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, 1998
                                
                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)
                                
                          (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, 1998 and  December 31, 1997 

          Statements for the Periods ended September 30, 1998 and 1997:

            Income                                     
 
            Cash Flows                                 

            Changes in Partners' Capital               

          Notes to Financial Statements               

 Item 2. Management's Discussion and Analysis    

PART II. Other Information

 Item 1. Legal Proceedings                          

 Item 2. Changes in Securities                      

 Item 3. Defaults Upon Senior Securities            

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

 Item 5. Other Information                          

 Item 6. Exhibits and Reports on Form 8-K           

<PAGE>
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                          BALANCE SHEET
                                
            SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
                                
                           (Unaudited)
                                
                             ASSETS

                                                       1998            1997

CURRENT ASSETS:
  Cash and Cash Equivalents                       $   479,820     $ 2,615,163
  Receivables                                           1,867           1,014
                                                   -----------     -----------
      Total current Assets                            481,687       2,616,177
                                                   -----------     -----------

INVESTMENTS IN REAL ESTATE:
  Land                                              4,933,769       4,416,278
  Buildings and Equipment                          10,819,889       8,975,829
  Construction in Progress                             51,963          46,997
  Property Acquisition Costs                            6,375          52,844
  Accumulated Depreciation                         (2,767,779)     (2,778,790)
                                                   -----------     -----------
                                                   13,044,217      10,713,158
  Real Estate Held for Sale                           199,644         199,644
                                                   -----------     -----------
    Net Investments in Real Estate                 13,243,861      10,912,802
                                                   -----------     -----------
        Total Assets                              $13,725,548     $13,528,979
                                                   ===========     ===========
                                
                           LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    28,001     $    45,489
  Distributions Payable                               204,048         168,778
  Unearned Rent                                        66,255               0
                                                   -----------     -----------
      Total Current Liabilities                       298,304         214,267
                                                   -----------     -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                    (67,140)        (68,265)
  Limited Partners, $1,000 Unit value;
   30,000 Units authorized; 23,389 Units issued;
   22,159 and 22,556 Units outstanding in 1998
   and 1997, respectively                          13,494,384      13,382,977
                                                   -----------     -----------
      Total Partners' Capital                      13,427,244      13,314,712
                                                   -----------     -----------
        Total Liabilities and Partners' Capital   $13,725,548     $13,528,979
                                                   ===========     ===========

 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
                              9/30/98       9/30/97     9/30/98       9/30/97

INCOME:
 Rent                       $ 386,477    $ 335,386   $ 1,119,975   $   953,877
 Investment Income             45,217       64,903       132,368       190,367
                             ---------    ---------   -----------   -----------
        Total Income          431,694      400,289     1,252,343     1,144,244
                             ---------    ---------   -----------   -----------

EXPENSES:
 Partnership Administration - 
  Affiliates                   57,164       65,647       192,584       201,015
 Partnership Administration 
  and Property Management - 
  Unrelated Parties             5,728       19,476        39,318        74,552
 Depreciation                  89,114       83,778       258,146       251,533
                             ---------    ---------   -----------   -----------
        Total Expenses        152,006      168,901       490,048       527,100
                             ---------    ---------   -----------   -----------

OPERATING INCOME              279,688      231,388       762,295       617,144

GAIN ON SALE OF REAL ESTATE         0            0       416,282             0
                             ---------    ---------   -----------   -----------
NET INCOME                  $ 279,688    $ 231,388   $ 1,178,577   $   617,144
                             =========    =========   ===========   ===========

NET INCOME ALLOCATED:
 General Partners           $   2,796    $   2,314   $    11,786   $     6,172
 Limited Partners             276,892      229,074     1,166,791       610,972
                             ---------    ---------   -----------   -----------
                            $ 279,688    $ 231,388   $ 1,178,577   $   617,144
                             =========    =========   ===========   ===========
NET INCOME PER
 LIMITED PARTNERSHIP UNIT
 (22,159, 22,920, 22,377
 and 22,920 weighted average 
 Units outstanding for the 
 periods, respectively)     $   12.50    $   10.00   $     52.14   $     26.66
                             =========    =========   ===========   ===========
                                
                                
 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                     STATEMENT OF CASH FLOWS
                                
               FOR THE PERIODS ENDED SEPTEMBER 30
                                
                           (Unaudited)
                                
