UNITED STATES
               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, 2007

               Commission file number:  000-17467


            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.)


    30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
            (Address of Principal Executive Offices)

                         (651) 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 Exchange Act during the  past
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

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).  Yes       No [X]

Transitional Small Business Disclosure Format:   Yes       No [X]


          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP


                              INDEX




PART I. Financial Information

 Item 1. Statement of Net Assets Available for Liquidation
          As of September 30, 2007 and December 31, 2006

         Statement of Liquidating Activities for the
          Periods ended September 30, 2007 and 2006

         Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

 Item 3. Controls and Procedures

PART II. Other Information

 Item 1. Legal Proceedings

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 Item 3. Defaults Upon Senior Securities

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

 Item 5. Other Information

 Item 6. Exhibits

         Signatures

<PAGE>
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
        STATEMENT OF NET ASSETS AVAILABLE FOR LIQUIDATION
            SEPTEMBER 30, 2007 AND DECEMBER 31, 2006

                           (Unaudited)

                                                    2007           2006

ASSETS:
  Cash and Cash Equivalents                    $   964,630    $ 1,318,743
  Receivables                                            0            636
  Investments in Real Estate                     1,435,000      1,435,000
                                                -----------    -----------
          Total Assets                           2,399,630      2,754,379
                                                -----------    -----------

LIABILITIES:
  Payable to AEI Fund Management, Inc.              11,648         11,390
  Real Estate Taxes Payable                         33,998              0
  Distributions Payable                             43,135        353,241
                                                -----------    -----------
          Total Liabilities                         88,781        364,631
                                                -----------    -----------
NET ASSETS (PARTNERS' CAPITAL) IN LIQUIDATION,
 including 19,557 Limited Partnership
 Units outstanding                             $ 2,310,849    $ 2,389,748
                                                ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>

          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
               STATEMENT OF LIQUIDATING ACTIVITIES
               FOR THE PERIODS ENDED SEPTEMBER 30
                           (Unaudited)

                                 Three Months Ended       Nine Months Ended
                                 9/30/07      9/30/06    9/30/07      9/30/06
SOURCES OF ADDITIONAL CASH:
  Rent                        $   32,436  $   51,448  $  105,990  $  146,295
  Real Estate Tax Reimbursements  25,499           0      33,998           0
  Interest Income                 11,668      12,212      35,775      34,330
                               ----------  ----------  ----------  ----------
    Total Sources of
     Additional Cash              69,603      63,660     175,763     180,625
                               ----------  ----------  ----------  ----------
USES OF ADDITIONAL CASH:
  Partnership Administration -
   Affiliates                     19,100      21,256      67,219      68,785
  Partnership Administration and
   Property Management  -
   Unrelated Parties               6,901       4,043      20,485      15,847
   Expenses Related to Sale
    of Real Estate                     0           0           0      68,748
  Distributions to Partners       43,711      45,644     442,172   1,670,558
                               ----------  ----------  ----------  ----------
   Total Uses of Additional Cash  69,712      70,943     529,876   1,823,938
                               ----------  ----------  ----------  ----------
DECREASE IN NET
  ASSETS IN LIQUIDATION
  BEFORE  ADJUSTMENTS               (109)     (7,283)   (354,113) (1,643,313)
                               ----------  ----------  ----------  ----------
ADJUSTMENTS OF ESTIMATED VALUES:
  Increase (Decrease) in Net Realizable values of:
   Receivable                          0           0        (636)          0
   Real Estate                         0      (8,500)          0    (144,500)
   Payable to
    AEI Fund Management, Inc.     (2,032)     (1,250)       (258)     68,708
   Real Estate Taxes Payable     (25,499)          0     (33,998)          0
   Distributions Payable             576      (8,105)    310,106   1,525,520
   Unearned Rent                       0           0           0      (4,689)
                               ----------  ----------  ----------  ----------
      Total Adjustment of
       Estimated Values          (26,955)    (17,855)    275,214   1,445,039
                               ----------  ----------  ----------  ----------
DECREASE IN NET ASSETS
    IN  LIQUIDATION              (27,064)    (25,138)    (78,899)   (198,274)

