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, 2004

                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.)


    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 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, 2004 and December 31, 2003

          Statements for the Periods ended September 30, 2004 and 2003:

           Income

           Cash Flows

           Changes in Partners' Capital

          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
                          BALANCE SHEET
            SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

                           (Unaudited)

                             ASSETS

                                                    2004            2003
CURRENT ASSETS:
  Cash and Cash Equivalents                     $ 2,160,410     $ 2,980,144

INVESTMENTS IN REAL ESTATE:
  Land                                            2,485,095       2,842,888
  Buildings and Equipment                         6,210,497       7,158,222
  Accumulated Depreciation                       (1,281,021)     (1,612,587)
                                                 -----------     -----------
                                                  7,414,571       8,388,523
  Real Estate Held for Sale                       1,940,798       1,751,093
                                                 -----------     -----------
      Net Investments in Real Estate              9,355,369      10,139,616
                                                 -----------     -----------
           Total  Assets                        $11,515,779     $13,119,760
                                                 ===========     ===========

                           LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.          $    30,171     $    21,170
  Distributions Payable                             207,269         554,512
  Unearned Rent                                           0           6,274
                                                 -----------     -----------
      Total Current Liabilities                     237,440         581,956
                                                 -----------     -----------
PARTNERS' CAPITAL:
  General Partners                                   31,288          16,201
  Limited Partners, $1,000 per Unit;
   30,000 Units authorized; 23,389 Units issued;
   19,663 and 19,942 Units outstanding in
   2004 and 2003, respectively                   11,247,051      12,521,603
                                                 -----------     -----------
      Total Partners' Capital                    11,278,339      12,537,804
                                                 -----------     -----------
       Total Liabilities and Partners' Capital  $11,515,779     $13,119,760
                                                 ===========     ===========

 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
                            9/30/04        9/30/03    9/30/04       9/30/03

RENTAL INCOME            $   220,389   $   162,534  $   665,505  $   467,438

EXPENSES:
   Partnership Administration -
    Affiliates                42,854        55,232      141,419      153,814
   Partnership Administration
    and Property Management -
    Unrelated Parties         10,538         3,102       40,341       19,550
   Depreciation               53,622        31,916      160,865       91,698
                          -----------   -----------  -----------  -----------
      Total Expenses         107,014        90,250      342,625      265,062
                          -----------   -----------  -----------  -----------

OPERATING INCOME             113,375        72,284      322,880      202,376
OTHER INCOME:
   Interest Income             4,813        23,145       21,955       53,674
                          -----------   -----------  -----------  -----------
INCOME FROM CONTINUING
   OPERATIONS                118,188        95,429      344,835      256,050

Income from
  Discontinued Operations    906,300       899,906    3,446,589    2,134,417
                          -----------   -----------  -----------  -----------
NET INCOME               $ 1,024,488   $   995,335  $ 3,791,424  $ 2,390,467
                          ===========   ===========  ===========  ===========
NET INCOME ALLOCATED:
   General Partners      $    37,927   $     9,954  $    65,596  $    23,905
   Limited Partners          986,561       985,381    3,725,828    2,366,562
                          -----------   -----------  -----------  -----------
                         $ 1,024,488   $   995,335  $ 3,791,424  $ 2,390,467
                          ===========   ===========  ===========  ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
   Continuing Operations $      5.95   $      4.73  $     17.32  $     12.62
   Discontinued Operations     44.22         44.63       171.72       105.22
                          -----------   -----------  -----------  -----------
        Total            $     50.17   $     49.36  $    189.04  $    117.84
                          ===========   ===========  ===========  ===========
Weighted Average
   Units Outstanding          19,663        19,962       19,709       20,082
                          ===========   ===========  ===========  ===========

 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 NINE-MONTH PERIODS ENDED SEPTEMBER 30

                           (Unaudited)

                                                      2004            2003
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                     $ 3,791,424     $ 2,390,467