                                                       1998            1997

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net  Income                                     $ 1,178,577    $   617,144

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                      258,146        251,533
     Gain on Sale of Real Estate                      (416,282)             0
     Increase in Receivables                              (853)             0
     Decrease in Payable to
        AEI Fund Management, Inc.                      (17,488)       (73,716)
     Increase in Security Deposit                            0         12,646
     Increase in Unearned Rent                          66,255         62,787
                                                    -----------    -----------
        Total Adjustments                             (110,222)       253,250
                                                    -----------    -----------
        Net Cash Provided By
        Operating Activities                         1,068,355        870,394
                                                    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                       (3,023,919)             0
   Proceeds from Sale of Real Estate                   850,996        315,229
                                                    -----------    -----------
        Net Cash Provided By (Used For)
         Investing Activities                       (2,172,923)       315,229
                                                    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase (Decrease) in Distributions Payable         35,270       (127,705)
   Distributions to Partners                          (776,673)    (1,008,372)
   Redemption Payments                                (289,372)             0
                                                    -----------    -----------
        Net Cash Used For
         Financing Activities                       (1,030,775)    (1,136,077)
                                                    -----------    -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS                           (2,135,343)        49,546

CASH AND CASH EQUIVALENTS, beginning of period       2,615,163      4,798,584
                                                    -----------    -----------
CASH AND CASH EQUIVALENTS, end of period           $   479,820    $ 4,848,130
                                                    ===========    ===========

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

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

  Net Income                     6,172       610,972      617,144
                              ---------   -----------  -----------  -----------
BALANCE, September 30, 1997  $ (66,692)  $13,538,680  $13,471,988    22,920.29
                              =========   ===========  ===========  ===========


BALANCE, December 31, 1997   $ (68,265)  $13,382,977  $13,314,712    22,555.89

  Distributions                 (7,767)     (768,906)    (776,673)

  Redemption Payments           (2,894)     (286,478)    (289,372)     (396.40)

  Net Income                    11,786     1,166,791    1,178,577
                              ---------   -----------  -----------  -----------
BALANCE, September 30, 1998  $ (67,140)  $13,494,384  $13,427,244    22,159.49
                              =========   ===========  ===========  ===========



 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, 1998
                                
                           (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.,  (AEI)  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 -

     The  Partnership  owns a 65% interest  in  a  J.T.  McCord's
     restaurant  in  Mesquite, Texas.   In  December,  1995,  the
     Partnership took possession of the property after the lessee
     was  unable  to  perform under the terms of the  Lease.   In
     July,  1996,  the Partnership entered into an  agreement  to
     sell   the  property  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.  While the  property
     was being re-leased, the Partnership was responsible for the
     real  estate taxes and other costs required to maintain  the
     property.
     
     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.  As of
     December 31, 1997, based on an analysis of market conditions
     in  the  area,  it  was determined the  fair  value  of  the
     Partnership's   interest  in  the  land  was   approximately
     $200,000.   In  the  fourth quarter of  1997,  a  charge  to
     operations  for  real  estate  impairment  of  $62,000   was
     recognized, which is the difference between the  book  value
     at  December  31,  1997 of $261,644 and the  estimated  fair
     value of $200,000.
     
     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.
     
     On  February 20, 1998, the Partnership sold the  am/pm  Mini
     Market  in Carson City, Nevada to an unrelated third  party.
     The  Partnership  received net sale  proceeds  of  $850,996,
     which  resulted in a net gain of $416,282.  At the  time  of
     sale,  the  cost  and related accumulated  depreciation  was
     $703,871 and $269,157, respectively.
     
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     During  the  first  nine  months  of  1998  and  1997,   the
     Partnership distributed $45,603 and $139,694 of the net sale
     proceeds  to  the Limited and General Partners  as  part  of
     their  regular quarterly distributions, which represented  a
     return of capital of $2.02 and $6.04 per Limited Partnership
     Unit,  respectively.   In June, 1997, the  Managing  General
     Partner  filed a proxy statement to propose an Amendment  to
     the  Limited  Partnership Agreement  that  would  allow  the
     Partnership  to reinvest the majority of the sales  proceeds
     in  additional  properties.  The  Amendment  passed  with  a
     majority of Units voting in favor of the Amendment.
     