BEGINNING NET ASSETS
   IN LIQUIDATION              2,337,913   3,001,079   2,389,748   3,174,215
                               ----------  ----------  ----------  ----------
ENDING NET ASSETS
    IN  LIQUIDATION           $2,310,849  $2,975,941  $2,310,849  $2,975,941
                               ==========  ==========  ==========  ==========

 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, 2007

                           (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.  Robert P. Johnson, the President and  sole
     director  of AFM, serves as the Individual General  Partner.
     AFM  is a wholly owned subsidiary of AEI Capital Corporation
     of  which Mr. Johnson is the majority shareholder.  AEI Fund
     Management,  Inc. (AEI), an affiliate of AFM,  performs  the
     administrative and operating functions for the Partnership.

     The   terms  of  the  Partnership  offering  called  for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced  operations  on February  10,  l988  when  minimum
     subscriptions    of   2,000   Limited   Partnership    Units
     ($2,000,000)  were  accepted.  The  offering  terminated  on
     November  1, 1988 when the one-year offering period expired.
     The  Partnership received subscriptions for 23,388.7 Limited
     Partnership   Units.   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 operations, 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 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  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 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 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 contribution.


          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(2)  Organization - (Continued)

     In September 2007, the Managing General Partner solicited by
     mail  a  proxy statement seeking the consent of the  Limited
     Partners,  as  required by Section 6.1  of  the  Partnership
     Agreement,  to  initiate the final disposition,  liquidation
     and  distribution of all of the Partnership's properties and
     assets  within  the  next year.  On October  16,  2007,  the
     proposal  was  approved with a majority of  Units  voted  in
     favor  of  the proposal.  As a result, the Managing  General
     Partner  will  proceed with the planned liquidation  of  the
     Partnership.    If  the  Partnership  sells  its   remaining
     property in 2007, the Partnership anticipates liquidation to
     occur by December 31, 2007.

     Financial Statement Presentation

       Because   liquidation  was  anticipated,  the  Partnership
       changed its basis of accounting after September 30,  2005,
       from  the  going  concern basis to the liquidation  basis.
       Effective  October 1, 2005, the Partnership  measures  its
       assets and liabilities at the amounts of cash expected  in
       liquidation  and  reports changes in estimates  when  they
       are   known.    The   accounts  of  the  Partnership   are
       maintained  on  the accrual basis of accounting  for  both
       federal   income  tax  purposes  and  financial  reporting
       purposes.

(3)  Investments in Real Estate -

     Effective  with  the  decision to  liquidate,  the  carrying
     amounts  of assets and liabilities were adjusted from  their
     historical bases to the amounts of cash expected from  their
     realization  and settlement.  Because of the expected  short
     liquidation period, the effects of discounting would not  be
     significant  and have been ignored.  At December  31,  2005,
     the  estimated real estate values were based upon comparable
     sales  of  similar properties and a tenant  purchase  option
     contained  in a lease.  The adjustment increased Investments
     in   Real  Estate  by  $677,365.   During  2006,  additional
     adjustments  were made to the estimated real  estate  values
     that  decreased Investments in Real Estate  by  a  total  of
     $463,500.  At September 30, 2007 and December 31, 2006,  the
     estimated  real  estate  values were based  upon  comparable
     sales  of  similar  properties.   It is at least  reasonably
     possible  that  the amounts expected to be realized  in  the
     liquidation process will change in the near term.

(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.

          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(5)  Real Estate Taxes Payable -

     The  tenant  of  the  Timber  Lodge  restaurants  is  making
     additional monthly payments to fund a real estate tax escrow
     account.   The Partnership will hold these funds  until  the
     real estate taxes are due and then pay them directly to  the
     taxing  authorities.  The payable represents the balance  of
     the  tenant's  real estate tax payments that have  not  been
     paid to the taxing authorities.

