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 September 30, 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         60523
        (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

                   September 30, 1997 and December 31, 1996
                                  (unaudited)



                                    Assets
                                    ------

                                                       1997          1996
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $   922,435     3,904,046
  Investments in marketable securities (Note 1)...     757,320     2,232,785
  Accounts and accrued interest receivable........     149,013        28,778
  Other current assets............................       3,765         2,477
                                                   ------------  ------------
Total current assets..............................   1,832,533     6,168,086
                                                   ------------  ------------

Investment properties (including acquisition
  fees paid to Affiliates of $2,004,510 and
  $2,020,973 at September 30, 1997 and December
  31, 1996, respectively) (Notes 1 and 3):
  Land and improvements...........................  41,353,071    40,514,211
  Buildings.......................................      93,082        93,082
                                                   ------------  ------------
                                                    41,446,153    40,607,293
  Less accumulated depreciation...................      14,609        12,282
Total investment properties, net of accumulated    ------------  ------------
  depreciation....................................  41,431,544    40,595,011
                                                   ------------  ------------
Total assets...................................... $43,264,077    46,763,097
                                                   ============  ============


















                See accompanying notes to financial statements.


                                      -2-



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

                                Balance Sheets
                                  (continued)

                   September 30, 1997 and December 31, 1996
                                  (unaudited)



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

                                                       1997          1996
                                                       ----          ----
Current liabilities:
  Accounts payable................................ $    20,775        65,387
  Accrued real estate taxes.......................      75,962       104,059
  Due to Affiliates (Note 2)......................      71,700         4,307
  Unearned income.................................      86,170        70,088
                                                   ------------  ------------
Total current liabilities.........................     254,607       243,841
                                                   ------------  ------------
Partners' capital (Notes 1 and 2):
  General Partner:
   Capital contribution...........................         500           500
   Cumulative net income..........................     448,683       449,394
   Cumulative cash distributions..................     (93,034)      (93,034)
                                                   ------------  ------------
                                                       356,149       356,860
  Limited Partners:                                ------------  ------------
   Units of $1,000. Authorized 60,000 Units,
    50,164.52 and 50,184.52 Units outstanding
    as of September 30, 1997 and December 31,
    1996, respectively (net of offering costs of
    $7,532,439, of which $2,535,445 was paid
    to Affiliates)................................  42,637,010    42,655,371
   Cumulative net income..........................   6,853,064     6,343,988
   Cumulative cash distributions..................  (6,836,753)   (2,836,963)
                                                   ------------  ------------
                                                    42,653,321    46,162,396
                                                   ------------  ------------
Total Partners' capital...........................  43,009,470    46,519,256
                                                   ------------  ------------
Total liabilities and Partners' capital........... $43,264,077    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 and nine months ended September 30, 1997 and 1996
                                  (unaudited)


                                        Three months           Nine months
                                           ended                 ended
                                        September 30,         September 30,
                                        -------------         -------------
                                       1997       1996       1997       1996
Income:                                ----       ----       ----       ----
  Sale of investment properties
    (Notes 1 and 3)................ $ 367,870     39,265  1,414,487  1,291,491
  Rental income (Note 4)...........    90,731     94,183    274,441    267,804
  Interest income..................    25,076     81,671    175,583    236,974
  Other income.....................        20        166         20        166
                                    ---------- ---------- ---------- ----------
                                      483,697    215,285  1,864,531  1,796,435
                                    ---------- ---------- ---------- ----------
Expenses:
  Cost of investment properties
    sold...........................   241,073     29,084    834,974    882,162
  Professional services to
    Affiliates.....................    10,200      6,793     28,794     16,734
  Professional services to
    non-affiliates.................       340        289     52,559     30,657
  General and administrative
    expenses to Affiliates.........     5,120     12,413     21,347     33,268
  General and administrative
    expenses to non-affiliates.....     4,004      3,813     25,093     32,966
  Marketing expenses to Affiliates.    33,147      9,192    100,483     35,569
  Marketing expenses to
    non-affiliates.................    51,970     37,034    104,541     45,621
  Land operating expenses to
    Affiliates.....................    22,778     22,712     68,532     69,092
  Land operating expenses to
    non-affiliates.................    46,501     46,736    117,516    124,601
  Depreciation.....................       776        776      2,327      2,327
                                    ---------- ---------- ---------- ----------
                                      415,909    168,842  1,356,166  1,272,997
                                    ---------- ---------- ---------- ----------
Net income......................... $  67,788     46,443    508,365    523,438
                                    ========== ========== ========== ==========








                See accompanying notes to financial statements.