     In October, 1997, the Partnership entered into a Development
     Financing  Commitment  under  which  the  Partnership  would
     advance  funds  for  the  construction  of  a  Timber  Lodge
     Steakhouse  restaurant in Rockford, Illinois.  The  purchase
     price was approximately $1,620,000.  The property would have
     been  leased to Timber Lodge Steakhouse, Inc. under a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments  of approximately $174,000.  In January, 1998,  the
     Commitment  was  terminated  by  mutual  agreement  of   the
     parties.
     
     On  November 18, 1997, the Partnership purchased  a  30.794%
     interest  in  a  Timber  Lodge  Steakhouse  in  St.   Cloud,
     Minnesota  for $493,492.  The property is leased  to  Timber
     Lodge  Steakhouse,  Inc.  under a  Lease  Agreement  with  a
     primary  term  of  20  years and annual rental  payments  of
     $51,537.  The remaining interests in the property are  owned
     by  AEI  Real  Estate  Fund XV Limited Partnership  and  AEI
     Institutional  Net  Lease  Fund  '93  Limited   Partnership,
     affiliates of the Partnership.
     
     On  December  10,  1997, the Partnership purchased  a  60.0%
     interest   in  a  TGI  Friday's  restaurant  in  Greensburg,
     Pennsylvania for $1,009,045.  The property is leased to Ohio
     Valley  Bistros, Inc. under a Lease Agreement with a primary
     term  of  15  years and annual rental payments of  $101,475.
     The  remaining interest in the property was purchased by AEI
     Income  & Growth Fund XXII Limited Partnership, an affiliate
     of the Partnership.
     
     On  December  23, 1997, the Partnership purchased  a  26.05%
     interest in a parcel of land in Troy, Michigan for $393,620.
     The  land is leased to Champps Entertainment, Inc. (Champps)
     under a Lease Agreement with a primary term of 20 years  and
     annual rental payments of $27,553.  Effective June 20, 1998,
     the  annual  rent was increased to $41,330.   Simultaneously
     with  the purchase of the land, the Partnership entered into
     a   Development   Financing  Agreement   under   which   the
     Partnership  advanced funds to Champps for the  construction
     of  a  Champps Americana restaurant on the site.  Initially,
     the  Partnership charged interest on the advances at a  rate
     of  7.0%.   Effective June 20, 1998, the interest  rate  was
     increased  to  10.50%.   On September  3,  1998,  after  the
     development  was completed, the Lease Agreement was  amended
     to   require  annual  rental  payments  of  $133,356.    The
     Partnership's   share  of  the  total   acquisition   costs,
     including  the  cost  of  the  land,  was  $1,289,135.   The
     remaining  interests in the property are owned by  AEI  Real
     Estate  Fund  XV Limited Partnership, AEI Real  Estate  Fund
     XVIII  Limited Partnership and AEI Net Lease Income & Growth
     Fund XIX Limited Partnership, affiliates of the Partnership.
     
                                
          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     On  January 15, 1998, the Partnership purchased a parcel  of
     land  in  Rochester, Minnesota for $406,778.   The  land  is
     leased to Timber Lodge Steakhouse, Inc. (TLS) under a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments  of  $30,133.  Effective May 14, 1998,  the  annual
     rent  was  increased  to $42,327.  Simultaneously  with  the
     purchase  of  the  land,  the  Partnership  entered  into  a
     Development  Financing Agreement under which the Partnership
     advanced funds to TLS for the construction of a Timber Lodge
     Steakhouse   restaurant  on  the   site.    Initially,   the
     Partnership charged interest on the advances at  a  rate  of
     7.5%.   Effective  May  14,  1998,  the  interest  rate  was
     increased  to  10.535%.  On September  3,  1998,  after  the
     development  was completed, the Lease Agreement was  amended
     to  require  annual  rental  payments  of  $198,364.   Total
     acquisition  costs, including the cost  of  the  land,  were
     $1,910,768.
     
