting principles requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets  and liabilities and disclosure of
contingent assets and liabilities at  the  date of the financial statements and
the reported amounts of  revenues  and  expenses  during the reporting periods.
Actual results could differ from those estimates.

Offering costs have been offset against the Limited Partners' capital accounts.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or  less  to  be  cash  equivalents and are carried at
cost, which approximates market.

Investments purchased with a maturity of three months or more are considered to
be  investments  in  marketable  securities  and  are  carried  at  cost, which
approximates market.






                                      -6-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                                March 31, 1997
                                  (unaudited)


The Partnership adopted  Statement  of  Financial  Accounting Standards No. 121
"Accounting for the Impairment of  Long-Lived  Assets and for Long-Lived Assets
to be Disposed of" ("SFAS 121") as required in the first quarter of 1996.  SFAS
121 requires that the Partnership record  an impairment loss on its property to
be held for investment whenever  its  carrying  value cannot be fully recovered
through estimated undiscounted  future  cash  flows  from  their operations and
sale.  The  amount  of  the  impairment  loss  to  be  recognized  would be the
difference between the property's  carrying  value and the property's estimated
fair value.    The  adoption  of  SFAS  121  did  not  have  any  effect on the
Partnership's financial position, results of operations or liquidity.   

For  vacant  land  parcels   and   parcels  with  insignificant  buildings  and
improvements,  the  Partnership  uses  the  area  method  of  allocation, which
approximates the relative sales method of  allocation, whereby a per acre price
is used as the standard allocation  method  for  land purchases and sales.  The
total cost of the parcel is divided by the total number of acres to arrive at a
per acre  price.    For  parcels  with  significant  buildings and improvements
(Parcel 24, described in  Note  3),  the  Partnership records the buildings and
improvements  at  a  cost  based  upon  the  appraised  value  at  the  date of
acquisition.  Building and improvements are depreciated using the straight-line
method of  depreciation  over  a  useful  life  of  thirty  years.   Repair and
maintenance expenses  are  charged  to  operations  as  incurred.   Significant
improvements are capitalized and depreciated over their estimated useful lives.

The Partnership is required to  pay  a  withholding tax to the Internal Revenue
Service with  respect  to  a  Partner's  allocable  share  of the Partnership's
taxable net income, if the  Partner  is  a foreign person. The Partnership will
first pay the withholding tax  from  the  distributions to any foreign partner,
and to the extent that the tax exceeds the amount of distributions withheld, or
if there have been no distributions  to  withhold, the excess will be accounted
for as a distribution to the foreign partner. Withholding tax payments are made
every April, June, September and December.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the Partners rather than the Partnership.

In  the  opinion  of  management,  the  financial  statements  contain  all the
adjustments necessary, which  are  of  a  normal  recurring  nature, to present
fairly  the  financial  position  and  results  of  operations  for  the period
presented herein.  Results of interim periods are not necessarily indicative of
results to be expected for the year.






                                      -7-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                                March 31, 1997
                                  (unaudited)


(2)  Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of the  Partnership.  Such costs are included in
professional services and general and administrative expenses to Affiliates, of
which $24,426 and $4,307 were  unpaid  as  of  March  31, 1997 and December 31,
1996, respectively.

The General Partner is entitled to  receive Asset Management Fees equal to one-
quarter of 1% of  the  original  cost  to  the  Partnership of undeveloped land
annually, limited to a cumulative total over  the life of the Partnership of 2%
of the land's original  cost  to  the  Partnership.    Such fees of $22,901 and
$23,218 have been incurred for the three  months ended March 31, 1997 and 1996,
respectively, and are included  in  land  operating  expenses to Affiliates, of
which $22,901 was unpaid as of March 31, 1997.

An Affiliate of the General  Partner  performed sales marketing and advertising
services for the Partnership and  was  reimbursed  (as set forth under terms of
the Partnership Agreement) for direct costs.  Such costs of $41,013 and $21,712
have been incurred and are included in marketing expenses to Affiliates for the
three months ended March 31, 1997  and 1996, respectively, of which $40,996 was
unpaid as of March 31, 1997.

