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:  March 31, 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 March 31, 1997 and December 31, 1996    

         Statements for the Periods ended March 31, 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
                                
              MARCH 31, 1997 AND DECEMBER 31, 1996
                                
                           (Unaudited)
                                
                             ASSETS

                                                    1997            1996

CURRENT ASSETS:
  Cash and Cash Equivalents                    $ 4,880,840      $ 4,798,584
  Receivables                                          357                0
                                                -----------      -----------
      Total Current Assets                       4,881,197        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                      (2,524,969)      (2,441,191)
                                                -----------      -----------
                                                 8,970,981        9,054,759
  Real Estate Held for Sale                        261,644          577,072
                                                -----------      -----------
      Net Investments in Real Estate             9,232,625        9,631,831
                                                -----------      -----------
            Total Assets                       $14,113,822      $14,430,415
                                                ===========      ===========
                                
                                
                       LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.         $    30,338      $    96,543
  Distributions Payable                            307,810          433,349
  Security Deposit                                       0           37,307
  Unearned Rent                                     53,345                0
                                                -----------      -----------
      Total Current Liabilities                    391,493          567,199
                                                -----------      -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                 (64,188)         (62,780)
  Limited Partners, $1,000 Unit value;
   30,000 Units authorized; 23,389 Units issued;
   22,920 Units outstanding                     13,786,517       13,925,996
                                                -----------      -----------
     Total Partners' Capital                    13,722,329       13,863,216
                                                -----------      -----------
       Total Liabilities and Partners' Capital $14,113,822      $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 MARCH 31
                                
                           (Unaudited)
                                

                                                     1997          1996

INCOME:
   Rent                                         $   308,113     $   406,903
   Investment Income                                 60,772          81,093
                                                 -----------     -----------
        Total Income                                368,885         487,996
                                                 -----------     -----------

EXPENSES:
   Partnership Administration - Affiliates           58,861          86,395
   Partnership Administration and Property
      Management - Unrelated Parties                 27,325          36,052
   Depreciation                                      83,977         104,346
                                                 -----------     -----------
        Total Expenses                              170,163         226,793
                                                 -----------     -----------

OPERATING INCOME                                    198,722         261,203

GAIN ON DISPOSITION OF REAL ESTATE                        0          78,290
                                                 -----------     -----------

NET INCOME                                      $   198,722     $   339,493
                                                 ===========     ===========

NET INCOME ALLOCATED:
   General Partners                             $     1,988     $     3,395
   Limited Partners                                 196,734         336,098
                                                 -----------     -----------
                                                $   198,722     $   339,493
                                                 ===========     ===========

NET INCOME PER LIMITED PARTNERSHIP UNIT
 (22,920 and 23,107 weighted average Units
  outstanding in 1997 and 1996)                 $      8.58     $     14.55
                                                 ===========     ===========


 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 MARCH 31
                                
                           (Unaudited)
                                
                                
                                                         1997         1996

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net   Income                                      $   198,723   $   339,493

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                         83,976       104,346
     Gain on Disposition of Real Estate                        0       (78,290)
     (Increase) Decrease in Receivables                     (357)        7,197
     Decrease in Payable to
       AEI Fund Management, Inc.                         (66,205)      (22,829)
     Decrease in Security Deposit                        (37,307)            0
     Increase in Unearned Rent                            53,345         5,244
                                                      -----------   -----------
        Total Adjustments                                 33,452        15,668
                                                      -----------   -----------
        Net Cash Provided By
        Operating Activities                             232,175       355,161
                                                      -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from Disposition of Real Estate             315,229       406,892
                                                      -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                    (125,539)     (282,432)
   Distributions to Partners                            (339,609)     (473,680)
                                                      -----------   -----------
        Net Cash Used For
        Financing Activities                            (465,148)     (756,112)
                                                      -----------   -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                 82,256         5,941

CASH AND CASH EQUIVALENTS,
   beginning of period                                 4,798,584     6,467,946
                                                      -----------   -----------
CASH AND CASH EQUIVALENTS,
   end of period                                     $ 4,880,840   $ 6,473,887
                                                      ===========   ===========



 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 MARCH 31
                                
                           (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                 (4,737)     (468,943)    (473,680)

  Net Income                     3,395       336,098      339,493
                             ----------   -----------  -----------  -----------
BALANCE, March 31, 1996     $  (23,238)  $17,840,656  $17,817,418    23,106.79
                             ==========   ===========  ===========  ===========


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

  Distributions                 (3,396)     (336,213)    (339,609)

  Net Income                     1,988       196,734      198,722
                             ----------   -----------  -----------  -----------
BALANCE, March 31, 1997     $  (64,188)  $13,786,517  $13,722,329    22,920.29
                             ==========   ===========  ===========  ===========



 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                         MARCH 31, 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.
     
     During the first three months of 1997 and the year 1996, the
     Partnership distributed $56,910 and $3,607,123  of  the  net
     sale  proceeds  to  the Limited and General  Partners  which
     represented  a  return of capital of $2.46 and  $155.66  per
     Limited   Partnership  Unit,  respectively.   The   Managing
     General  Partner  is  in the process of  preparing  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.
     
     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.
     
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(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.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

        For  the three months ended March 31, 1997 and 1996,  the
Partnership  recognized rental income of $308,113  and  $406,903,
respectively.   During the same periods, the  Partnership  earned
investment income of $60,772 and $81,093, 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 nine properties.  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.

      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.


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

       During the three months ended March 31, 1997 and 1996, the
Partnership   paid   Partnership   administration   expenses   to
affiliated  parties of $58,861 and $86,395, 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  $27,325 and $36,052, 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.  McCord's  and
Sizzler situations discussed above.

        As  of March 31, 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  three  months  ended  March  31,  1997,  the
Partnership's cash balances increased $82,256 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 $355,161 in 1996 to  $232,174
in  1997  mainly as the result of a decrease in income  in  1997,
when compared to 1996.

        For  the three months ended March 31, 1997 and 1996,  net
cash  provided by investing activities was $315,229 and $406,892,
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.


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

        During the first three months of 1997 and the year  1996,
the  Partnership distributed $56,910 and $3,607,123  of  the  net
sale   proceeds  to  the  Limited  and  General  Partners   which
represented a return of capital of $2.46 and $155.66 per  Limited
Partnership Unit, respectively.  The Managing General Partner  is
in  the  process  of preparing 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 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.

        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.

        During  1996, seven Limited Partners redeemed a total  of
186.5  Partnership  Units for $109,813  in  accordance  with  the
Partnership Agreement. The Partnership acquired these Units using
Net Cash Flow from operations.  In prior years, a total of twenty-
three  Limited  Partners  redeemed  282  Partnership  Units   for
$228,029.    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.

                   PART II - OTHER INFORMATION
                           (Continued)
                                
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        a. Exhibits -
                       Description

           27  Financial Data Schedule  for  period
               ended March 31, 1997.

        b.     Reports filed on Form  8-K  -
               During the quarter ended March  31,
               1997, the Partnership filed a  Form
               8-K,   dated  February   3,   1997,
               reporting  the  sale  of  a  65.09%
               interest in a Sizzler restaurant in
               Cincinnati, Ohio.


                           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:  May 13, 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)