SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                           FORM 10-QSB
                                
           Quarterly Report Under Section 13 or 15(d)
             of The Securities Exchange Act of 1934
                                
           For the Quarter Ended:  September 30, 1997
                                
                Commission file number:  0-17467
                                
                                
            AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)


      State of Minnesota                   41-1603719
(State or other Jurisdiction of         (I.R.S. Employer
Incorporation or Organization)        Identification No.)


  1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
            (Address of Principal Executive Offices)
                                
                          (612) 227-7333
                   (Issuer's telephone number)
                                
                                
                         Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)
                                
Check  whether  the issuer (1) 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
                                
         Transitional Small Business Disclosure Format:
                                
                          Yes           No  [X]
                                
                                
                                
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                                
                              INDEX
                                
                                
                                                     

PART I. Financial Information

 Item 1. Balance Sheet as of September 30, 1997 and December 31, 1996 

          Statements for the Periods ended September 30, 1997 and 1996:

            Income                                     

            Cash Flows                                 

            Changes in Partners' Capital               

         Notes to Financial Statements              

 Item 2. Management's Discussion and Analysis    

PART II. Other Information

 Item 1. Legal Proceedings                          

 Item 2. Changes in Securities                      

 Item 3. Defaults Upon Senior Securities            

 Item 4. Submission of Matters to a Vote of Security  Holders

 Item 5. Other Information                          

 Item 6. Exhibits and Reports on Form 8-K           

<PAGE>
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                          BALANCE SHEET
                                
            SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                
                           (Unaudited)
                                
                             ASSETS

                                                      1997            1996

CURRENT ASSETS:
  Cash and Cash Equivalents                      $ 4,848,130      $ 4,798,584

INVESTMENTS IN REAL ESTATE:
  Land                                             3,469,538        3,469,538
  Buildings and Equipment                          8,026,412        8,026,412
  Accumulated Depreciation                        (2,692,525)      (2,441,191)
                                                  -----------      -----------
                                                   8,803,425        9,054,759
  Real Estate Held for Sale                          261,644          577,072
                                                  -----------      -----------
      Net Investments in Real Estate               9,065,069        9,631,831
                                                  -----------      -----------
            Total  Assets                        $13,913,199      $14,430,415
                                                  ===========      ===========
                                
                                
                    LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.           $    22,827      $    96,543
  Distributions Payable                              305,644          433,349
  Security Deposit                                    49,953           37,307
  Unearned Rent                                       62,787                0
                                                  -----------      -----------
      Total Current Liabilities                      441,211          567,199
                                                  -----------      -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                   (66,692)         (62,780)
  Limited Partners, $1,000 Unit value;
   30,000 Units authorized; 23,389 Units issued;
   22,920 Units outstanding                       13,538,680       13,925,996
                                                  -----------      -----------
      Total Partners' Capital                     13,471,988       13,863,216
                                                  -----------      -----------
        Total Liabilities and Partners' Capital  $13,913,199      $14,430,415
                                                  ===========      ===========




 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                       STATEMENT OF INCOME
                                
               FOR THE PERIODS ENDED SEPTEMBER 30
                                
                           (Unaudited)
                                
                                
                               Three Months Ended       Nine Months Ended
                             9/30/97       9/30/96     9/30/97       9/30/96

INCOME:
 Rent                     $ 335,386      $ 348,769   $   953,877   $ 1,108,861
 Investment Income           64,903         82,269       190,367       245,577
                           ---------      ---------   -----------   -----------
        Total Income        400,289        431,038     1,144,244     1,354,438
                           ---------      ---------   -----------   -----------

EXPENSES:
 Partnership Administration - 
  Affiliates                 65,647         75,136       201,015       221,490
 Partnership Administration 
  and Property Management - 
  Unrelated Parties          19,476         38,160        74,552       139,416
 Depreciation                83,778        103,378       251,533       311,103
                           ---------      ---------   -----------   -----------
        Total Expenses      168,901        216,674       527,100       672,009
                           ---------      ---------   -----------   -----------

OPERATING INCOME            231,388        214,364       617,144       682,429

GAIN ON SALE OF REAL ESTATE       0        347,224             0       425,514
                           ---------      ---------   -----------   -----------

NET INCOME                $ 231,388      $ 561,588   $   617,144   $ 1,107,943
                           =========      =========   ===========   ===========