An Affiliate of  the  General  Partner  performed  property upgrades, rezoning,
annexation and other activities  to  prepare the Partnership's land investments
for sale and  was  reimbursed  (as  set  forth  under  terms of the Partnership
Agreement)  for salaries and direct  costs.   The Affiliate did not recognize a
profit on any project.  Such costs  of  $7,250 have been incurred for the three
months ended March 31, 1997 and are included in investment properties, of which
$7,250 was unpaid as of March 31, 1997.
















                                      -8-



<TABLE>                                         INLAND LAND APPRECIATION FUND II, L.P.
                                                        (a limited partnership)

                                                     Notes to Financial Statements
                                                              (continued)

(3) Investment Properties
<CAPTION>
The following real property investments are owned by the Partnership as of March 31, 1997:
                                                                                                            Total        
                   Gross                           Initial Costs                 Costs                    Remaining     Current
                   Acres   Purchase/  --------------------------------------  Capitalized     Costs of     Costs of    Year Gain
Parcel Location: Purchased   Sales      Original   Acquisition               Subsequent to    Property    Parcels at    on Sale
  #      County   (Sold)     Date         Costs       Costs        Total      Acquisition       Sold       3/31/97     Recognized
------ --------- --------- ---------- ------------ ------------ ------------ -------------- ------------ ------------ ------------
   <S>   <C>      <C>       <C>        <C>            <C>        <C>              <C>            <C>      <C>               <C>
   1     McHenry  372.759   04/25/90 $ 2,114,295      114,070    2,228,365        243,964         -       2,472,329         -

   2     Kendall   41.118   07/06/90     549,639       43,889      593,528          7,327         -         600,855         -

   3     Kendall  120.817   11/06/90   1,606,794      101,863    1,708,657          5,893         -       1,714,550         -

   4     Kendall  299.025   06/28/91   1,442,059       77,804    1,519,863            661         -       1,520,524         -

   5     Kane     189.0468  02/28/91   1,954,629       94,569    2,049,198        146,302         -       2,195,500         -

   6     Lake      57.3345  04/16/91     904,337       71,199      975,536         16,172        4,457      987,251         -
                    (.258)  10/01/94

   7     McHenry   56.7094  04/22/91     680,513       44,444      724,957      1,144,430       34,337    1,835,050       43,550
                    (.8724) 02/12/97

   8     Kane     325.394   06/14/91   3,496,700      262,275    3,758,975         24,171       10,000    3,773,146         -
                    (.870)  04/03/96

   9     Will       9.867   08/13/91     217,074          988      218,062          1,037         -         219,099         -

  10     Will     150.66    08/20/91   1,866,716       89,333    1,956,049            274         -       1,956,323         -

  11     Will     138.447   08/20/91     289,914       20,376      310,290          2,700      312,990         -            -
                 (138.447)  05/03/93

  12     Will      44.732   08/20/91     444,386       21,988      466,374            191         -         466,565         -

  13     Will       6.342   09/23/91     139,524          172      139,696           -         139,696         -            -
                   (6.342)  05/03/93

  14     Kendall   44.403   09/03/91     888,060       68,210      956,270            711         -         956,981         -

  15     Kendall  100.364   09/04/91   1,050,000       52,694    1,102,694         52,222      177,298      977,618         -
                   (5.000)  09/01/93
                  (11.000)  12/01/94

  16     McHenry  168.905   09/13/91   1,402,058       69,731    1,471,789         79,954         -       1,551,743         -

  17     Kendall    3.462   10/30/91     435,000       22,326      457,326            448         -         457,774         -

  18     McHenry  139.1697  11/07/91   1,160,301       58,190    1,218,491        225,469         -       1,443,960         -
                                     ------------ ------------ ------------ -------------- ------------ ------------ ------------
        Subtotal                     $20,641,999    1,214,121   21,856,120      1,951,926      678,778   23,129,268       43,550
</TABLE>

                                      -9-



<TABLE>
                                              INLAND LAND APPRECIATION FUND II, L.P.
                                                      (a limited partnership)

                                                   Notes to Financial Statements
                                                            (continued)

