SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                           FORM 10-KSB
                                
             Annual Report Under Section 13 or 15(d)
             Of The Securities Exchange Act Of 1934
                                
          For the Fiscal Year Ended:  December 31, 1996
                                
                Commission file number:  0-18289
                                
             AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
         (Name of Small Business Issuer in its Charter)

      State of Minnesota                41-1622463
(State or other Jurisdiction of     (I.R.S. Employer)
Incorporation or Organization)     Identification No.)

  1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
            (Address of Principal Executive Offices)

                          (612) 227-7333
                   (Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Act:
                                 Name of each exchange on
     Title of each class             which registered
             None                          None

Securities registered pursuant to Section 12(g) of the Act:

                    Limited Partnership Units
                        (Title of class)
                                
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 past 12 months (or for such shorter period  that
the  registrant was required to file such reports), and  (2)  has
been subject to such filing requirements for the past 90 days.

                         Yes    [X]       No

Check if disclosure of delinquent filers in response to Rule  405
of  Regulation  S-B  is  not  contained  in  this  Form,  and  no
disclosure  will  be contained, to the best of  the  registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-KSB or  any
amendment to this Form 10-KSB. [X]

The Issuer's revenues for year ended December 31, 1996 were
$1,724,727.

As  of  February 28, 1997, there were 21,718.38 Units of  limited
partnership interest in the registrant outstanding and  owned  by
nonaffiliates  of  the registrant, which Units had  an  aggregate
market  value (based solely on the price at which they were  sold
since there is no ready market for such Units) of $21,718,380.

               DOCUMENTS INCORPORATED BY REFERENCE

 The registrant has not incorporated any documents by reference
                        into this report.
                                
         Transitional Small Business Disclosure Format:
                                
                         Yes        No    [X]


                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

        AEI  Real  Estate  Fund  XVIII Limited  Partnership  (the
"Partnership" or the "Registrant") is a limited partnership which
was  organized pursuant to the laws of the State of Minnesota  on
September  20,  1988.  The registrant is comprised  of  AEI  Fund
Management XVIII, Inc. (AFM) as Managing General Partner,  Robert
P.  Johnson as the Individual General Partner, and purchasers  of
partnership  units as Limited Partners.  The Partnership  offered
for  sale up to $30,000,000 of limited partnership interests (the
"Units")  (30,000  Units  at  $1,000  per  Unit)  pursuant  to  a
registration   statement  effective  December   5,   1988.    The
Partnership  commenced  operations  on  February  15,  1989  when
minimum   subscriptions  of  1,500  Limited   Partnership   Units
($1,500,000)   were   accepted.    The   Partnership's   offering
terminated  December  4, 1990 when the extended  offering  period
expired.   The  Partnership received subscriptions for  22,783.05
Limited Partnership Units ($22,783,050).

        The Partnership was organized to acquire, initially on  a
debt-free   basis,  existing  and  newly  constructed  commercial
properties located in the United States and Canada, to lease such
properties  to  tenants under triple net  leases,  to  hold  such
properties   and  to  eventually  sell  such  properties.    From
subscription  proceeds,  the  Partnership  purchased   twenty-one
properties,  including  partial  interests  in  five  properties,
totaling  $18,868,379.  The balance of the subscription  proceeds
was  applied  to  organization  and  syndication  costs,  working
capital reserves and distributions, which represented a return of
capital.   The  properties  are  all  commercial,  single  tenant
buildings leased under triple net leases.

       The Partnership will hold its properties until the General
Partners  determine  that the sale or other  disposition  of  the
properties   is   advantageous  in  view  of  the   Partnership's
investment  objectives.  In deciding whether to sell  properties,
the  General  Partners will consider factors  such  as  potential
appreciation,  net  cash flow and income tax considerations.   In
addition,  certain lessees have been granted options to  purchase
properties  after  a  specified portion of  the  lease  term  has
elapsed.   It is anticipated that the Partnership will  sell  its
properties  within twelve years after acquisition.  At  any  time
prior to selling the properties, the Partnership may mortgage one
or  more  of its properties in amounts not exceeding 50%  of  the
aggregate purchase price of all Partnership properties.