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                     196,802         178,903
     Gain on Sale of Real Estate                   (3,156,803)     (1,621,210)
     Decrease in Receivables                                0           9,982
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                       9,001         (31,509)
     Increase (Decrease) in Unearned Rent              (6,274)          8,779
                                                   -----------     -----------
            Total  Adjustments                     (2,957,274)     (1,455,055)
                                                   -----------     -----------
        Net Cash Provided By
           Operating Activities                       834,150         935,412
                                                   -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                      (1,955,054)     (1,028,421)
   Proceeds from Sale of Real Estate                5,699,302       3,869,253
                                                   -----------     ------------
       Net Cash Provided By
          Investing Activities                      3,744,248       2,840,832
                                                   -----------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                 (347,243)         (4,431)
   Distributions to  Partners                      (4,851,690)     (1,164,013)
   Redemption Payments                               (199,199)       (206,118)
                                                   -----------     -----------
        Net Cash Used For
          Financing  Activities                    (5,398,132)     (1,374,562)
                                                   -----------     -----------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                              (819,734)      2,401,682

CASH AND CASH EQUIVALENTS, beginning of period      2,980,144       3,332,053
                                                   -----------     -----------
CASH AND CASH EQUIVALENTS, end of period          $ 2,160,410     $ 5,733,735
                                                   ===========     ===========

 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, 2002  $  9,316   $11,892,631   $11,901,947    20,213.40

  Distributions              (11,640)   (1,152,373)   (1,164,013)

  Redemption Payments         (2,061)     (204,057)     (206,118)     (251.90)

  Net Income                  23,905     2,366,562     2,390,467
                             --------   -----------   -----------  -----------
BALANCE, September 30, 2003 $ 19,520   $12,902,763   $12,922,283    19,961.50
                             ========   ===========   ===========  ===========


BALANCE, December 31, 2003  $ 16,201   $12,521,603   $12,537,804    19,941.50

  Distributions              (48,517)   (4,803,173)   (4,851,690)

  Redemption Payments         (1,992)     (197,207)     (199,199)     (278.50)

  Net Income                  65,596     3,725,828     3,791,424
                             --------   -----------   -----------  -----------
BALANCE, September 30, 2004 $ 31,288   $11,247,051   $11,278,339    19,663.00
                             ========   ===========   ===========  ===========


 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, 2004

                           (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  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,  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)

(3)  Reclassification -

     Certain items in the prior year's financial statements  have
     been  reclassified  to conform to 2004 presentation.   These
     reclassifications  had no effect on Partners'  capital,  net
     income or cash flows.

(4)  Investments in Real Estate -

     On  April  3, 2003, the Partnership purchased a 50% interest
     in  a parcel of land in Mansfield, Texas for $383,000.   The
     Partnership  obtained title to the land in the  form  of  an
     undivided fee simple interest in the 50% interest purchased.
     The  land  is  leased to Kona Restaurant Group,  Inc.  (KRG)
     under a Lease Agreement with a primary term of 17 years  and
     annual rental payments of $38,300.  Simultaneously with  the
     purchase  of  the  land,  the  Partnership  entered  into  a
     Development  Financing Agreement under which the Partnership
     advanced  funds  to  KRG for the construction  of  a  Johnny
     Carino's restaurant on the site.  Pursuant to the Lease, any
     improvements to the land during the term of the Lease become
     the   property  of  the  lessor.   The  Partnership  charged
     interest  on the advances at a rate of 10.0%.  On  September
     3,  2003,  after  the development was completed,  the  Lease
     Agreement  was amended to require annual rental payments  of
     $103,250.   The Partnership's share of the total acquisition
     costs, including the cost of the land, was $1,028,885.   The
     remaining interest in the property was purchased by AEI Real
     Estate  Fund XVIII Limited Partnership, an affiliate of  the
     Partnership.

     On  November  5,  2003,  the  Partnership  purchased  a  50%
     interest in a Johnny Carino's restaurant in Longview,  Texas
     for  $1,179,878.  The property is leased to Kona  Restaurant
     Group,  Inc. under a Lease Agreement with a primary term  of
     17  years  and  annual  rental payments  of  $105,750.   The
     remaining interest in the property was purchased by AEI  Net
     Lease  Income  &  Growth  Fund XIX Limited  Partnership,  an
     affiliate of the Partnership.