(6)  Discontinued Operations -

     In  July  2003,  the  tenant of the Razzoo's  restaurant  in
     Austin,   Texas  notified  the  Partnership  that   it   was
     experiencing financial difficulty stemming from  lower  than
     expected  sales and that it might not be able to pay  future
     rents.   In  November 2004, the Partnership and  the  tenant
     entered into an agreement to amend the Lease to provide  the
     tenant  with options to purchase the property and  terminate
     the Lease.  Under the purchase option, which expired October
     31,  2006,  the  tenant could have elected to  purchase  the
     Partnership's interest in the property for $442,000.   Under
     the  termination option, the tenant could elect to terminate
     the Lease by providing no less than six months prior written
     notice  and paying a termination payment equal to one year's
     rent.  As part of this agreement, the Partnership received a
     personal  guarantee  from the majority  shareholder  of  the
     tenant for payment of the rent through October 31, 2006.  In
     addition,   the  Partnership  was  reimbursed  for   certain
     expenses  it incurred related to legal action it pursued  in
     connection with this situation.  The tenant continued to pay
     rent and complied with its Lease obligations.

     On  April  30,  2006,  the tenant exercised  its  option  to
     terminate the Lease effective October 31, 2006.  The  tenant
     paid  the  Partnership the required payment  of  $56,263  on
     October  31,  2006,  and  the  Lease  was  terminated.   The
     Partnership  actively  marketed the property  for  sale  and
     listed it with a real estate broker in the Austin area.   At
     March  31,  2006,  based  on the Lease  termination  and  an
     analysis  of  market conditions in the area, the Partnership
     recognized  a $136,000 adjustment to decrease the  estimated
     net realizable value of the property to $306,000.

     In September 2006, the Partnership entered into an agreement
     to sell the Razzoo's restaurant to an unrelated third party.
     Based  on  this  agreement,  the Partnership  recognized  an
     additional  $8,500 adjustment to decrease the estimated  net
     realizable value of the property.  On November 21, 2006, the
     sale closed with the Partnership receiving net sale proceeds
     of  $297,816.   At  the  time of  sale,  the  estimated  net
     realizable value was $297,500.

          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(6)  Discontinued Operations - (Continued)

     On  June 26, 2006, Timber Lodge Steakhouse, Inc. (TLS),  the
     tenant of the Timber Lodge restaurants filed for Chapter  11
     bankruptcy reorganization.  In September 2006, TLS submitted
     a written proposal requesting rent concessions.  In February
     2007,  the  Partnership and other owners of  the  properties
     signed Lease amendments to reduce the annual rent by 15% for
     the  Rochester property and 10% for the St. Cloud  property.
     As  a result of these amendments, TLS submitted a request to
     the  bankruptcy court to assume the Leases.  The request was
     approved  by the court.  As of the date of this report,  TLS
     has  paid  all  rent due under the Leases  as  amended.   At
     December  31,  2006, based on the Lease  amendments  and  an
     analysis  of  market conditions in the area, the Partnership
     recognized  a $319,000 adjustment to decrease the  estimated
     net realizable value of the properties.

     During  the  first  nine  months  of  2007  and  2006,   the
     Partnership  distributed $36,061 and  $55,885  of  net  sale
     proceeds   to  the  Limited  and  General  Partners,   which
     represented  a  return of capital of  $1.83  and  $2.83  per
     Limited Partnership Unit, respectively.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        The Management's Discussion and Analysis contains various
"forward  looking  statements"  within  the  meaning  of  federal
securities  laws  which  represent management's  expectations  or
beliefs  concerning future events, including statements regarding
anticipated  application of cash, expected  returns  from  rental
income,  growth  in  revenue, the sufficiency  of  cash  to  meet
operating  expenses, rates of distribution,  and  other  matters.
These,   and  other  forward  looking  statements  made  by   the
Partnership,  must be evaluated in the context  of  a  number  of
factors that may affect the Partnership's financial condition and
results of operations, including the following:

    Market  and  economic conditions which affect the  value
    of  the  properties the Partnership owns and  the  cash
    from rental income such properties generate;

    the  federal  income tax consequences of rental  income,
    deductions,  gain  on  sales and other  items  and  the
    effects of these consequences for the Partners;

    resolution  by  the  General Partners  of  conflicts  with
    which they may be confronted;

    the effect of tenant defaults; and

    the  condition of the industries in which the  tenants  of
    properties owned by the Partnership operate.


