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, 1996


                                    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 #0-16780


                 Inland Real Estate Growth Fund II, L.P. 
          (Exact name of registrant as specified in its charter)


         Delaware                                     #36-3547165
  (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 REAL ESTATE GROWTH FUND II, L.P.
                          (a limited partnership)

                              Balance Sheets

                 September 30, 1996 and December 31, 1995
                                (unaudited)

                                    Assets
                                    ------
                                                       1996           1995
                                                       ----           ----
Current assets:
  Cash and cash equivalents including amounts
    held by property manager (Note 1)............. $   116,152       106,980 
  Accrued interest receivable.....................         328            41
                                                   ------------  ------------
    Total current assets..........................     116,480       107,021
                                                   ------------  ------------
Investment property (including acquisition fees
    paid to Affiliates of $59,500 at September 30,
    1996 and December 31, 1995 (Notes 1 and 2):
  Land............................................     438,389       438,389
  Building and improvements.......................   1,096,872     1,096,872
                                                   ------------  ------------
                                                     1,535,261     1,535,261
  Less accumulated depreciation...................     274,413       246,990
                                                   ------------  ------------
    Total investment property, net of
      accumulated depreciation....................   1,260,848     1,288,271
                                                   ------------  ------------
Installment contracts receivable (Note 3).........      80,000        80,000
Accrued rents receivable (Notes l and 4)..........      78,234        74,812
Deferred loan costs (net of accumulated
  amortization of $48,188 and $47,018 at
  September 30, 1996 and December 31, 1995,
  respectively) (Note 1)..........................        -            1,170
Deferred leasing fees to Affiliates (net of
  accumulated amortization of $12,661 and $10,662
  at September 30, 1996 and December 31, 1995,
  respectively) (Note 1)..........................      13,325        15,324
                                                   ------------  ------------
Total assets...................................... $ 1,548,887     1,566,598
                                                   ============  ============












                See accompanying notes to financial statements.


                                    -2-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                   September 30, 1996 and December 31, 1995
                                  (unaudited)

                       Liabilities and Partners' Capital
                       ---------------------------------
                                                       1996           1995
                                                       ----           ----
Current liabilities:
  Accounts payable and accrued expenses........... $      -              926
  Mortgage payable................................     916,049       938,503
  Accrued interest payable........................       6,311         7,528
  Due to Affiliates (Note 2)......................         400         2,606
                                                   ------------  ------------
    Total current liabilities.....................     922,760       949,563
                                                   ------------  ------------
Commission payable to Affiliates (Note 2).........     135,000       135,000
                                                   ------------  ------------
    Total liabilities.............................   1,057,760     1,084,563
                                                   ------------  ------------
Deferred gain on sale of investment property
  (Note 3)........................................       9,950         9,950

Partners' capital (Notes 1 and 2):
  General Partner:
    Capital contribution..........................         500           500
    Cumulative net income.........................      14,741        14,480
    Cumulative cash distributions.................      (8,861)       (8,711)
                                                   ------------  ------------
                                                         6,380         6,269
                                                   ------------  ------------
  Limited Partners:
    Units of $1,000. Authorized 25,000 Units,
      4,004.25 Units outstanding September 30,
      1996 and at December 31, 1995 (net of
      offering costs of $462,849, of which
      $59,476 was paid to Affiliates).............   3,541,408     3,541,408
    Cumulative net income.........................   1,459,420     1,433,589
    Cumulative cash distributions.................  (4,526,031)   (4,509,181)
                                                   ------------  ------------
                                                       474,797       465,816
                                                   ------------  ------------
      Total Partners' capital.....................     481,177       472,085
                                                   ------------  ------------
Total liabilities and Partners' capital........... $ 1,548,887     1,566,598
                                                   ============  ============






                See accompanying notes to financial statements.


                                    -3-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                           Statements of Operations

        For the three and nine months ended September 30, 1996 and 1995
                                  (unaudited)