     On August 28, 1998, the Partnership purchased a 14% interest
     in  a parcel of land in Centerville, Ohio for $259,138.  The
     land is leased to Americana Dining Corporation (ADC) under a
     Lease  Agreement with a primary term of 20 years and  annual
     rental   payments  of  $18,140.   Simultaneously  with   the
     purchase  of  the  land,  the  Partnership  entered  into  a
     Development  Financing Agreement under which the Partnership
     will  advance funds to ADC for the construction of a Champps
     Americana  restaurant  on the site.  Through  September  30,
     1998,   the  Partnership  had  advanced  $51,963   for   the
     construction  of the property and was charging  interest  on
     the  advances at a rate of 7%.  The Partnership's  share  of
     the  total  purchase price, including the cost of the  land,
     will  be approximately $592,900.  After the construction  is
     complete,  the  Lease Agreement will be amended  to  require
     annual  rental  payments  of  approximately  $61,000.    The
     Partnership has incurred net costs of $6,375 related to  the
     acquisition   of   the  property.   The  costs   have   been
     capitalized  and  will be allocated to  land,  building  and
     equipment.   The  remaining interests in  the  property  are
     owned by AEI Real Estate Fund XVIII Limited Partnership, AEI
     Income  & Growth Fund XXI Limited Partnership and AEI Income
     &  Growth Fund XXII Limited Partnership, affiliates  of  the
     Partnership.
     
(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 nine months ended September 30, 1998 and 1997, the
Partnership recognized rental income of $1,119,975 and  $953,877,
respectively.   During the same periods, the  Partnership  earned
investment  income  of $132,368 and $190,367,  respectively.   In
1998,  rental income increased as a result of rent received  from
five  property acquisitions in 1997 and 1998, rent received  from
re-leasing the restaurant in Mesquite, Texas, and rent  increases
on  nine  properties.   These increases  in  rental  income  were
partially offset by a decrease in rent due to a property sale  in
1998  and  a  decrease in investment income  earned  on  the  net
proceeds prior to the purchase of the additional properties.

        The  Partnership owns a 65% interest in a  J.T.  McCord's
restaurant   in   Mesquite,  Texas.   In  December,   1995,   the
Partnership took possession of the property after the lessee  was
unable  to perform under the terms of the Lease.  In July,  1996,
the Partnership entered into an agreement to sell the property 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.   While  the property was being re-leased, the  Partnership
was  responsible  for  the  real estate  taxes  and  other  costs
required to maintain the property.

        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.

        During the nine months ended September 30, 1998 and 1997,
the  Partnership  paid  Partnership  administration  expenses  to
affiliated parties of $192,584 and $201,015, 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  $39,318 and $74,552, 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.

        As  of  September 30, 1998, 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.


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

        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.

        AEI  Fund  Management, Inc. (AEI) performs all management
services  for  the Partnership.  AEI is currently  analyzing  its
computer hardware and software systems to determine what, if any,
resources  need to be dedicated regarding Year 2000 issues.   The
Partnership  does  not  anticipate  any  significant  operational
impact  or  incurring material costs as a result of AEI  becoming
Year 2000 compliant.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  1998,  the
Partnership's  cash  balances decreased $2,135,343  mainly  as  a
result  of  the  reinvestment of net sale proceeds in  additional
properties.  Net cash provided by operating activities  increased
from $870,394 in 1997 to $1,068,355 in 1998 mainly as a result of
an increase in income and a decrease in expenses in 1998.

        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.  For  the  nine  months  ended
SeptemberE30, 1998 and 1997, the Partnership generated cash  flow
from   the   sale  of  real  estate  of  $850,996  and  $315,229,
respectively.  During the same periods, the Partnership  expended
$3,023,919  and  $0  respectively, to invest in  real  properties
(inclusive of acquisition expenses) as the Partnership reinvested
the cash generated from the property sales.

         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.  As of DecemberE31, 1997,  based  on  an
analysis of market conditions in the area, it was determined  the
fair  value  of  the  Partnership's  interest  in  the  land  was
approximately $200,000.  In the fourth quarter of 1997, a  charge
to   operations  for  real  estate  impairment  of  $62,000   was
recognized,  which is the difference between the  book  value  at
December  31,  1997 of $261,644 and the estimated fair  value  of
$200,000.

        On February 20, 1998, the Partnership sold the am/pm Mini
Market  in Carson City, Nevada to an unrelated third party.   The
Partnership  received  net  sale  proceeds  of  $850,996,   which
resulted  in  a net gain of $416,282.  At the time of  sale,  the
cost  and  related  accumulated  depreciation  was  $703,871  and
$269,157, respectively.