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

The Application of Critical Accounting Policies

        The preparation of the Partnership's financial statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses  to  the  Partnership as opposed  to  other  funds  they
manage.

        Through  September  30, 2005, the  Partnership  purchased
properties and recorded them in the financial statements  at  the
lower  of  cost  or estimated realizable value.  The  Partnership
initially  recorded the properties at cost (including capitalized
acquisition   expenses).   The  Partnership   was   required   to
periodically  evaluate  the  carrying  value  of  properties   to
determine   whether   their  realizable  value   declined.    For
properties  the  Partnership would hold and  operate,  management
determined   whether  impairment  occurred   by   comparing   the
property's  probability-weighted cash flows to its  then  current
carrying   value.   For  properties  held  for  sale,  management
determined   whether  impairment  occurred   by   comparing   the
property's  estimated fair value less cost to sell  to  its  then
current  carrying value.  If the carrying value was greater  than
the  realizable value, an impairment loss was recorded to  reduce
the  carrying value of the property to its realizable  value.   A
change  in these assumptions or analysis may have caused material
changes in the carrying value of the properties.

       Effective  October  1, 2005, the Partnership  adopted  the
liquidation  basis  of  accounting because the  General  Partners
anticipated the liquidation of the Partnership during 2006.   The
General Partners now anticipate liquidation to occur during 2007.
In  accordance  with the liquidation basis of accounting,  assets
are  recorded at their estimated net realizable value (the amount
of  cash expected to be received) and liabilities are recorded at
the  amount  estimated to be paid to creditors and Partners.   At
September  30, 2007, the estimated real estate values were  based
upon  comparable  sales of similar properties.   Any  changes  in
these estimates could cause material changes in the net assets in
liquidation.

        AEI  Fund Management, Inc. allocates expenses to each  of
the  funds  they manage primarily on the basis of the  number  of
hours  devoted  by their employees to each fund's affairs.   They
also  allocate  expenses at the end of each month  that  are  not
directly related to a fund's operations based upon the number  of
investors  in the fund and the fund's capitalization relative  to
other  funds  they  manage.   The  Partnership  reimburses  these
expenses  subject  to  detailed  limitations  contained  in   the
Partnership Agreement.

         Management   of  the  Partnership  has   discussed   the
development  and selection of the above accounting estimates  and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.

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

Results of Operations

        For  the  nine months ended September 30, 2007 and  2006,
while in the liquidation phase, the Partnership recognized rental
income  of $105,990 and $141,606, respectively.  During the  same
periods,  the Partnership recognized interest income  of  $35,775
and $34,330, respectively.   In 2007, rental income decreased  as
a result of a property sale.

        The  tenant  of  the Timber Lodge restaurants  is  making
additional  monthly  payments to fund a real  estate  tax  escrow
account.   For  the  nine months ended September  30,  2007,  the
Partnership  received payments of $33,998.  The Partnership  will
hold these funds until the real estate taxes are due and then pay
them  directly  to the taxing authorities.  The real  estate  tax
payable  represents the balance of the tenant's real  estate  tax
payments that have not been paid to the taxing authorities.

        For  the  nine months ended September 30, 2007 and  2006,
while   in   the  liquidation  phase,  the  Partnership  incurred
Partnership  administration expenses from affiliated  parties  of
$67,477 and $68,825, 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  $21,121   and
$15,847,  respectively.  These expenses represent direct payments
to third parties for legal and filing fees, direct administrative
costs,  outside audit costs, taxes, insurance and other  property
costs.

       At September 30, 2007 and 2006, the Partnership recognized
adjustments  of  estimated  value  of  $275,214  and  $1,445,039,
respectively,  resulting from adopting the liquidation  basis  of
accounting  and recording its assets at estimated net  realizable
value and liabilities at the amount estimated to be paid.