NET INCOME ALLOCATED:
 General Partners         $   2,314      $   5,615   $     6,172   $    11,079
 Limited Partners           229,074        555,973       610,972     1,096,864
                           ---------      ---------   -----------   -----------
                          $ 231,388      $ 561,588   $   617,144   $ 1,107,943
                           =========      =========   ===========   ===========
NET INCOME PER
 LIMITED PARTNERSHIP UNIT
 (22,920 and 23,107 weighted average
 Units outstanding in 1997 
 and 1996 respectively)   $   10.00      $   24.06   $     26.66   $     47.47
                           =========      =========   ===========   ===========
                                
                                                                
                                
 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>

          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                     STATEMENT OF CASH FLOWS
                                
               FOR THE PERIODS ENDED SEPTEMBER 30
                                
                           (Unaudited)
                                
                                                       1997             1996

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                      $   617,144     $ 1,107,943

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                      251,533         311,103
     Gain on Sale of Real Estate                             0        (425,514)
     Decrease in Receivables                                 0          44,521
     Decrease in Payable to
        AEI Fund Management, Inc.                      (73,716)         (8,281)
     Increase in Security Deposit                       12,646               0
     Increase in Unearned Rent                          62,787          69,111
                                                    -----------     -----------
        Total Adjustments                              253,250          (9,060)
                                                    -----------     -----------
        Net Cash Provided By
        Operating Activities                           870,394       1,098,883
                                                    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from Sale of Real Estate                   315,229       2,097,736
                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                  (127,705)       (282,237)
   Distributions to Partners                        (1,008,372)     (1,421,042)
                                                    -----------     -----------
        Net Cash Used For
        Financing Activities                        (1,136,077)     (1,703,279)
                                                    -----------     -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS               49,546       1,493,340

CASH AND CASH EQUIVALENTS, beginning of period       4,798,584       6,467,946
                                                    -----------     -----------

CASH AND CASH EQUIVALENTS, end of period           $ 4,848,130     $ 7,961,286
                                                    ===========     ===========

                                
                                                                
 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
            STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                
               FOR THE PERIODS ENDED SEPTEMBER 30
                                
                           (Unaudited)



                                                                       Limited
                                                                    Partnership
                               General      Limited                     Units
                               Partners     Partners      Total     Outstanding


BALANCE, December 31, 1995   $ (21,896)  $17,973,501   $17,951,605    23,106.79

  Distributions                (14,210)   (1,406,832)   (1,421,042)

  Net Income                    11,079     1,096,864     1,107,943
                              ---------   -----------   -----------  ----------
BALANCE, September 30, 1996  $ (25,027)  $17,663,533   $17,638,506    23,106.79
                              =========   ===========   ===========  ==========


BALANCE, December 31, 1996   $ (62,780)  $13,925,996   $13,863,216    22,920.29

  Distributions                (10,084)     (998,288)   (1,008,372)

  Net Income                     6,172       610,972       617,144
                              ---------   -----------   -----------  ----------
BALANCE, September 30, 1997  $ (66,692)  $13,538,680   $13,471,988    22,920,29
                              =========   ===========   ===========  ==========




 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                       SEPTEMBER 30, 1997
                                
                           (Unaudited)
                                

(1)  The  condensed  statements included herein have been  prepared
     by  the Partnership, without audit, pursuant to the rules  and
     regulations  of  the Securities and Exchange  Commission,  and
     reflect   all  adjustments  which  are,  in  the  opinion   of
     management,  necessary to a fair statement of the  results  of
     operations for the interim period, on a basis consistent  with
     the  annual audited statements.  The adjustments made to these
     condensed   statements  consist  only  of   normal   recurring
     adjustments.   Certain information, accounting  policies,  and
     footnote    disclosures   normally   included   in   financial
     statements  prepared  in  accordance with  generally  accepted
     accounting principles have been condensed or omitted  pursuant
     to  such  rules  and  regulations,  although  the  Partnership
     believes  that  the  disclosures  are  adequate  to  make  the
     information  presented not misleading.  It is  suggested  that
     these  condensed financial statements be read  in  conjunction
     with  the  financial statements and the summary of significant
     accounting  policies  and  notes  thereto  included   in   the
     Partnership's latest annual report on Form 10-KSB.