                                        Three months            Nine months
                                           ended                  ended
                                        September 30,          September 30,
                                        -------------          -------------
                                       1996        1995       1996      1995
                                       ----        ----       ----      ----
Income:
  Rental income (Note 4)........... $  51,661     51,661    154,983    154,983
  Interest income..................     3,318      3,016      9,275      8,851
  Other income.....................      -          -          -         2,388
                                    ---------- ---------- ---------- ----------
                                       54,979     54,677    164,258    166,222
                                    ---------- ---------- ---------- ----------
Expenses:
  Professional services to
    Affiliates.....................     1,090      3,201      5,113      9,113
  Professional services to
    non-affiliates.................      -          -        18,600     15,600
  General and administrative
    expenses to Affiliates.........     3,627      3,725     10,492     11,433
  General and administrative
    expenses to non-affiliates.....       429        638      3,437      2,690
  Property operating expenses to
    Affiliates.....................       505        505      1,515      1,515
  Property operating expenses to
    non-affiliates.................      -         1,219       -         1,344
  Mortgage interest................    25,377     22,667     68,417     61,105
  Depreciation.....................     9,141      9,141     27,423     27,422
  Amortization.....................       667      1,673      3,169      5,019
                                    ---------- ---------- ---------- ----------
                                       40,836     42,769    138,166    135,241
                                    ---------- ---------- ---------- ----------
Net income......................... $  14,143     11,908     26,092     30,981
                                    ========== ========== ========== ==========













                See accompanying notes to financial statements.


                                    -4-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                           Statements of Operations
                                  (continued)

        For the three and nine months ended September 30, 1996 and 1995
                                  (unaudited)


                                        Three months          Nine months
                                           ended                ended
                                        September 30,        September 30,
                                        -------------        -------------
                                        1996      1995       1996       1995
                                        ----      ----       ----       ----
Net income allocated to:
  General Partner.................. $     142        119        261        310
  Limited Partners.................    14,001     11,789     25,831     30,671
                                    ---------- ---------- ---------- ----------
    Net income..................... $  14,143     11,908     26,092     30,981
                                    ========== ========== ========== ==========

Net income allocated to the one
  General Partner Unit............. $     142        119        261        310
                                    ========== ========== ========== ==========

Net income per 4,004.25 weighted
  average Limited Partner Units.... $    3.50       2.94       6.45       7.66
                                    ========== ========== ========== ==========

























                See accompanying notes to financial statements.


                                    -5-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

             For the nine months ended September 30, 1996 and 1995
                                  (unaudited)


                                                        1996         1995
                                                        ----         ----
Cash flows from operating activities:
  Net income...................................... $    26,092        30,981
  Adjustments to reconcile net income to net
      cash provided by operating activities:
    Accrued rents receivable......................      (3,422)       (3,422)
    Depreciation..................................      27,423        27,422
    Amortization..................................       3,169         5,019
    Changes in assets and liabilities:
      Accrued interest receivable.................        (287)            5
      Accounts payable and accrued expenses.......        (926)        1,231
      Accrued interest payable....................      (1,217)        1,708
      Due to Affiliates...........................      (2,206)        1,866
                                                   ------------  ------------
Net cash provided by operating activities.........      48,626        64,810
                                                   ------------  ------------
Cash flows from financing activities:
  Principal payments of long-term debt............     (22,454)       (9,301)
  Distributions...................................     (17,000)      (59,929)
                                                   ------------  ------------
Net cash used in financing activities.............     (39,454)      (69,230)
                                                   ------------  ------------
Net increase (decrease) in cash and cash
  equivalents.....................................       9,172        (4,420)
Cash and cash equivalents at beginning of period..     106,980       107,020
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $   116,152      102,600 
                                                   ============  ============


Supplemental disclosure of cash flow information:

  Cash paid for mortgage and other interest....... $    69,452        59,398
                                                   ============  ============












                See accompanying notes to financial statements.


                                    -6-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

                              September 30, 1996
                                  (unaudited)


Readers of this  Quarterly  Report  should  refer  to the Partnership's audited
financial statements for the  fiscal  year  ended  December 31, 1995, which are
included  in  the  Partnership's  1995   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

Inland Real Estate Growth Fund II, L.P. (the "Partnership"), was formed in June
1987, pursuant to  the  Delaware  Revised  Uniform  Limited Partnership Act, to
invest in improved residential,  retail,  industrial and other income producing
properties.  On September 21,  1987,  the  Partnership commenced an Offering of
25,000 Limited  Partnership  Units  (the  "Units")  pursuant  to a Registration
Statement on Form S-11  under  the  Securities  Act  of  1933.  The Partnership
terminated the Offering on September 21, 1989.   A total of 4,038.25 Units were
sold to the public  at  $1,000  per  Unit,  yielding gross offering proceeds of
$4,038,250, not including the General  Partner's  contribution of $500.  All of
the holders of these Units were  admitted  to the Partnership.  As of September
30, 1996, the Partnership has  repurchased  a  total of 34 Units ($33,993) from
various Limited Partners through the Unit Repurchase Program.  At September 30,
1996,  included  in  cash  and   cash  equivalents,  is  approximately  $13,000
restricted for use by the Unit  Repurchase Program.  The Limited Partners share
in their portion of benefits  of  ownership  of the Partnership's real property
investment  according  to  the  number  of  Units  held.    Inland  Real Estate
Investment Corporation is the General Partner.