     On  November  21,  2003,  the Partnership  purchased  a  50%
     interest  in  an Eckerd drug store in Cicero, New  York  for
     $1,586,183.   The  property is leased to Eckerd  Corporation
     under a Lease Agreement with a primary term of 20 years  and
     annual  rental payments of $126,257.  The remaining interest
     in  the  property was purchased by AEI Net  Lease  Income  &
     Growth  Fund  XX  Limited Partnership, an affiliate  of  the
     Partnership.

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

(4)  Investments in Real Estate - (Continued)

     In  July  2003,  the  lessee of the Razzoo's  restaurant  in
     Austin,  Texas  notified  the  Partnership  that  they  were
     experiencing financial difficulty stemming from  lower  than
     expected  sales and might not be able to pay  future  rents.
     However,  rents  are current.  Subsequent to  September  30,
     2004,  the  Partnership and lessee entered into an agreement
     to  amend  the Lease to provide the lessee with  options  to
     purchase  the property and terminate the Lease.   Under  the
     purchase option, which expires October 31, 2006, the  lessee
     can  elect  to  purchase the Partnership's interest  in  the
     property  for $442,000.  Under the termination  option,  the
     lessee can 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.   The  lease
     cannot be terminated prior to October 31, 2006.  As part  of
     this   agreement,  the  Partnership  received   a   personal
     guarantee  from the majority shareholder of the  lessee  for
     payment  of the rent through October 31, 2006.  In addition,
     the  Partnership was reimbursed for certain expenses related
     to   legal  action  it  pursued  in  connection  with   this
     situation,  which expenses will be recognized in the  fourth
     quarter of 2004.

(5)  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.

(6)  Discontinued Operations -

     During  the  first six months of 2003, the Partnership  sold
     its  26.05% interest in the Champps Americana restaurant  in
     Troy, Michigan, in eight separate transactions, to unrelated
     third  parties.   The Partnership received  total  net  sale
     proceeds  of  $1,753,563, which resulted in a  net  gain  of
     $602,200.    The   total   cost  and   related   accumulated
     depreciation  of  the  interests  sold  was  $1,289,135  and
     $137,772, respectively.

     During the second quarter of 2003, the Partnership sold  its
     14%   interest  in  the  Champps  Americana  restaurant   in
     Centerville,   Ohio,  in  four  separate  transactions,   to
     unrelated third parties.  The Partnership received total net
     sale  proceeds of $782,545, which resulted in a net gain  of
     $272,714.    The   total   cost  and   related   accumulated
     depreciation of the interests sold was $551,677 and $41,846,
     respectively.

     In  May  2003, the Partnership entered into an agreement  to
     sell the Taco Cabana restaurant in San Marcos, Texas, to the
     lessee.   On  July  30,  2003,  the  sale  closed  with  the
     Partnership receiving net sale proceeds of $1,333,145, which
     resulted  in a net gain of $746,296.  At the time  of  sale,
     the cost and related accumulated depreciation was $1,013,505
     and $426,656, respectively.

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

(6)  Discontinued Operations - (Continued)

     On  December  23,  2003,  the Partnership  entered  into  an
     agreement  to  sell  its  75% interest  in  the  Jiffy  Lube
     automotive  center in Dallas, Texas, to an  unrelated  third
     party.   In  the  fourth  quarter  of  2003,  a  charge   to
     operations  for  real  estate  impairment  of  $60,454   was
     recognized, which was the difference between book  value  at
     December  31,  2003 of $300,454 and the estimated  net  sale
     proceeds  of $240,000.  The charge was recorded against  the
     cost  of  the land and building.  At December 31, 2003,  the
     property  was classified as Real Estate Held for  Sale.   On
     February  23,  2004,  the sale closed with  the  Partnership
     receiving net sale proceeds of $242,485, which resulted in a
     net gain of $2,485.

     In  January 2004, the Partnership entered into an  agreement
     to  sell  the  Children's World daycare center in  Palatine,
     Illinois  to an unrelated third party.  On April  20,  2004,
     the  sale  closed  with the Partnership receiving  net  sale
     proceeds  of  $1,298,032, which resulted in a  net  gain  of
     $839,357.  At December 31, 2003, the property was classified
     as Real Estate Held for Sale with a book value of $458,675.