                                      -4-



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

                           Statements of Operations
                                  (continued)

        For the three and nine months ended September 30, 1997 and 1996
                                  (unaudited)


                                        Three months           Nine months
                                           ended                 ended
                                        September 30,         September 30,
                                        -------------         -------------
                                       1997       1996       1997       1996
Net income (loss) allocated to:        ----       ----       ----       ----
  General Partner.................. $    (590)       362       (711)     1,141
  Limited Partners.................    68,378     46,081    509,076    522,297
                                    ---------- ---------- ---------- ----------
Net income......................... $  67,788     46,443    508,365    523,438 
                                    ========== ========== ========== ==========

Net income (loss) allocated to the
  one General Partner Unit......... $    (590)       362       (711)     1,141
                                    ========== ========== ========== ==========
Net income per weighted average
  Limited Partner Unit (50,164.52
  and 50,184.52 for the three months
  ended September 30, 1997 and 1996,
  respectively, and 50,175.55 and
  50,186.49 for the nine months
  ended September 30, 1997 and 1996,
  respectively).................... $    1.37        .92      10.15      10.41 
                                    ========== ========== ========== ==========





















                 See accompanying notes to financial statements.


                                      -5-



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

                            Statements of Cash Flows

              For the nine months ended September 30, 1997 and 1996
                                   (unaudited)


                                                       1997          1996
Cash flows from operating activities:                  ----          ----
  Net income...................................... $   508,365       523,438
  Adjustments to reconcile net income to net
      cash used in operating activities:
    Depreciation..................................       2,327         2,327
    Gain on sale of investment properties.........    (579,513)     (409,329)
    Changes in assets and liabilities:
      Accounts and accrued interest receivable....    (120,235)     (125,430)
      Other current assets........................      (1,288)       (9,615)
      Accounts payable............................     (44,612)       (7,508)
      Accrued real estate taxes...................     (28,097)      (19,323)
      Due to Affiliates...........................      67,393       (10,765)
      Unearned income.............................      16,082        23,320
                                                   ------------  ------------
Net cash used in operating activities.............    (179,578)      (32,885)
                                                   ------------  ------------
Cash flows from investing activities:
  Additions to investment properties..............  (1,673,834)     (437,030)
  Sale (purchase) of short-term investments, net..   1,475,465    (2,025,000)
  Proceeds from sale of investment properties.....   1,414,487     1,291,491
Net cash provided by (used in) investing           ------------  ------------
  activities......................................   1,216,118    (1,170,539)
                                                   ------------  ------------
Cash flows from financing activities:
  Cash distributions..............................  (4,000,000)         -
  Foreign Partners' withholding...................         210           (55)
  Repurchase of Limited Partnership Units.........     (18,361)       (8,621)
                                                   ------------  ------------
Net cash used in financing activities.............  (4,018,151)       (8,676)
                                                   ------------  ------------
Net decrease in cash and cash equivalents.........  (2,981,611)   (1,212,100)
Cash and cash equivalents at beginning of
  period..........................................   3,904,046     5,097,705
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $   922,435     3,885,605
                                                   ============  ============









                See accompanying notes to financial statements.


                                      -6-



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

                         Notes to Financial Statements

                              September 30, 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 September 30, 1997, the Partnership has
repurchased a total of 311.65 Units  for $306,721 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.






                                      -7-



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

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1997
                                  (unaudited)


Statement of Financial Accounting Standards  No.  121 ("SFAS 121") requires the
Partnership to 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.  As of
September 30, 1997, the Partnership has not recognized any such impairment.