(3) Investment Properties (continued)
<CAPTION>                                                                                                    Total
                   Gross                           Initial Costs                 Costs                     Remaining    Current
                   Acres   Purchase/  --------------------------------------  Capitalized     Costs of      Costs of   Year Gain
Parcel Location: Purchased   Sales      Original   Acquisition               Subsequent to    Property     Parcels at   on Sale
  #      County   (Sold)     Date         Costs       Costs        Total      Acquisition       Sold        3/31/97    Recognized
------ --------- --------- ---------- ------------ ------------ ------------ -------------- ------------ ------------ ------------
  <S>   <C>       <C>       <C>        <C>           <C>         <C>             <C>           <C>        <C>             <C>
        Subtotal                      $20,641,999    1,214,121   21,856,120      1,951,926      678,778   23,129,268      43,550

  19       Kane   436.236   12/13/91    4,362,360      321,250    4,683,610        118,152         -       4,801,762        -

  20       Kane &
         Kendall  400.129   01/31/92    1,692,623      101,318    1,793,941         46,673         -       1,840,614        -

  21     Kendall   15.013   05/26/92      250,000       23,844      273,844          6,331         -         280,175        -

  22     Kendall  391.959   10/30/92    3,870,000      283,186    4,153,186         90,460      164,804    4,078,842        -
                  (10.000)  01/06/94
                   (5.538)  01/05/96

  23 (c) Kendall  133.2074  10/30/92    3,231,942      251,373    3,483,315      4,257,244    4,003,880    3,736,679        -
                  (11.525)  07/16/93
                  (44.070)  Var 1995
                   (8.250)  Var 1996

  23A(a) Kendall     .2676  10/30/92      170,072       12,641      182,713           -         182,713         -           -
                    (.2676) 03/16/93

  24     Kendall    3.908   01/21/93      645,000       56,316      701,316            736         -         702,052        -

  24A(b) Kendall     .406   01/21/93      155,000       13,533      168,533           -            -         168,533        -

  25     Kendall  656.687   01/28/93    1,625,000       82,536    1,707,536         22,673    1,730,209         -           -
                 (656.687)  10/31/95

  26     Kane      89.511   03/10/93    1,181,555       89,312    1,270,867         54,634         -       1,325,501        -

  27     Kendall   83.525   03/11/93      984,474       54,846    1,039,320            831         -       1,040,151        -
                                      ------------ ------------ ------------ -------------- ------------ ------------ -----------
                                      $38,810,025    2,504,276   41,314,301      6,549,660    6,760,384   41,103,577      43,550
                                      ============ ============ ============ ============== ============ ============ ===========


(a) Included in the purchase of Parcel 23 was a newly constructed 2,500 square foot house. The house was sold in March 1993.

(b) Included in the purchase of Parcel 24 was a 2,400 square foot office building.

(c) Parcel 23, annexed and zoned to Oswego, Illinois as part  of  the  Mill Race Creek subdivision, consists of two parts: a 28-acre
    multi-family portion and a 105-acre single-family portion. The Partnership sold the 28-acre multi-family portion on June 7, 1995
    and as of March 31, 1997, 112 of the 243 single-family lots. Of the 131 remaining single-family lots, 122 are under contract for
    sale with homebuilders.
</TABLE>

                                     -10-



                    INLAND LAND APPRECIATION FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                                March 31, 1997
                                  (unaudited)


(3) Investment Properties (continued)

(d) Reconciliation of real estate owned:
                                                       1997          1996
                                                       ----          ----
  Balance at January 1,........................... $40,607,293    40,892,494
  Additions during period.........................     530,621       888,754
  Sales during period.............................      34,337     1,173,955
                                                   ------------  ------------
  Balance at end of period........................ $41,103,577    40,607,293
                                                   ============  ============

(e) Reconciliation of accumulated depreciation:
                                                       1997          1996
                                                       ----          ----
  Balance at January 1,........................... $    12,282         9,179
  Depreciation expense............................         775         3,103
  Sales during period.............................        -             -
                                                   ------------  ------------
  Balance at end of period........................ $    13,057        12,282
                                                   ============  ============


(4) Farm Rental Income

The Partnership has determined that all leases relating to the farm parcels are
operating leases.  Accordingly, rental income is reported when earned.