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

        During  the  first  nine months of  1998  and  1997,  the
Partnership  distributed $45,603 and $139,694  of  the  net  sale
proceeds  to  the Limited and General Partners as part  of  their
regular  quarterly distributions, which represented a  return  of
capital  of  $2.02  and  $6.04  per  Limited  Partnership   Unit,
respectively.  In June, 1997, the Managing General Partner  filed
a  proxy  statement  to  propose  an  Amendment  to  the  Limited
Partnership  Agreement  that  would  allow  the  Partnership   to
reinvest  the  majority  of  the  sales  proceeds  in  additional
properties.  The Amendment passed with a majority of Units voting
in favor of the Amendment.

         In  October,  1997,  the  Partnership  entered  into   a
Development  Financing  Commitment under  which  the  Partnership
would  advance  funds  for the construction  of  a  Timber  Lodge
Steakhouse restaurant in Rockford, Illinois.  The purchase  price
was  approximately  $1,620,000.  The  property  would  have  been
leased  to  Timber Lodge Steakhouse, Inc. under a Lease Agreement
with  a  primary term of 20 years and annual rental  payments  of
approximately  $174,000.  In January, 1998,  the  Commitment  was
terminated by mutual agreement of the parties.

        On November 18, 1997, the Partnership purchased a 30.794%
interest in a Timber Lodge Steakhouse in St. Cloud, Minnesota for
$493,492.   The  property is leased to Timber  Lodge  Steakhouse,
Inc. under a Lease Agreement with a primary term of 20 years  and
annual  rental payments of $51,537.  The remaining  interests  in
the  property  are  owned  by AEI Real  Estate  Fund  XV  Limited
Partnership  and  AEI Institutional Net Lease  Fund  '93  Limited
Partnership, affiliates of the Partnership.

        On  December 10, 1997, the Partnership purchased a  60.0%
interest in a TGI Friday's restaurant in Greensburg, Pennsylvania
for  $1,009,045.  The property is leased to Ohio Valley  Bistros,
Inc. under a Lease Agreement with a primary term of 15 years  and
annual  rental payments of $101,475.  The remaining  interest  in
the  property  was  purchased by AEI Income &  Growth  Fund  XXII
Limited Partnership, an affiliate of the Partnership.

        On  December 23, 1997, the Partnership purchased a 26.05%
interest in a parcel of land in Troy, Michigan for $393,620.  The
land  is leased to Champps Entertainment, Inc. (Champps) under  a
Lease Agreement with a primary term of 20 years and annual rental
payments  of  $27,553.  Effective June 20, 1998, the annual  rent
was  increased to $41,330.  Simultaneously with the  purchase  of
the  land,  the Partnership entered into a Development  Financing
Agreement  under which the Partnership advanced funds to  Champps
for  the  construction of a Champps Americana restaurant  on  the
site.   Initially,  the  Partnership  charged  interest  on   the
advances  at  a  rate  of 7.0%.  Effective  June  20,  1998,  the
interest  rate  was increased to 10.50%.  On September  3,  1998,
after  the  development was completed, the  Lease  Agreement  was
amended  to  require  annual rental payments  of  $133,356.   The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,289,135.  The remaining interests in the
property   are  owned  by  AEI  Real  Estate  Fund   XV   Limited
Partnership,  AEI Real Estate Fund XVIII Limited Partnership  and
AEI  Net  Lease  Income  & Growth Fund XIX  Limited  Partnership,
affiliates of the Partnership.


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

       On January 15, 1998, the Partnership purchased a parcel of
land in Rochester, Minnesota for $406,778.  The land is leased to
Timber Lodge Steakhouse, Inc. (TLS) under a Lease Agreement  with
a primary term of 20 years and annual rental payments of $30,133.
Effective May 14, 1998, the annual rent was increased to $42,327.
Simultaneously  with  the purchase of the land,  the  Partnership
entered  into a Development Financing Agreement under  which  the
Partnership  advanced  funds to TLS for  the  construction  of  a
Timber  Lodge Steakhouse restaurant on the site.  Initially,  the
Partnership charged interest on the advances at a rate  of  7.5%.
Effective  May  14,  1998, the interest  rate  was  increased  to
10.535%.   On  September  3,  1998,  after  the  development  was
completed,  the  Lease Agreement was amended  to  require  annual
rental  payments of $198,364.  Total acquisition costs, including
the cost of the land, were $1,910,768.