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.









                                      -8-



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

                         Notes to Financial Statements
                                  (continued)

                              September 30, 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 $15,902 and $4,307 was unpaid  as  of September 30, 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 $68,532 and
$69,092 have been incurred for  the  nine  months  ended September 30, 1997 and
1996, respectively, and are included  in land operating expenses to Affiliates,
of which $22,778 was unpaid as of September 30, 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 $100,483 and
$35,569 have been incurred and are included in marketing expenses to Affiliates
for the nine months ended September  30,  1997 and 1996, respectively, of which
$33,020 was unpaid as of September 30, 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  are included in investment properties, all
of which have been paid.

















                                      -9-



<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 September 30, 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       9/30/97     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        353,061         -       2,581,426         -

   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        151,474         -       2,200,672         -

   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      1,993,208      483,567    2,234,598      454,163
                  (10.9057) Var 1997

   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          1,415         -         219,477         -

  10     Will     150.66    08/20/91   1,866,716       89,333    1,956,049            651         -       1,956,700         -

  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            585         -         466,959         -

  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          1,486         -         957,756         -

  15     Kendall  100.364   09/04/91   1,050,000       52,694    1,102,694        102,067      177,298    1,027,463         -
                   (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         80,004         -       1,551,793         -

  17     Kendall    3.462   10/30/91     435,000       22,326      457,326          1,141         -         458,467         -

  18     McHenry  139.1697  11/07/91   1,160,301       58,190    1,218,491        263,709         -       1,482,200         -
                                     ------------ ------------ ------------ -------------- ------------ ------------ ------------
        Subtotal                     $20,641,999    1,214,121   21,856,120      3,005,725    1,128,008   23,733,837      454,163


                                     -10-



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

                                                   Notes to Financial Statements
                                                            (continued)

(3) Investment Properties (continued)
                                                                                                            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        9/30/97    Recognized
------ --------- --------- ---------- ------------ ------------ ------------ ------------- ------------ ------------ ------------
        Subtotal                      $20,641,999    1,214,121   21,856,120     3,005,725    1,128,008   23,733,837     454,163

  19       Kane   436.236   12/13/91    4,362,360      321,250    4,683,610       129,892         -       4,813,502        -

  20       Kane &
         Kendall  400.129   01/31/92    1,692,623      101,318    1,793,941        77,454         -       1,871,395        -

  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        90,526      164,804    4,078,908        -
                  (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     4,301,392    4,355,287    3,429,420     125,350
                  (11.525)  07/16/93
                  (44.070)  Var 1995
                   (8.250)  Var 1996
                   (2.606)  Var 1997

  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         1,388         -         702,704        -

  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        56,661         -       1,327,528        -

  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     7,692,873    7,561,021   41,446,153     579,513
                                      ============ ============ ============ ============= ============ ============ ===========

(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 September 30, 1997, 124 of the 243 single-family lots. Of the 119 remaining single-family lots, 110 are under contract
    for sale with homebuilders.
</TABLE>

                                     -11-



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

                         Notes to Financial Statements
                                  (continued)

                              September 30, 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.........................   1,673,834       888,754
  Sales during period.............................     834,974     1,173,955
                                                   ------------  ------------
  Balance at end of period........................ $41,446,153    40,607,293
                                                   ============  ============

(e) Reconciliation of accumulated depreciation:
                                                       1997          1996
                                                       ----          ----
  Balance at January 1,........................... $    12,282         9,179
  Depreciation expense............................       2,327         3,103
  Sales during period.............................        -             -
                                                   ------------  ------------
  Balance at end of period........................ $    14,609        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 September 30, 1997, the Partnership had farm leases of generally one year
in duration, for approximately  3,045  acres  of  the approximately 3,568 acres
owned.
