     In  February 2004, the Partnership entered into an agreement
     to  sell the Cheddar's restaurant in Davenport, Iowa  to  an
     unrelated  third party.  On April 27, 2004, the sale  closed
     with   the  Partnership  receiving  net  sale  proceeds   of
     $2,527,592, which resulted in a net gain of $1,475,174.   At
     December  31,  2003,  the property was  classified  as  Real
     Estate Held for Sale with a book value of $1,052,418.

     In September 2004, the Partnership entered into an agreement
     to  sell  the  Children's  World daycare  center  in  Chino,
     California  to  an unrelated third party.  On September  30,
     2004,  the  sale closed with the Partnership  receiving  net
     sale proceeds of $1,631,193, which resulted in a net gain of
     $839,787.   At  the  time  of sale,  the  cost  and  related
     accumulated   depreciation  was  $1,305,518  and   $514,112,
     respectively.

     On  April  30, 2004, the Partnership purchased an Applebee's
     restaurant in Ashland, Ohio for $1,955,054.  The property is
     leased  to  Apple  Ohio LLC under a Lease Agreement  with  a
     primary  term  of  20  years and annual rental  payments  of
     $149,066.

     Subsequent  to  September 30, 2004, the Partnership  entered
     into  an  agreement  to  sell the Applebee's  restaurant  in
     Ashland, Ohio to an unrelated third party.  The sale  closed
     with   the  Partnership  receiving  net  sale  proceeds   of
     approximately $2,307,000, which resulted in a  net  gain  of
     approximately $366,000.  At September 30, 2004, the property
     was  classified  as Real Estate Held for Sale  with  a  book
     value of $1,940,798.

     During  the  first  nine  months  of  2004  and  2003,   the
     Partnership distributed $4,211,668 and $411,424 of net  sale
     proceeds   to  the  Limited  and  General  Partners,   which
     represented  a return of capital of $211.99 and  $20.27  per
     Limited Partnership Unit, respectively.


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

(6)  Discontinued Operations - (Continued)

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the periods ended September 30:

                                Three Months Ended       Nine Months Ended
                              9/30/04       9/30/03    9/30/04      9/30/03

Rental Income                $  82,831   $ 170,210   $  329,391   $  602,558
Property Management Expenses      (531)      6,719       (3,668)      (2,146)
Depreciation                   (15,787)    (23,319)     (35,937)     (87,205)
Gain on Disposal
  of Real Estate               839,787     746,296    3,156,803    1,621,210
                              ---------   ----------  ----------   ----------
   Income from
     Discontinued Operations $ 906,300   $ 899,906   $3,446,589   $2,134,417
                              =========   ==========  ==========   ==========

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, taxation levels, 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
    affects of these consequences for the Partners;

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

    the   success  of  the  General  Partners  of   locating
    properties with favorable risk return characteristics;

    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

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.

        The Partnership purchases properties and records them  in
the  financial  statements  at the lower  of  cost  or  estimated
realizable   value.   The  Partnership  initially   records   the
properties  at cost (including capitalized acquisition expenses).
The Partnership is required to periodically evaluate the carrying
value  of properties to determine whether their realizable  value
has  declined.   For  properties the Partnership  will  hold  and
operate, management determines whether impairment has occurred by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.

       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.

Results of Operations

       For the nine months ended September 30, 2004 and 2003, the
Partnership  recognized rental income from continuing  operations
of  $665,505 and $467,438, respectively.  In 2004, rental  income
increased  due  to additional rent received from  three  property
acquisitions  in  2003  and  2004  and  rent  increases  on   two
properties.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

       For the nine months ended September 30, 2004 and 2003, the
Partnership  incurred  Partnership administration  expenses  from
affiliated parties of $141,419 and $153,814, 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  $40,341 and $19,550, 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  increase
in  these expenses in 2004, when compared to 2003, is mainly  the
result  of  expenses  incurred related to the Razzoo's  situation
discussed below.