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.

Deferred loan costs are amortized on a straight-line basis over the life of the
loan.  Deferred leasing fees  are  amortized  on a straight-line basis over the
term of the related lease.

Installment contracts  receivable  origination  fees  received  are deferred as
unearned income and amortized  as  yield  adjustments  on a straight-line basis
over the life of the related installment contracts receivable.






                                    -7-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (unaudited)


The investment properties are carried  at  the  lower  of aggregate cost or net
realizable value.  Periodically,  the  Partnership  will review its real estate
portfolio and if the investment  property  suffers an impairment in value which
is deemed to be other than  temporary, the investment property would be reduced
to the net realizable value of the  property.   As of September 30, 1996, there
have been no such impairments.    The Partnership uses the straight-line method
of  depreciation  with  a  useful  life  of  thirty  years  for  buildings  and
improvements.  Maintenance and  repair  expenses  are  charged to operations as
incurred.  Significant improvements are  capitalized and depreciated over their
estimated useful lives.

Rental income is recognized  on  a  straight-line  basis  over  the term of the
lease.  The excess of rental  income  earned  over  the cash rent due under the
provisions of the lease agreement is recorded as accrued rent receivable.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or less to be cash equivalents.

The carrying amount of cash and  cash equivalents, rents and other receivables,
accounts  payable  and  accrued   expenses   and   accrued  real  estate  taxes
approximates fair  value  because  of  the  relative  short  maturity  of these
instruments.  

The principal balance of the  Partnership's mortgage loan collateralized by the
Scandinavian  Health  Club  property  is  due  October  1996  (Note  5).    The
Partnership believes that it is not practicable to value this debt instrument.

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

Statement of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment of Long-Lived Assets to Be Disposed Of" was issued in March 1995 and
is  effective  for  fiscal  years  beginning  after  December  15,  1995.  This
pronouncement is not  expected  to  have  a  material  effect  on the financial
position or results of operations of 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.  Interim periods are
not necessarily indicative of results to be expected for the year.







                                    -8-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (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 to Affiliates and  general and administrative expenses to
Affiliates, of which $400 and $2,606  remained unpaid at September 30, 1996 and
December 31, 1995, respectively.

In connection with the sales at  Wellington Place, the Partnership has recorded
$135,000 of sales commissions  payable  to  Affiliates  of the General Partner.
Such commissions will  be  deferred  until  the  Limited Partners have received
their Original Capital plus a return as specified in the Partnership Agreement.

An Affiliate of the General Partner  is entitled to receive Property Management
Fees for management and leasing  services.    Management fees of $1,515 for the
nine months ended September 30, 1996  and  1995, have been incurred and paid to
an Affiliate and are included  in the Partnership's property operating expenses
to Affiliates.

(3) Installment Contracts Receivable

During 1991, the Partnership sold all  of the eighteen buildings comprising the
Wellington  Place  apartment  complex  to  unaffiliated  third  parties.    The
Partnership  had  recorded  wrap  around  installment  contracts  receivable of
$3,988,999 as a result of these  sales,  with interest rates ranging from 10.5%
to 10.9% due  over  seven  to  ten  years.    The  gain  of  $616,858 was to be
recognized as cash  was  received  over  the  life  of  the related installment
contracts.

The Partnership  has  received  complete  prepayments  on  all  of the eighteen
installment  contracts  receivable  amounting  to  $3,609,589,  which  included
prepayment penalties of  $10,830,  less  credit  to  the  borrowers for prepaid
interest.   In  conjunction  with  five  of  the  prepayments,  the Partnership
provided a single borrower with five second mortgages, in the amount of $16,000
each, which require interest-only payments at the  rate of 10% per annum with a
final balloon  payment  due  June  30,  1998,  collateralized  by  five  of the
buildings previously sold.








                                    -9-



                    INLAND REAL ESTATE GROWTH FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (unaudited)



(4) Accrued Rents Receivable

The health club lease contains provisions providing for stepped rent increases.
Generally accepted accounting principles require that rental income be recorded
for the period of  occupancy  using  the  effective  monthly rent, which is the
average monthly rent for the entire period  of occupancy during the term of the
lease.  The accompanying financial  statements  include $3,422 in 1995 and 1996
of rental income for the period  of  occupancy for which stepped rent increases
apply and $78,234 and $74,812  in  related  accounts receivable as of September
30, 1996 and December 31, 1995,  respectively.  These amounts will be collected
over the terms of the related leases as scheduled rent payments are made.