       On June 26, 2006, Timber Lodge Steakhouse, Inc. (TLS), the
tenant  of  the  Timber Lodge restaurants filed  for  Chapter  11
bankruptcy  reorganization.  In September 2006, TLS  submitted  a
written proposal requesting rent concessions.  In February  2007,
the  Partnership and other owners of the properties signed  Lease
amendments  to  reduce the annual rent by 15% for  the  Rochester
property  and  10% for the St. Cloud property.  As  a  result  of
these amendments, TLS submitted a request to the bankruptcy court
to assume the Leases.  The request was approved by the court.  As
of  the date of this report, TLS has paid all rent due under  the
Leases  as  amended.  At December 31, 2006, based  on  the  Lease
amendments and an analysis of market conditions in the area,  the
Partnership  recognized  a $319,000 adjustment  to  decrease  the
estimated net realizable value of the properties.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   Inflation also may cause the  real  estate  to
appreciate in value.  However, inflation and changing prices  may
have   an  adverse  impact  on  the  operating  margins  of   the
properties' tenants, which could impair their ability to pay rent
and   subsequently  reduce  the  Net  Cash  Flow  available   for
distributions.

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

Liquidity and Capital Resources

        In September 2007, the Managing General Partner solicited
by  mail  a  proxy statement seeking the consent of  the  Limited
Partners,   as  required  by  Section  6.1  of  the   Partnership
Agreement,  to  initiate the final disposition,  liquidation  and
distribution  of all of the Partnership's properties  and  assets
within  the  next  year.  On October 16, 2007, the  proposal  was
approved with a majority of Units voted in favor of the proposal.
As  a result, the Managing General Partner will proceed with  the
planned liquidation of the Partnership.  If the Partnership sells
its  remaining  property  in  2007, the  Partnership  anticipates
liquidation to occur by December 31, 2007.

        During the nine months ended September 30, 2007, while in
the   liquidation  phase,  the  Partnership's   Net   Assets   in
Liquidation  decreased $78,899 as a result of distributions  paid
to  the  Partners  in  excess of cash  generated  from  operating
activities.   During  the nine months ended September  30,  2006,
while  in the liquidation phase, the Partnership's Net Assets  in
Liquidation decreased $198,274 mainly as a result of  a  decrease
in  the  estimated  net realizable value of Investments  in  Real
Estate.

        In  July  2003, the tenant of the Razzoo's restaurant  in
Austin,  Texas notified the Partnership that it was  experiencing
financial difficulty stemming from lower than expected sales  and
that it might not be able to pay future rents.  In November 2004,
the Partnership and the tenant entered into an agreement to amend
the  Lease  to  provide the tenant with options to  purchase  the
property  and  terminate the Lease.  Under the  purchase  option,
which expired October 31, 2006, the tenant could have elected  to
purchase the Partnership's interest in the property for $442,000.
Under the termination option, the tenant could elect to terminate
the  Lease  by  providing no less than six months  prior  written
notice and paying a termination payment equal to one year's rent.
As  part  of this agreement, the Partnership received a  personal
guarantee from the majority shareholder of the tenant for payment
of   the  rent  through  October  31,  2006.   In  addition,  the
Partnership  was  reimbursed  for certain  expenses  it  incurred
related  to  legal  action  it pursued in  connection  with  this
situation.   The tenant continued to pay rent and  complied  with
its Lease obligations.

        On  April  30, 2006, the tenant exercised its  option  to
terminate the Lease effective October 31, 2006.  The tenant  paid
the  Partnership the required payment of $56,263 on  October  31,
2006,  and  the  Lease was terminated.  The Partnership  actively
marketed  the property for sale and listed it with a real  estate
broker in the Austin area.  At March 31, 2006, based on the Lease
termination and an analysis of market conditions in the area, the
Partnership  recognized  a $136,000 adjustment  to  decrease  the
estimated net realizable value of the property to $306,000.

        In  September  2006,  the  Partnership  entered  into  an
agreement  to sell the Razzoo's restaurant to an unrelated  third
party.   Based  on this agreement, the Partnership recognized  an
additional  $8,500  adjustment  to  decrease  the  estimated  net
realizable value of the property.  On November 21, 2006, the sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$297,816.   At  the  time of sale, the estimated  net  realizable
value was $297,500.