(2)  Organization -

     AEI  Real Estate Fund XVII Limited Partnership (Partnership)
     was  formed  to  acquire and lease commercial properties  to
     operating tenants.  The Partnership's operations are managed
     by  AEI  Fund  Management  XVII, Inc.  (AFM),  the  Managing
     General Partner of the Partnership.  Robert P. Johnson,  the
     President  and  sole  shareholder  of  AFM,  serves  as  the
     Individual General Partner of the Partnership.  An affiliate
     of   AFM,   AEI   Fund   Management,  Inc.,   performs   the
     administrative and operating functions for the Partnership.
     
     The   terms   of  the  Partnership  offering  call   for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced  operations  on February  10,  1988  when  minimum
     subscriptions    of   2,000   Limited   Partnership    Units
     ($2,000,000)  were  accepted.   The  Partnership's  offering
     terminated  on  November 1, 1988 when the one-year  offering
     period expired.  The Partnership received subscriptions  for
     23,388.7 Limited Partnership Units ($23,388,700).
     
     Under  the  terms of the Limited Partnership Agreement,  the
     Limited  Partners and General Partners contributed funds  of
     $23,388,700 and $1,000, respectively.  During the  operation
     of the Partnership, any Net Cash Flow, as defined, which the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum.  Distributions to Limited Partners will be  made
     pro rata by Units.
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(2)  Organization - (Continued)

     Any  Net  Proceeds  of Sale, as defined, from  the  sale  or
     financing of the Partnership's properties which the  General
     Partners determine to distribute will, after provisions  for
     debts  and  reserves, be paid in the following  manner:  (i)
     first,  99%  to the Limited Partners and 1% to  the  General
     Partners until the Limited Partners receive an amount  equal
     to:  (a)  their Adjusted Capital Contribution  plus  (b)  an
     amount  equal  to 6% of their Adjusted Capital  Contribution
     per  annum, cumulative but not compounded, to the extent not
     previously distributed from Net Cash Flow; (ii) next, 99% to
     the  Limited  Partners and 1% to the General Partners  until
     the Limited Partners receive an amount equal to 14% of their
     Adjusted Capital Contribution per annum, cumulative but  not
     compounded, to the extent not previously distributed;  (iii)
     next, to the General Partners until cumulative distributions
     to the General Partners under Items (ii) and (iii) equal 15%
     of cumulative distributions to all Partners under Items (ii)
     and (iii).  Any remaining balance will be distributed 85% to
     the  Limited  Partners  and  15% to  the  General  Partners.
     Distributions to the Limited Partners will be made pro  rata
     by Units.
     
     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing   or  other  disposition  of  the  Partnership's
     property,  will  be  allocated first in the  same  ratio  in
     which,  and  to the extent, Net Cash Flow is distributed  to
     the Partners for such year.  Any additional profits will  be
     allocated 90% to the Limited Partners and 10% to the General
     Partners.   In the event no Net Cash Flow is distributed  to
     the  Limited  Partners,  90% of  each  item  of  Partnership
     income,  gain  or credit for each respective year  shall  be
     allocated to the Limited Partners, and 10% of each such item
     shall be allocated to the General Partners.  Net losses from
     operations will be allocated 98% to the Limited Partners and
     2% to the General Partners.
     
     For  tax purposes, profits arising from the sale, financing,
     or  other disposition of the Partnership's property will  be
     allocated  in  accordance with the Partnership Agreement  as
     follows:  (i) first, to those Partners with deficit balances
     in  their capital accounts in an amount equal to the sum  of
     such  deficit  balances; (ii) second,  99%  to  the  Limited
     Partners  and 1% to the General Partners until the aggregate
     balance in the Limited Partners' capital accounts equals the
     sum  of the Limited Partners' Adjusted Capital Contributions
     plus  an  amount  equal  to 14% of  their  Adjusted  Capital
     Contributions  per annum, cumulative but not compounded,  to
     the  extent  not previously allocated; (iii) third,  to  the
     General Partners until cumulative allocations to the General
     Partners equal 15% of cumulative allocations.  Any remaining
     balance  will  be allocated 85% to the Limited Partners  and
     15%  to the General Partners.  Losses will be allocated  98%
     to the Limited Partners and 2% to the General Partners.
     
     The  General Partners are not required to currently  fund  a
     deficit capital balance. Upon liquidation of the Partnership
     or  withdrawal  by  a General Partner, the General  Partners
     will  contribute to the Partnership an amount equal  to  the
     lesser of the deficit balances in their capital accounts  or
     1%  of total Limited Partners' and General Partners' capital
     contributions.
     