        In  July  2003, the lessee of the Razzoo's restaurant  in
Austin,   Texas   notified  the  Partnership   that   they   were
experiencing  financial  difficulty  stemming  from  lower   than
expected  sales  and  might  not be able  to  pay  future  rents.
However,  rents are current.  Subsequent to September  30,  2004,
the Partnership and lessee entered into an agreement to amend the
Lease to provide the lessee with options to purchase the property
and  terminate  the  Lease.   Under the  purchase  option,  which
expires  October 31, 2006, the lessee can elect to  purchase  the
Partnership's interest in the property for $442,000.   Under  the
termination option, the lessee can 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.  The lease
cannot be terminated prior to October 31, 2006.  As part of  this
agreement, the Partnership received a personal guarantee from the
majority  shareholder  of  the lessee for  payment  of  the  rent
through  October  31,  2006.  In addition,  the  Partnership  was
reimbursed  for  certain  expenses related  to  legal  action  it
pursued in connection with this situation, which expenses will be
recognized in the fourth quarter of 2004.

       For the nine months ended September 30, 2004 and 2003, the
Partnership  recognized interest income of $21,955  and  $53,674,
respectively.   In  2004, interest income decreased  due  to  the
Partnership  receiving  interest from constructions  advances  in
2003 and having less money invested in a money market account due
to property acquisitions.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Partnership  includes  the operating  results  and  sale  of  the
property   in   discontinued  operations.    In   addition,   the
Partnership reclassifies the prior periods operating results  and
any  partial  sales  of the property to discontinued  operations.
For  the  nine  months ended September 30, 2004, the  Partnership
recognized  income  from discontinued operations  of  $3,446,589,
representing rental income less property management  expenses  of
$289,786 and gain on disposal of real estate of $3,156,803.   For
the  nine  months  ended  September  30,  2003,  the  Partnership
recognized  income  from discontinued operations  of  $2,134,417,
representing rental income less property management expenses  and
depreciation of $513,207 and gain on disposal of real  estate  of
$1,621,210.

        During the first six months of 2003, the Partnership sold
its  26.05% interest in the Champps Americana restaurant in Troy,
Michigan,  in  eight  separate transactions, to  unrelated  third
parties.   The  Partnership received total net sale  proceeds  of
$1,753,563, which resulted in a net gain of $602,200.  The  total
cost  and related accumulated depreciation of the interests  sold
was $1,289,135 and $137,772, respectively.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        During  the second quarter of 2003, the Partnership  sold
its   14%  interest  in  the  Champps  Americana  restaurant   in
Centerville,  Ohio, in four separate transactions,  to  unrelated
third  parties.  The Partnership received total net sale proceeds
of $782,545, which resulted in a net gain of $272,714.  The total
cost  and related accumulated depreciation of the interests  sold
was $551,677 and $41,846, respectively.

        In May 2003, the Partnership entered into an agreement to
sell  the  Taco  Cabana restaurant in San Marcos, Texas,  to  the
lessee.   On  July 30, 2003, the sale closed with the Partnership
receiving  net sale proceeds of $1,333,145, which resulted  in  a
net  gain of $746,296.  At the time of sale, the cost and related
accumulated    depreciation   was   $1,013,505   and    $426,656,
respectively.

        On  December  23, 2003, the Partnership entered  into  an
agreement  to sell its 75% interest in the Jiffy Lube  automotive
center  in  Dallas, Texas, to an unrelated third party.   In  the
fourth  quarter of 2003, a charge to operations for  real  estate
impairment  of  $60,454 was recognized, which was the  difference
between  book  value  at December 31, 2003 of  $300,454  and  the
estimated net sale proceeds of $240,000.  The charge was recorded
against the cost of the land and building.  At December 31, 2003,
the  property  was classified as Real Estate Held for  Sale.   On
February 23, 2004, the sale closed with the Partnership receiving
net  sale proceeds of $242,485, which resulted in a net  gain  of
$2,485.

       In January 2004, the Partnership entered into an agreement
to sell the Children's World daycare center in Palatine, Illinois
to  an unrelated third party.  On April 20, 2004, the sale closed
with  the  Partnership receiving net sale proceeds of $1,298,032,
which  resulted in a net gain of $839,357.  At December 31, 2003,
the  property was classified as Real Estate Held for Sale with  a
book value of $458,675.