As of March 31, 1997, the Partnership  had farm leases of generally one year in
duration, for approximately 3,045 acres of the approximately 3,580 acres owned.

















                                     -11-



Item 2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
         Results of Operations


Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and  elsewhere in this quarterly report on
Form 10-Q constitute of "forward-looking  statements" within the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors which  may  cause  the  Partnership's  actual  results,  performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied  by  these forward-looking statements.  These
factors include,  among  other  things,  federal,  state  or local regulations;
adverse changes in general economic  or local conditions; inability of borrower
to meet financial  obligations;  uninsured  losses;  and potential conflicts of
interest between the  Partnership  and  its  Affiliates,  including the General
Partner.

Liquidity and Capital Resources

October 25, 1989, the Partnership  commenced  an Offering of 30,000 (subject to
increase to  60,000)  Limited  Partnership  Units  pursuant  to  a Registration
Statement on Form S-11 under the  Securities  Act of 1933. On October 24, 1991,
the Partnership terminated its Offering of Units, with total sales of 50,476.17
Units, at $1,000 per Unit, resulting in $50,476,170 in gross offering proceeds,
not including the General Partner's  capital  contribution  of $500. All of the
holders of these  Units  have  been  admitted  to  the Partnership. The Limited
Partners of  the  Partnership  will  share  in  their  portion  of  benefits of
ownership of  the  Partnership's  real  property  investments  according to the
number of Units held.

The Partnership used $41,314,301 of gross  offering proceeds to purchase, on an
all-cash basis, twenty-seven  parcels  of  undeveloped  land and two buildings.
These investments include the payment  of  the purchase price, acquisition fees
and acquisition costs of such properties.   Three of the parcels were purchased
during 1990, sixteen during 1991, four during 1992 and four during 1993.  As of
March 31, 1997, the  Partnership  has  had  multiple sales transactions through
which it has disposed  of  approximately  900  acres of the approximately 4,480
acres originally owned.  As  of  March  31, 1997, cumulative distributions have
totaled $2,837,059 to the Limited Partners  and $93,034 to the General Partner.
Of the $2,837,059 distributed to the Limited Partners, $2,116,059 was net sales
proceeds (which represents a  return  of  Invested  Capital,  as defined in the
Partnership Agreement) and $721,000 was from operations.  As of March 31, 1997,
the Partnership has used $6,549,660 of working capital reserve for rezoning and
other activities.  Such  amounts  have  been  capitalized  and  are included in
investment properties.

The Partnership's capital needs and resources will vary depending upon a number
of factors, including the extent to which the Partnership conducts rezoning and
other  activities  relating  to  utility  access,  the  installation  of roads,
subdivision and/or annexation of land to a municipality, changes in real estate
taxes affecting the Partnership's land, and the amount of revenue received from
leasing.  As of March  31,  1997,  the  Partnership  owns, in whole or in part,
twenty-four of its twenty-seven original  parcels  and one office building, the
majority of which are  leased  to  local  tenants and are generating sufficient
cash flow from leases to cover property taxes and insurance.


                                     -12-



At March 31, 1997, the  Partnership  had cash, cash equivalents and investments
in marketable securities  of  $5,732,033,  of  which  approximately $298,600 is
reserved for the repurchase of Units  through the Unit Repurchase Program.  The
remaining $5,433,433 is available to  be  used for the Partnership expenses and
liabilities, cash distributions to  partners  and other activities with respect
to some or all of its land  parcels.   The Partnership has increased its parcel
sales effort in anticipation of rising land values.