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate -

     In  January, 1996, the Cheddar's restaurant in Indianapolis,
     Indiana was destroyed by a fire.  The Partnership reached an
     agreement with the tenant and insurance company which called
     for termination of the Lease, demolition of the building and
     payment to the Partnership of $407,282 for the building  and
     equipment and $49,688 for lost rent.  The property will  not
     be  rebuilt  and the Partnership listed the land  for  sale.
     The  Partnership  recognized  net  disposition  proceeds  of
     $406,892  which resulted in a net gain of $78,290.   At  the
     time  of  disposition,  the  cost  and  related  accumulated
     depreciation  was $512,433 and $183,831, respectively.   The
     Partnership's cost of the land is $261,644.
     
     In  June, 1996, the Partnership entered into an agreement to
     sell the Danny's Family Car Wash in Phoenix, Arizona to  the
     lessee.   On  September 25, 1996, the sale closed  with  the
     Partnership receiving net sale proceeds of $1,690,844  which
     resulted  in a net gain of $347,224.  At the time  of  sale,
     the cost and related accumulated depreciation was $1,688,271
     and $344,651, respectively.
     
     In  July, 1996, the Partnership entered into an agreement to
     sell  the  J.T. McCord's in Mesquite, Texas to an  unrelated
     third   party.   In  September,  1996,  the  Agreement   was
     terminated  by the purchaser.  The property was  listed  for
     sale  or  lease until March, 1997 when it was  re-leased  to
     Texas  Sports  City  Cafe, Ltd. under  a  triple  net  lease
     agreement  with  a  primary term of 12 years  which  may  be
     renewed  for  up to two consecutive five-year periods.   The
     Partnership's share of the annual base rent is  $32,500  for
     the  first lease year and $58,500 for the second lease year,
     with  rent increases in each subsequent lease year of either
     three  percent of the prior year's rent or three percent  of
     gross  receipts  in years two and three and six  percent  of
     gross  receipts  thereafter, to the extent they  exceed  the
     base rent.
     
     The  Partnership  owned  a 65.09% interest  in  the  Sizzler
     restaurant  at the King's Island Theme Park near Cincinnati,
     Ohio.    In  January,  1994,  the  Partnership  closed   the
     restaurant and listed it for sale or lease.  On January  23,
     1997,  the Partnership sold its interest in the property  to
     an  unrelated  third  party.  The Partnership  received  net
     sales proceeds of $315,229, which resulted in a net loss  of
     $503,600,  which was recognized as a real estate  impairment
     in  the  fourth  quarter of 1996.  Prior to  the  sale,  the
     Partnership  was responsible for the real estate  taxes  and
     other costs required to maintain the property.  No rent  was
     received in 1997 or 1996 from the property.  At December 31,
     1996,  the property was classified on the balance  sheet  as
     Real Estate Held for Sale.
     
     During the first nine months of 1997 and the year 1996,  the
     Partnership distributed $139,694 and $3,607,123 of  the  net
     sale  proceeds  to  the Limited and General  Partners  which
     represented  a  return of capital of $6.04 and  $155.66  per
     Limited Partnership Unit, respectively.  In June, 1997,  the
     Managing General Partner filed a proxy statement to  propose
     an Amendment to the Limited Partnership Agreement that would
     allow  the Partnership to reinvest the majority of the sales
     proceeds  in  additional properties.  The  Amendment  passed
     with a majority of Units voting in favor of the Amendment.
     
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     In October, 1997, the Partnership entered into a Development
     Financing  Commitment  under  which  the  Partnership   will
     advance  funds  for  the  construction  of  a  Timber  Lodge
     Steakhouse  restaurant in Rockford, Illinois.  The  purchase
     price  will be approximately $1,620,000.  The property  will
     be  leased  to Timber Lodge Steakhouse, Inc. under  a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments of approximately $174,000.
     
     In  October, 1997, the Partnership entered into an agreement
     to  purchase a 60% interest in a TGI Friday's restaurant  in
     Greensburg, Pennsylvania.  The purchase price for the entire
     property  will  be approximately $1,650,000.   The  property
     will  be  leased to Ohio Valley Bistros, Inc. under a  Lease
     Agreement with a primary term of 15 years and annual  rental
     payments  of  approximately $169,000.  AEI Income  &  Growth
     Fund   XXII  Limited  Partnership,  an  affiliate   of   the
     Partnership, is expected to acquire the remaining interest.
     