         In  February  2004,  the  Partnership  entered  into  an
agreement to sell the Cheddar's restaurant in Davenport, Iowa  to
an  unrelated  third party.  On April 27, 2004, the  sale  closed
with  the  Partnership receiving net sale proceeds of $2,527,592,
which  resulted  in a net gain of $1,475,174.   At  December  31,
2003,  the property was classified as Real Estate Held  for  Sale
with a book value of $1,052,418.

        In  September  2004,  the  Partnership  entered  into  an
agreement  to sell the Children's World daycare center in  Chino,
California to an unrelated third party.  On September  30,  2004,
the  sale closed with the Partnership receiving net sale proceeds
of  $1,631,193, which resulted in a net gain of $839,787.  At the
time  of sale, the cost and related accumulated depreciation  was
$1,305,518 and $514,112, respectively.

        Subsequent to September 30, 2004, the Partnership entered
into  an  agreement to sell the Applebee's restaurant in Ashland,
Ohio  to  an  unrelated third party.  The sale  closed  with  the
Partnership   receiving  net  sale  proceeds   of   approximately
$2,307,000,  which  resulted  in  a  net  gain  of  approximately
$366,000.  At September 30, 2004, the property was classified  as
Real Estate Held for Sale with a book value of $1,940,798.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        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.   In addition, leases may contain  rent  clauses
which  entitle  the  Partnership to receive  additional  rent  in
future  years  if gross receipts for the property exceed  certain
specified  amounts.  Increases in sales volumes of  the  tenants,
due to inflation and real sales growth, may 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.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  2004,  the
Partnership's  cash balances decreased $819,734 as  a  result  of
cash used to purchase property and cash distributions of net sale
proceeds  paid  to the Partners, which were partially  offset  by
cash generated from the sale of property.  During the nine months
ended   September  30,  2003,  the  Partnership's  cash  balances
increased $2,401,682 as a result of cash generated from the  sale
of  property, which was partially offset by cash used to purchase
property and distributions paid to the Partners in excess of cash
generated from operating activities.

        Net  cash provided by operating activities decreased from
$935,412  in 2003 to $834,150 in 2004 due to a decrease in  total
rental and interest income in 2004 and an increase in Partnership
administration  and property management expenses in  2004,  which
were partially offset by net timing differences in the collection
of payments from lessees and the payment of expenses.

        The  major components of the Partnership's cash flow from
investing activities are investments in real estate and  proceeds
from  the  sale  of  real estate.  During the nine  months  ended
September 30, 2004 and 2003, the Partnership generated cash  flow
from  the  sale  of  real  estate of $5,699,302  and  $3,869,253,
respectively.  During the same periods, the Partnership  expended
$1,955,054  and  $1,028,421,  respectively,  to  invest  in  real
properties (inclusive of acquisition expenses) as the Partnership
reinvested cash generated from property sales.

       On April 3, 2003, the Partnership purchased a 50% interest
in  a  parcel  of  land in Mansfield, Texas  for  $383,000.   The
Partnership  obtained  title  to the  land  in  the  form  of  an
undivided fee simple interest in the 50% interest purchased.  The
land is leased to Kona Restaurant Group, Inc. (KRG) under a Lease
Agreement  with  a  primary term of 17 years  and  annual  rental
payments  of  $38,300.  Simultaneously with the purchase  of  the
land,  the  Partnership  entered  into  a  Development  Financing
Agreement under which the Partnership advanced funds to  KRG  for
the  construction of a Johnny Carino's restaurant  on  the  site.
Pursuant  to the Lease, any improvements to the land  during  the
term  of  the  Lease  become the property  of  the  lessor.   The
Partnership charged interest on the advances at a rate of  10.0%.
On  September  3, 2003, after the development was completed,  the
Lease Agreement was amended to require annual rental payments  of
$103,250.   The  Partnership's share  of  the  total  acquisition
costs,  including  the  cost of the land,  was  $1,028,885.   The
remaining  interest  in the property was purchased  by  AEI  Real
Estate  Fund  XVIII  Limited Partnership,  an  affiliate  of  the
Partnership.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        On  November  5,  2003, the Partnership purchased  a  50%
interest  in a Johnny Carino's restaurant in Longview, Texas  for
$1,179,878.   The  property is leased to Kona  Restaurant  Group,
Inc. under a Lease Agreement with a primary term of 17 years  and
annual  rental payments of $105,750.  The remaining  interest  in
the  property was purchased by AEI Net Lease Income & Growth Fund
XIX Limited Partnership, an affiliate of the Partnership.