        On  August  28,  1998, the Partnership  purchased  a  14%
interest  in a parcel of land in Centerville, Ohio for  $259,138.
The land is leased to Americana Dining Corporation (ADC) under  a
Lease Agreement with a primary term of 20 years and annual rental
payments  of  $18,140.  Simultaneously with the purchase  of  the
land,  the  Partnership  entered  into  a  Development  Financing
Agreement under which the Partnership will advance funds  to  ADC
for  the  construction of a Champps Americana restaurant  on  the
site.   Through September 30, 1998, the Partnership had  advanced
$51,963  for  the construction of the property and  was  charging
interest  on  the  advances at a rate of 7%.   The  Partnership's
share  of  the total purchase price, including the  cost  of  the
land, will be approximately $592,900.  After the construction  is
complete,  the Lease Agreement will be amended to require  annual
rental  payments  of approximately $61,000.  The Partnership  has
incurred  net costs of $6,375 related to the acquisition  of  the
property.   The costs have been capitalized and will be allocated
to  land, building and equipment.  The remaining interests in the
property  are  owned  by  AEI  Real  Estate  Fund  XVIII  Limited
Partnership, AEI Income & Growth Fund XXI Limited Partnership and
AEI Income & Growth Fund XXII Limited Partnership, affiliates  of
the Partnership.

       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 on  a  quarterly  basis.   The
redemption  payments generally are funded with  cash  that  would
normally  be paid as part of the regular quarterly distributions.
As  a  result, total distributions and distributions payable have
fluctuated  from year to year due to cash used to fund redemption
payments.

        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  (Continued)

        On  April  1, 1998, fourteen Limited Partners redeemed  a
total  of  137.20  Units  for  $99,154  in  accordance  with  the
Partnership  Agreement.   On  July  1,  1998,  eighteen   Limited
Partners  redeemed  a  total of 259.20 Units  for  $187,324.   On
October  1, 1998, nineteen Limited Partners redeemed a  total  of
211.60 Units for $158,702.  The Partnership acquired these  Units
using Net Cash Flow from operations.  In prior years, a total  of
forty-five Limited Partners redeemed 832.9 Partnership Units  for
$491,344.    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.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995

         The   foregoing  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:

<BULLET>  Market  and economic conditions which affect the  value
          of  the  properties the Partnership owns and  the  cash
          from rental income such properties generate;
       
<BULLET>  the  federal income tax consequences of rental  income,
          deductions,  gain  on  sales and other  items  and  the
          affects of these consequences for investors;
       
<BULLET>  resolution  by  the General Partners of conflicts  with
          which they may be confronted;
       
<BULLET>  the   success  of  the  General  Partners  of  locating
          properties with favorable risk return characteristics;
       
<BULLET>  the effect of tenant defaults; and
       
<BULLET>  the condition of the industries in which the tenants of
          properties owned by the Partnership operate.


                   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.

                   PART II - OTHER INFORMATION
                           (Continued)
                                
ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

          10.1  Assignment   of   the   Development
                Financing   Agreement   and   Net    Lease
                Agreement  dated August 27,  1998  between
                the  Partnership,  AEI  Real  Estate  Fund
                XVIII  Limited Partnership, AEI  Income  &
                Growth  Fund XXI Limited Partnership,  AEI
                Income   &   Growth  Fund   XXII   Limited
                Partnership,    and    Americana    Dining
                Corporation  relating to the  property  at
                7880     Washington     Village     Drive,
                Centerville, Ohio.

          10.2  Development   Financing   Agreement
                dated  June 29, 1998 between AEI Income  &
                Growth  Fund XXII Limited Partnership  and
                Americana  Dining Corporation relating  to
                the  property  at 7880 Washington  Village
                Drive, Centerville, Ohio.

          10.3  Net  Lease Agreement dated June  29,
                1998  between  AEI Income  &  Growth  Fund
                XXII  Limited  Partnership  and  Americana
                Dining   Corporation   relating   to   the
                property   at   7880  Washington   Village
                Drive, Centerville, Ohio.

          27    Financial Data Schedule  for  period
                ended September 30, 1998.

        b.  Reports   filed  on   Form   8-K   -
            During  the quarter ended September
            30, 1998, the Partnership filed  an
            8-K,   dated  September  15,  1998,
            reporting  the  acquisition  of   a
            Timber  Lodge Steakhouse restaurant
            in   Rochester,  Minnesota  and   a
            Champps  Americana  restaurant   in
            Troy, Michigan.


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


Dated:  November 9, 1998      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)