(4)  Payable to AEI Fund Management -

     AEI  Fund  Management, Inc. performs the administrative  and
     operating functions for the Partnership.  The payable to AEI
     Fund   Management  represents  the  balance  due  for  those
     services.    This  balance  is  non-interest   bearing   and
     unsecured  and  is  to  be  paid in  the  normal  course  of
     business.

(5)  Security Deposit -

     In  May,  1997, the Partnership received a deposit from  the
     tenant  of  the  Texas  Sport  City  Cafe  as  security  for
     construction  improvements being made by  the  tenant.   The
     funds are invested in a short term money market account  and
     will be returned to the lessee, without interest, within ten
     days  after  written notification of satisfactory completion
     of the work.  In October, 1997, the Partnership returned the
     deposit to the lessee.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

       For the nine months ended September 30, 1997 and 1996, the
Partnership  recognized rental income of $953,877 and $1,108,861,
respectively.   During the same periods, the  Partnership  earned
investment  income  of $190,367 and $245,577,  respectively.   In
1997,  rental income decreased as a result of the property  sales
discussed  below.   The decrease in rental income  was  partially
offset by rent increases on ten properties and rent received from
re-leasing  the  Mesquite property.  In 1997,  investment  income
decreased  mainly  as  a  result  of  a  decrease  in  short-term
investments  in 1997 due to a special distribution  of  net  sale
proceeds to the Partners in November, 1996.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS  (Continued)

      In July, 1996, the Partnership entered into an agreement to
sell  the J.T. McCord's in Mesquite, Texas to an unrelated  third
party.   In September, 1996, the Agreement was terminated by  the
purchaser.   The  property was listed for  sale  or  lease  until
March, 1997 when it was re-leased to Texas Sports City Cafe, Ltd.
under  a  triple net lease agreement with a primary  term  of  12
years  which  may be renewed for up to two consecutive  five-year
periods.   The  Partnership's share of the annual  base  rent  is
$32,500 for the first lease year and $58,500 for the second lease
year, with rent increases in each subsequent lease year of either
three  percent of the prior year's rent or three percent of gross
receipts in years two and three and six percent of gross receipts
thereafter, to the extent they exceed the base rent.

        The  Partnership owned a 65.09% interest in  the  Sizzler
restaurant at the King's Island Theme Park near Cincinnati, Ohio.
In  January,  1994,  the Partnership closed  the  restaurant  and
listed  it  for  sale  or  lease.   On  January  23,  1997,   the
Partnership  sold its interest in the property  to  an  unrelated
third  party.   The  Partnership received net sales  proceeds  of
$315,229,  which  resulted in a net loss of $503,600,  which  was
recognized  as a real estate impairment in the fourth quarter  of
1996.  Prior to the sale, the Partnership was responsible for the
real  estate  taxes  and  other costs required  to  maintain  the
property.   No  rent  was  received in  1997  or  1996  from  the
property.   At December 31, 1996, the property was classified  on
the balance sheet as Real Estate Held for Sale.

        During the nine months ended September 30, 1997 and 1996,
the  Partnership  paid  Partnership  administration  expenses  to
affiliated parties of $201,015 and $221,490, respectively.  These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements  and correspondence to the Limited Partners.  During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $74,552 and $139,416, respectively.  These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct administrative costs, outside audit and  accounting
costs,  taxes, insurance and other property costs.  The  decrease
in  these expenses in 1997, when compared to 1996, is the  result
of  expenses  incurred in 1996 related to the J.T.  McCordOs  and
Sizzler situations discussed above.