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

       The Partnership's primary use of cash flow is distribution
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.

       For the nine months ended September 30, 2007 and 2006, the
Partnership  declared  distributions of  $132,066  and  $145,038,
respectively.   The  Limited Partners received  distributions  of
$122,106   and   $135,564  and  the  General  Partners   received
distributions of $9,960 and $9,474 for the periods, respectively.
During  the  first nine months of 2007 and 2006, the  Partnership
distributed  $36,061  and $55,885 of net  sale  proceeds  to  the
Limited  and  General  Partners, which represented  a  return  of
capital  of  $1.83  and  $2.83  per  Limited  Partnership   Unit,
respectively.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations.

ITEM 3. CONTROLS AND PROCEDURES.

       (a) Evaluation of disclosure controls and procedures

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the  Managing  General Partner of the Partnership  evaluated  the
effectiveness  of  the  design and operation  of  its  disclosure
controls  and procedures (as defined in Rule 13a-14(c) under  the
Exchange  Act).   Based upon that evaluation, the  President  and
Chief Financial Officer of the Managing General Partner concluded
that,  as  of  the end of the period covered by this report,  the
disclosure  controls  and  procedures  of  the  Partnership  were
effective  in ensuring that information required to be  disclosed
by  us in the reports we file or submit under the Exchange Act is
recorded,  processed, summarized and reported,  within  the  time
periods  specified in applicable rules and forms  and  that  such
information   is  accumulated  and  communicated  to  management,
including  the  President  and Chief  Financial  Officer  of  the
Managing  General  Partner,  in  a  manner  that  allows   timely
decisions regarding required disclosure.

       (b)  Changes in internal controls

         There   were   no  significant  changes  made   in   the
Partnership's  internal controls during the  most  recent  period
covered  by  this  report that have materially affected,  or  are
reasonably   likely  to  materially  affect,  the   Partnership's
internal control over financial reporting.


                   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.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
  PROCEEDS

        (a)  During  the  period  covered  by  this  report,  the
Partnership  did  not  sell any equity securities  that  are  not
registered under the Securities Act of 1933.

       (b) Not applicable.

        (c) Pursuant to Section 7.7 of the Partnership Agreement,
as  amended, each Limited Partner has the right to present  Units
to  the  Partnership  for purchase by submitting  notice  to  the
Managing  General Partner.  The purchase price of  the  Units  is
equal to 90% of the net asset value of the Units as determined by
the Managing General Partner in accordance with the provisions of
the Partnership Agreement.  Units tendered to the Partnership are
redeemed  at  the purchase price established for the  quarter  in
which the Partnership received a notice at least 60 days prior to
the  repurchase  dates of January 1st, April 1st,  July  1st  and
October   1st   subject  to  the  following   limitations.    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.   During  the period covered  by  this  report,  the
Partnership did not purchase any Units.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

        In September 2007, the Managing General Partner solicited
by  mail  a  proxy statement seeking the consent of  the  Limited
Partners,   as  required  by  Section  6.1  of  the   Partnership
Agreement,  to  initiate the final disposition,  liquidation  and
distribution  of all of the Partnership's properties  and  assets
within  the next year.  In order for the proposal to be approved,
a  majority  of the Voting Units must be voted in  favor  of  the
proposal.

        On  October  16,  2007, the votes were counted.   Of  the
19,557  Voting  Units, 11,953 voted for the  proposal,  83  voted
against  and  59  abstained.   As  a  result,  the  proposal  was
approved.

ITEM 5.OTHER INFORMATION

      None.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS

    31.1  Certification  of Chief Executive  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2  Certification  of Chief Financial  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    32    Certification  of  Chief Executive  Officer  and  Chief
    Financial Officer of General Partner pursuant to Section  906
    of the Sarbanes-Oxley Act of 2002.



                           SIGNATURES

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


Dated:  November 9, 2007      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/ Patrick W Keene
                                      Patrick W. Keene
                                      Chief Financial Officer
                                      (Principal Accounting Officer)