(5) Mortgage Payable

The General Partner  obtained  a  six-month  extension  from  the current first
mortgage holder on the mortgage  loan collateralized by the Scandinavian Health
Club property effective May 1, 1996.    The interest rate decreased from 9.625%
to 8.25%.  In addition, the  Partnership is making additional monthly principal
payments of $2,000.



























                                   -10-



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

Liquidity and Capital Resources

On September 21, 1987, the Partnership  commenced an Offering of 25,000 Limited
Partnership Units pursuant to a  Registration  Statement on Form S-11 under the
Securities Act of 1933.  The  Offering  terminated on September 21, 1989 with a
total of 4,038.25 Units being sold  to  the public at $1,000 per Unit resulting
in $4,038,250 in gross offering  proceeds,  of which $3,077,513 was invested in
two properties.  In addition,  proceeds  were  used  to repay advances from the
General Partner, pay offering and  organization costs and make distributions to
the  Limited  Partners.    As  of  September  30,  1996,  the  Partnership  has
repurchased 34 Units ($33,993) from  various  Limited Partners through the Unit
Repurchase Program.

At September  30,  1996,  the  Partnership  had  cash  and  cash equivalents of
$116,152, which includes approximately $13,000 restricted for the repurchase of
Units through the Unit  Repurchase  Program.    The  Partnership intends to use
available cash for working capital requirements and cash distributions.

The Partnership is generating sufficient  cash flow to cover operating expenses
and debt service.  To the  extent  that  these sources are insufficient to meet
the Partnership's needs, the Partnership  may  rely on advances from Affiliates
of the General Partner, other  short-term  financing  or may sell the remaining
property.

The General Partner has agreed  to  make,  if necessary, a Supplemental Capital
Contribution.  The  Supplemental  Capital  Contribution  shall  be in an amount
which will enable the  Partnership  to  pay  a  liquidating distribution to the
Limited Partners equal to their  Adjusted Invested Capital plus a noncompounded
Minimum Return of 2% per annum  on their Invested Capital.  After consideration
of the Supplemental Capital Contribution,  the Partnership believes that it has
sufficient funds to satisfy its obligations.

Results of Operations

As of December 31, 1991, the Partnership had sold all of the eighteen buildings
comprising the Wellington  Place  Apartment  complex.    The remaining property
owned by the  Partnership,  a  health  club,  is  leased  until October 2001 to
Scandinavian Health Spa Inc., a  wholly  owned subsidiary of Bally's Health and
Tennis Corporation on a  "triple-net"  basis,  which  means that in addition to
paying base rent, the tenant is  also responsible for the payment of insurance,
real estate taxes and maintenance.   The General Partner does not anticipate an
early termination of this lease.












                                   -11-



The mortgage  loan  collateralized  by  the  Scandinavian  Health Club property
ballooned in May 1996 and was extended  on a temporary basis.  In the meantime,
the General Partner  has  agreed  to  refinance  the  property with the current
lender for a term of two years.   Payments will be based on an interest rate of
8.25%, adjusted annually, with a ten year amortization period.  The partnership
will pay a two point loan fee.

The General Partner continues to work with the tenant to obtain an extension of
the lease which should enable  the  Partnership to secure longer term financing
or sell the property.

The decrease in professional  services  to  Affiliates  for  the three and nine
months ended September 30, 1996, as compared to the three and nine months ended
September 30, 1995, is  due  to  a  decrease  in accounting fees to Affiliates,
however there was an increase  in  accounting fees to non-affiliates during the
same period.

The decrease in general and administrative expenses to Affiliates for the three
and nine months ended September  30,  1996,  as  compared to the three and nine
months ended September  30,  1995,  is  due  to  decreases  in data processing,
postage and mortgage servicing fees.

The increase in mortgage interest  expense  for the nine months ended September
30, 1996, as compared to the nine months ended September 30, 1995, is due to an
increase in the  adjustable  rate  mortgage  on  the  health club property from
7.375% to 9.625%  in  May  1995.    Beginning  in  May  1996, the interest rate
decreased to 8.25%.


                          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














                                   -12-



                                  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 REAL ESTATE GROWTH FUND II, L.P.

                            By:   Inland Real Estate Investment Corporation
                                  General Partner


                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman
                            Date: November 13, 1996


                                  /S/ PATRICIA A. CHALLENGER
         
                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: November 13, 1996


                                  /S/ KELLY TUCEK
         
                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: November 13, 1996





















                                   -13-