The Partnership plans to enhance the  value of its land through pre-development
activities such as rezoning, annexation  and land planning. The Partnership has
already been successful in, or  is  in the process of, pre-development activity
on a majority of the Partnership's  land  investments. Parcel 1, annexed to the
Village of Huntley and  zoned  for  residential and commercial development, has
improvements in  planning  stage  and  sites  are  being  marketed to potential
buyers. Parcel 7, annexed to the  Village of McHenry and zoned residential, has
improvements underway and  sites  are  being  marketed.  Sixty-five lots of the
total 130 single-family lots are  under  contract  (see  Note 3 of the Notes to
Financial Statements for sale  of  the  first  two  lots on February 12, 1997).
Parcel 18,  zoned  for  multi-  and  single-family  use,  is  being marketed to
potential homebuilders. Parcel 15  has  been  zoned  with development and sales
marketing underway. Parcel 23, the  Ponds  at  Mill Race Creek Subdivision, has
234 of the total 243  single-family  lots  under contract with homebuilders, of
which 112 have already closed (see Note  3 of the Notes to Financial Statements
for further discussion on Parcel 23).

Results of Operations

Income from the sale of investment properties and cost of investment properties
sold recorded for the three months ended March 31, 1997 is a result of the sale
of lots 92 and 93 in the Olde Mill Ponds on Boone Creek Subdivision (Parcel 7).
Income from the sale of investment properties and cost of investment properties
sold recorded for the three months ended March 31, 1996 is a result of sales at
the Mill Race Creek Subdivision (Parcel 23) and the sale of approximately 5 1/2
acres of Parcel 22.

As of  March  31,  1997,  the  Partnership  owned  twenty-four  parcels of land
consisting of  approximately  3,580  acres  and  one  office  building.  Of the
approximately 3,580 acres  owned,  3,045  acres  are  tillable, leased to local
farmers and generate sufficient  cash  flow  to cover property taxes, insurance
and other miscellaneous expenses.  The  increase in rental income for the three
months ended March 31, 1997, as  compared  to  the three months ended March 31,
1996, is due to an under-accrual  of  rental  income for the three months ended
March 31, 1996.  Land  operating  expenses  to non-affiliates increased for the
three months ended March 31, 1997, as  compared to the three months ended March
31, 1996, due  to  increases  in  repair  and  maintenance on incidental rental
buildings located on the  Partnership's  investment  properties and real estate
taxes.  This increase was partially  offset by decreases in assessment fees and
insurance.

Interest income  increased  for  the  three  months  ended  March  31, 1997, as
compared to the three  months  ended  March  31,  1996,  due to the Partnership
replenishing its working capital reserve from sales and an increase in interest
rates.




                                     -13-



Professional services to Affiliates increased  for the three months ended March
31, 1997, as compared to  the  three  months  ended  March  31, 1996, due to an
increase in legal services related to the increase in sales activity within the
Partnership.  Professional services  to  non-affiliates increased for the three
months ended March 31, 1997, as  compared  to  the three months ended March 31,
1996, due primarily to an  increase  in  outside  legal services related to the
increase in sales activity within the Partnership.

General and  administrative  expenses  to  Affiliates  decreased  for the three
months ended March 31, 1997, as  compared  to  the three months ended March 31,
1996, due primarily to an decrease  in  investor service expenses.  General and
administrative expenses to non-affiliates decreased  for the three months ended
March 31, 1997, as  compared  to  the  three  months  ended March 31, 1996, due
primarily  to  an  decrease  in  the  Illinois  Replacement  Tax  paid  by  the
Partnership in 1997.    This  decrease  was  partially  offset  by increases in
postage and printing expenses.

Marketing expenses to Affiliates increased for the three months ended March 31,
1997, as compared to the three months  ended March 31, 1996, due to an increase
in expenses  relating  to  marketing  and  advertising  the  Partnership's land
investments for sale.  Marketing  expenses  to non-affiliates increased for the
three months ended March 31, 1997, as  compared to the three months ended March
31, 1996, due to an  increase  in  advertising  and travel expenses relating to
marketing the land portfolio to prospective purchasers.




                          PART II - Other Information

Items 1 through 5 are omitted because  of the absence of conditions under which
they are required.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         (27) Financial Data Schedule

     (b) Reports on Form 8-K:

         None















                                     -14-



                                  SIGNATURES



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.



                            INLAND LAND APPRECIATION FUND II, L.P.

                            By:   Inland Real Estate Investment Corporation
                                  General Partner


                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman
                            Date: May 14, 1997


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: May 14, 1997


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: May 14, 1997





















                                     -15-