        On  November  21, 2003, the Partnership purchased  a  50%
interest  in  an  Eckerd  drug store  in  Cicero,  New  York  for
$1,586,183.  The property is leased to Eckerd Corporation under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $126,257.  The remaining interest in the property was
purchased  by  AEI  Net  Lease Income & Growth  Fund  XX  Limited
Partnership, an affiliate of the Partnership.

       On April 30, 2004, the Partnership purchased an Applebee's
restaurant  in  Ashland, Ohio for $1,955,054.   The  property  is
leased  to Apple Ohio LLC under a Lease Agreement with a  primary
term of 20 years and annual rental payments of $149,066.

        The  Partnership's primary use of cash flow,  other  than
investment   in  real  estate,  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 on a quarterly basis.

       For the nine months ended September 30, 2004 and 2003, the
Partnership  declared distributions of $4,851,690 and $1,164,013,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of  $4,803,173  and  $1,152,373  and  the  General
Partners  received distributions of $48,517 and $11,640  for  the
periods,   respectively.   In  March  and  December   2003,   the
Partnership   declared  bonus  distributions  of   $252,525   and
$272,727, respectively, of net sale proceeds.  In June and August
2004,  the  Partnership declared bonus distributions of  $505,051
and   $3,535,355,  respectively,  of  net  sale  proceeds,  which
resulted in higher distributions in 2004.

        During  the  first  nine months of  2004  and  2003,  the
Partnership  distributed  $4,211,668 and  $411,424  of  net  sale
proceeds to the Limited and General Partners, which represented a
return  of  capital of $211.99 and $20.27 per Limited Partnership
Unit, respectively.

        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.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        During the first nine months of 2004, 26 Limited Partners
redeemed  a  total  of 278.5 Partnership Units  for  $197,207  in
accordance with the Partnership Agreement.  During the first nine
months  of  2003, 23 Limited Partners redeemed a total  of  251.9
Partnership  Units for $204,057.  The Partnership acquired  these
Units  using  Net Cash Flow from operations.  In prior  years,  a
total  of 246 Limited Partners redeemed 3,175.3 Partnership Units
for  $2,313,522.  The redemptions increase the remaining  Limited
Partners' ownership interest in the Partnership.  As a result  of
these   redemption  payments  and  pursuant  to  the  Partnership
Agreement, the General Partners received distributions of  $1,992
and $2,061 in 2004 and 2003, 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 on both a short-term and long-term basis.

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   are
adequately  designed to ensure 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.

       (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.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS
      (Continued)

        (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.

      Small Business Issuer Purchases of Equity Securities


                                      Total Number of Units Maximum Number of
              Total Number   Average  Purchased as Part of  Units that May Yet
               of Units    Price Paid Publicly Announced    Be Purchased Under
Period         Purchased    per Unit  Plans or Programs     the   Plans     or
                                                            Programs

7/1/04 to 7/31/04  32.5      $775.82      3,725.70(1)                (2)

8/1/04 to 8/31/04   --          --            --                      --

9/1/04 to 9/30/04   --          --            --                      --

  (1)   The  Partnership's  repurchase plan is  mandated  by  the
        Partnership Agreement as included in the prospectus related to
        the original offering of the Units.
  (2)   The Partnership Agreement contains annual limitations  on
        repurchases  described in the paragraph  above  and  has  no
        expiration date.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5.OTHER INFORMATION

      None.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS

    10.1  Purchase  Agreement dated October 7, 2004  between  the
    Partnership and Gerald N. Becker and Mary K. Becker  relating
    to  the  Property  at  2250 Claremont Avenue,  Ashland,  Ohio
    (incorporated by reference to Exhibit 10.1 of Form 8-K  filed
    October 25, 2004).

    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 10, 2004     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)