Leases

       Although there are variations in the specific terms of the
leases,  the following is a summary of the general terms  of  the
Partnership's  leases.   The properties  are  leased  to  various
tenants   under  noncancelable  triple  net  leases,  which   are
classified  as operating leases.  Under a triple net  lease,  the
lessee  is  responsible  for all real  estate  taxes,  insurance,
maintenance,  repairs and operating expenses  for  the  property.
The  initial  lease  terms are for 14 to 20  years.   The  leases
provide  for  base  annual rental payments,  payable  in  monthly
installments,  and  contain  rent  clauses  which   entitle   the
Partnership to receive additional rent in future years  based  on
stated  rent  increases  or if gross receipts  for  the  property
exceed certain specified amounts, among other conditions.

        The leases provide the lessee with two to three five-year
renewal options subject to the same terms and conditions  as  the
initial  lease.   Certain lessees have been  granted  options  to
purchase  the  property.  Depending on the  lease,  the  purchase
price is either determined by a formula, or is the greater of the
fair  market value of the property or the amount determined by  a
formula.  In all cases, if the option were to be exercised by the
lessee,  the  purchase price would be greater than  the  original
cost of the property.

ITEM 1.   DESCRIPTION OF BUSINESS. (Continued)

        The  Partnership  owns a 4.1022% interest  in  a  Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a  Sizzler
restaurant in Springboro, Ohio, and a 100% interest in a  Sizzler
restaurant   in  Fairfield,  Ohio.   In  November,  1993,   after
reviewing   the  lessee's  operating  results,  the   Partnership
determined  that  the  lessee would  be  unable  to  operate  the
restaurants  in  a manner capable of maximizing the  restaurants'
sales.   Consequently,  at the direction of  the  Partnership,  a
multi-unit   restaurant  operator  assumed   operation   of   the
restaurants while the Partnership reviewed the available options.
In  January,  1994  and  June, 1994, the Partnership  closed  the
restaurants  in  Cincinnati  and  Springboro,  respectively,  and
listed  them for sale or lease.  While the properties are vacant,
the  Partnership  is responsible for the real  estate  taxes  and
other costs required to maintain the properties.

       On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield  to  Fairfield Foods, Inc. (Fairfield)  under  a  Lease
Agreement  with  a  primary term of 20 years  and  annual  rental
payments based on a percentage of sales.  Fairfield was not  able
to  profitably operate the restaurant and closed the  restaurant.
The Partnership is reviewing the available options, which include
selling or re-leasing the property.

        On January 23, 1997, the Partnership sold its interest in
the  Cincinnati  restaurant  to an unrelated  third  party.   The
Partnership received net sales proceeds of approximately $19,900,
which resulted in a net loss of approximately $31,700, which  was
recognized as a real estate impairment in 1996.

        In  December,  1996, the Partnership, in order  to  avoid
additional  property  management expenses, decided  to  sell  the
Sizzler  properties in Springboro and Fairfield  rather  than  to
continue to attempt to re-lease the properties.  As a result, the
properties  have been reclassified on the balance sheet  to  Real
Estate  Held  for  Sale.  In addition, based on  an  analysis  of
market  conditions in the area, it was determined that a sale  of
the  properties  would  result in net proceeds  of  approximately
$800,000.   The  Partnership's share of  the  proceeds  would  be
approximately $773,000.  A charge to operations for  real  estate
impairment  of $1,645,600 was recognized, which is the difference
between  book  value at December 31, 1996 of $2,418,600  and  the
estimated  market  value of $773,000.  The  charge  was  recorded
against the cost of the land, building and equipment.