        As  of  September 30, 1997, the Partnership's  annualized
cash  distribution rate was 7.5%, based on the  Adjusted  Capital
Contribution.   Distributions of Net Cash  Flow  to  the  General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement.  As a result, 99% of distributions and
income  were allocated to Limited Partners and 1% to the  General
Partners.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   It is expected that increases in sales  volumes  of
the  tenants, due to inflation and real sales growth, will result
in  an  increase  in rental income over the term of  the  leases.
Inflation  also  may  cause  the  Partnership's  real  estate  to
appreciate in value.  However, inflation and changing prices  may
also  have  an  adverse impact on the operating  margins  of  the
properties' tenants which could impair their ability to pay  rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  1997,  the
Partnership's cash balances increased $49,546 as a result of  net
proceeds  received  from the sale of the Sizzler  property  which
were  partially  offset by distributions made in excess  of  cash
generated  from  operating  activities.   Net  cash  provided  by
operating  activities  decreased  from  $1,098,883  in  1996   to
$870,394 in 1997 mainly as the result of a decrease in income  in
1997, when compared to 1996.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS  (Continued)

       For the nine months ended September 30, 1997 and 1996, net
cash   provided   by  investing  activities  was   $315,229   and
$2,097,736,  respectively, which represents cash  generated  from
the disposition of real estate.

         In   January,   1996,   the  Cheddar's   restaurant   in
Indianapolis,  Indiana was destroyed by a fire.  The  Partnership
reached an agreement with the tenant and insurance company  which
called  for termination of the Lease, demolition of the  building
and  payment to the Partnership of $407,282 for the building  and
equipment  and $49,688 for lost rent.  The property will  not  be
rebuilt  and  the  Partnership listed the  land  for  sale.   The
Partnership recognized net disposition proceeds of $406,892 which
resulted  in  a net gain of $78,290.  At the time of disposition,
the  cost  and related accumulated depreciation was $512,433  and
$183,831,  respectively.  The Partnership's cost of the  land  is
$261,644.

        In  June, 1996, the Partnership entered into an agreement
to  sell the Danny's Family Car Wash in Phoenix, Arizona  to  the
lessee.   On  September  25,  1996,  the  sale  closed  with  the
Partnership  receiving  net  sale proceeds  of  $1,690,844  which
resulted  in  a net gain of $347,224.  At the time of  sale,  the
cost  and  related  accumulated depreciation was  $1,688,271  and
$344,651, respectively.

        During  the first nine months of 1997 and the year  1996,
the  Partnership distributed $139,694 and $3,607,123 of  the  net
sale   proceeds  to  the  Limited  and  General  Partners   which
represented a return of capital of $6.04 and $155.66 per  Limited
Partnership  Unit,  respectively.  In June,  1997,  the  Managing
General  Partner filed a proxy statement to propose an  Amendment
to  the  Limited  Partnership  Agreement  that  would  allow  the
Partnership  to  reinvest the majority of the sales  proceeds  in
additional  properties.  The Amendment passed with a majority  of
Units voting in favor of the Amendment.

         In  October,  1997,  the  Partnership  entered  into   a
Development Financing Commitment under which the Partnership will
advance  funds for the construction of a Timber Lodge  Steakhouse
restaurant  in  Rockford, Illinois.  The purchase price  will  be
approximately $1,620,000.  The property will be leased to  Timber
Lodge  Steakhouse, Inc. under a Lease Agreement  with  a  primary
term  of  20  years  and annual rental payments of  approximately
$174,000.

         In  October,  1997,  the  Partnership  entered  into  an
agreement to purchase a 60% interest in a TGI Friday's restaurant
in  Greensburg, Pennsylvania.  The purchase price for the  entire
property will be approximately $1,650,000.  The property will  be
leased to Ohio Valley Bistros, Inc. under a Lease Agreement  with
a  primary  term  of  15  years and  annual  rental  payments  of
approximately  $169,000.  AEI Income & Growth Fund  XXII  Limited
Partnership,  an  affiliate of the Partnership,  is  expected  to
acquire the remaining interest.

       The Partnership's primary use of cash flow is distribution
and  redemption  payments to Partners.  The Partnership  declares
its  regular  quarterly  distributions before  the  end  of  each
quarter and pays the distribution in the first week after the end
of  each quarter.  The Partnership attempts to maintain a  stable
distribution  rate from quarter to quarter.  Redemption  payments
are  paid  to  redeeming Partners in the fourth quarter  of  each
year.   During  1996,  the Partnership distributed  approximately
$354,000  of  net  sale  proceeds  in  addition  to  the  regular
quarterly distributions of net cash flow.  The distributions were
made in equal quarterly installments.  As a result, distributions
are  higher  in 1996, when compared to 1997.  In November,  1996,
the  Partnership distributed net sale proceeds of  $2,828,283  to
the Partners as a special distribution.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS  (Continued)

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be  acquired at a discount.  The Partnership is not obligated  to
purchase  in  any  year  more than 5%  of  the  number  of  Units
outstanding at the beginning of the year.  In no event shall  the
Partnership  be  obligated to purchase  Units  if,  in  the  sole
discretion  of the Managing General Partner, such purchase  would
impair the capital or operation of the Partnership.