                                     -12-



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

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
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
September 30, 1997, the Partnership has had multiple sales transactions through
which it has disposed  of  approximately  912  acres of the approximately 4,480
acres originally owned.   As  of  September  30, 1997, cumulative distributions
have totaled $6,836,753 to  the  Limited  Partners  and  $93,034 to the General
Partner.  Of the $6,836,753 distributed to the Limited Partners, $6,115,753 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
September 30, 1997,  the  Partnership  has  used  $7,692,873 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 September 30, 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.


                                     -13-



At  September  30,  1997,  the  Partnership  had  cash,  cash  equivalents  and
investments in  marketable  securities  of  $1,679,755,  of which approximately
$288,800 is reserved for the  repurchase  of  Units through the Unit Repurchase
Program.  The remaining $1,390,955 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.

On July 7, 1997,  the  Partnership  paid  a  distribution  of $4,000,000 to the
Limited Partners resulting  in  cumulative  distributions  of $6,836,753.  This
distribution was from net sales proceeds  previously held on sales from Parcels
23 and 25.

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, the Olde  Mill  Ponds  on Boone Creek subdivision, has sixty-
five of the total 130 single-family  lots under contract with a homebuilder, of
which twenty-four have already closed  (see  Note  3  of the Notes to Financial
Statements for further discussion of  Parcel  7).   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  124 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  and  nine  months  ended September 30, 1997 is the
result of the sale of twenty-four  lots  in  the Olde Mill Ponds on Boone Creek
subdivision (Parcel 7) and the  sale  of  additional  lots at the Ponds of Mill
Race Creek  subdivision  (Parcel  23).    Income  from  the  sale of investment
properties and cost of investment  properties  sold  recorded for the three and
nine months ended September 30, 1996 is the result of lot sales at the Ponds at
Mill Race Creek subdivision (Parcel  23)  and  the  sale of approximately 5 1/2
acres of Parcel 22.

As of September 30,  1997,  the  Partnership  owned twenty-four parcels of land
consisting of  approximately  3,568  acres  and  one  office  building.  Of the
approximately 3,568 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 nine
months ended September 30, 1997, as compared to the nine months ended September
30, 1996, is due  to  annual  increases  in  lease  amounts from tenants.  Land
operating expenses  to  non-affiliates  decreased  for  the  nine  months ended
September 30, 1997, as compared  to  the  nine months ended September 30, 1996,
due to a decrease in real estate  taxes.  This decrease was partially offset by
an  increase  in  assessment  fees  and  repair  and  maintenance  expenses  on
incidental rental buildings located on the Partnership's investment properties.



                                     -14-



Interest income decreased for  the  three  and  nine months ended September 30,
1997, as compared to the three and nine months ended September 30, 1996, due to
the Partnership distributing net  sales  proceeds  of  $4,000,000 and using its
working capital reserve to  fund  pre-development activity on the Partnership's
investment properties.

Professional services to Affiliates  increased  for  the  three and nine months
ended September 30,  1997,  as  compared  to  the  three  and nine months ended
September 30, 1996, due to an increase in legal and accounting services related
to the  increase  in  sales  activity  within  the  Partnership.   Professional
services to non-affiliates increased  for  the  nine months ended September 30,
1997, as compared to the nine months ended September 30, 1996, due primarily to
an increase in outside legal services.

General and administrative expenses to  Affiliates  decreased for the three and
nine months ended September 30, 1997, as  compared to the three and nine months
ended September 30,  1996,  due  to  decreases  in  postage and data processing
expenses.  General and administrative  expenses to non-affiliates decreased for
the nine months ended September 30, 1997,  as compared to the nine months ended
September 30, 1996, due primarily to a decrease in the Illinois Replacement Tax
paid by the Partnership in  1997.    This  decrease  was partially offset by an
increase in printing expenses.

Marketing expenses to Affiliates increased for  the three and nine months ended
September 30, 1997, as compared  to  the  three and nine months ended September
30, 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 and nine months ended September 30, 1997, as
compared to the three  and  nine  months  ended  September  30, 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








                                     -15-



                                  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: November 12, 1997


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: November 12, 1997


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: November 12, 1997





















                                     -16-