        On  October 1, 1997, fifteen Limited Partners redeemed  a
total of 364.4 Partnership Units for $153,502 in accordance  with
the  Partnership Agreement. The Partnership acquired these  Units
using Net Cash Flow from operations.  In prior years, a total  of
thirty  Limited  Partners redeemed 468.5  Partnership  Units  for
$337,842.    The  redemptions  increase  the  remaining   Limited
Partners' ownership interest in the Partnership.

       The continuing rent payments from the properties, together
with  cash generated from the property sales, should be  adequate
to  fund  continuing  distributions and  meet  other  Partnership
obligations on both a short-term and long-term basis.


                   PART II - OTHER INFORMATION
                                
ITEM 1.LEGAL PROCEEDINGS

       There  are no material pending legal proceedings to  which
  the  Partnership  is  a  party or of  which  the  Partnership's
  property is subject.

ITEM 2.CHANGES IN SECURITIES

      None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       In  June, 1997, the Managing General Partner solicited  by
  mail  a  proxy  statement  to propose  two  Amendments  to  the
  Limited   Partnership  Agreement.   In  order  for  a  proposed
  Amendment to be adopted, a majority of the Units must be  voted
  in favor of the Amendment.

        The  first  Amendment  would  allow  the  Partnership  to
  reinvest  the  majority  of  net sale  proceeds  in  additional
  properties.  Of the 22,920 outstanding Units, 12,655 voted  for
  the  Amendment,  2,632 voted against and 632 abstained.   As  a
  result, the Amendment was adopted.

       The  second  Amendment made changes to  the  PartnershipOs
  Unit  repurchase provisions.  Of the 22,920 outstanding  Units,
  13,827  voted  for the Amendment, 1,369 voted against  and  723
  abstained.  As a result, the Amendment was adopted.

ITEM 5.OTHER INFORMATION

      None.

                   PART II - OTHER INFORMATION
                           (Continued)
                                
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

      a. Exhibits -
                            Description

          10.1  Development  Financing  and  Leasing
                Commitment dated October 17, 1997  between
                AEI   Fund  Management,  Inc.  and  Timber
                Lodge  Steakhouse, Inc.  relating  to  the
                sale  and  leaseback  of  a  Timber  Lodge
                Steakhouse  restaurant at 7375 East  State
                Street, Rockford, Illinois.

          10.2  Assignment of Development  Financing
                and  Leasing Commitment dated October  21,
                1997,  between  the  Partnership  and  AEI
                Fund  Management,  Inc.  relating  to  the
                sale  and  leaseback  of  a  Timber  Lodge
                Steakhouse  restaurant at 7375 East  State
                Street, Rockford, Illinois.

          10.3  Sale   and   Leaseback   Financing
                Commitment dated May 13, 1997 between  AEI
                Fund  Management,  Inc.  and  Ohio  Valley
                Bistros,  Inc. relating to  the  sale  and
                leaseback of a TGI Friday's restaurant  at
                #1507,   Rural   Route   #6,   Greensburg,
                Pennsylvania.

          10.4  Assignment  of  Sale  and  Leaseback
                Financing  Commitment  dated  November  7,
                1997  between the Partnership and AEI Fund
                Management, Inc. relating to the sale  and
                leaseback of a TGI Friday's restaurant  at
                #1507,   Rural   Route   #6,   Greensburg,
                Pennsylvania.

          27    Financial Data Schedule  for  period
                ended September 30, 1997.

          b.    Reports filed on Form  8-K  -
                   None.


                           SIGNATURES
                                
     In accordance with the requirements of the Exchange Act, the
Registrant has caused this report to be signed on its  behalf  by
the undersigned, thereunto duly authorized.


Dated:  November 7, 1997      AEI Real Estate Fund XVII
                              Limited Partnership
                              By:  AEI Fund Management XVII, Inc.
                              Its: Managing General Partner



                              By: /s/ Robert P Johnson
                                      Robert P. Johnson
                                      President
                                      (Principal Executive Officer)



                              By: /s/ Mark E Larson
                                      Mark E. Larson
                                      Chief Financial Officer
                                      (Principal Accounting Officer)