        In August, 1995, the lessee of the two Rally's properties
filed  for reorganization.  After reviewing the operating results
of  the lessee, the Partnership agreed to amend the Leases of the
two  properties.   Effective December 1,  1995,  the  Partnership
amended  the  Leases  to reduce the base rent  from  the  current
annual  rent of $47,498 and $48,392 to $15,000 for each property.
The Partnership could receive additional rent in the future equal
to  6.75%  of the amount by which gross receipts exceed $275,000.
In  1997, the Leases, as amended, were confirmed as part  of  the
reorganization  plan.  The lessee has agreed  to  pay  all  post-
petition  rents  due and the Partnership's related administrative
and  legal  expenses.  The Partnership is owed  $29,128  of  pre-
petition  rent,  which  was not accrued for  financial  reporting
purposes due to the uncertainty of collection.

        On  July  6,  1995,  the Partnership sold  the  Cheddar's
restaurant  in  Columbus, Ohio, to the lessee.   The  Partnership
received net sale proceeds of $1,259,320, which resulted in a net
gain  of  $105,291.  At the time of sale, the  cost  and  related
accumulated    depreciation   was   $1,306,191   and    $152,162,
respectively.

        On September 1, 1995, the Partnership sold the Applebee's
restaurant in Memphis, Tennessee, to the lessee.  The Partnership
received net sale proceeds of $1,444,822, which resulted in a net
gain  of  $465,562.  At the time of sale, the  cost  and  related
accumulated    depreciation   was   $1,126,919   and    $147,659,
respectively.

ITEM 1.   DESCRIPTION OF BUSINESS. (Continued)

       The Partnership used the majority of the proceeds from the
two property sales in 1995 to purchase two properties in 1996, as
discussed below.  The remainder of the proceeds from these  sales
were distributed to the Partners in 1995 and 1996.

        On  April  10, 1996, the Partnership purchased  an  85.0%
interest  in  a Tractor Supply Company in Bristol,  Virginia  for
$1,094,367.   The  property is leased to Tractor  Supply  Company
under  a  Lease  Agreement with a primary term of  14  years  and
annual  rental payments of $116,686.  The remaining  interest  in
the  property was purchased by the Individual General Partner  of
the Partnership.

        On  August  29, 1996, the Partnership purchased  a  32.2%
interest in a Champps Americana restaurant in Columbus, Ohio  for
$826,070.  The property is leased to Americana Dining Corporation
under  a  Lease  Agreement with a primary term of  20  years  and
annual rental payments of $90,834.  The remaining interest in the
property  was purchased by AEI Income & Growth Fund  XXI  Limited
Partnership, an affiliate of the Partnership.

        On  May  10,  1996, the Partnership sold the Taco  Cabana
restaurant  in New Braunfels, Texas to an unrelated third  party.
The  Partnership  received net sale proceeds of  $962,298,  which
resulted  in  a net gain of $254,305.  At the time of  sale,  the
cost  and  related accumulated depreciation of the  property  was
$784,045 and $76,052, respectively.

        Through  December 31, 1996, the Partnership sold 30.7627%
of the Applebee's restaurant in Destin, Florida in three separate
transactions   to  unrelated  third  parties.   The   Partnership
received total net sale proceeds of $471,191 which resulted in  a
total   net  gain  of  $161,208.   The  total  cost  and  related
accumulated  depreciation of the interests sold was $344,167  and
$34,184, respectively.  For the year ended December 31, 1996, the
net gain was $124,583.

        On  March  10,  1997, the Partnership sold an  additional
15.6446% interest in the Applebee's restaurant in Destin, Florida
to  an unrelated third party.  The Partnership received net  sale
proceeds  of approximately $225,000 which resulted in a net  gain
of approximately $71,000.

        Through  December 31, 1996, the Partnership sold 37.6757%
of  a  Taco  Cabana  restaurant in San Antonio,  Texas  in  three
separate   transactions   to  unrelated   third   parties.    The
Partnership  received total net sale proceeds of  $607,835  which
resulted  in  a total net gain of $206,757.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$433,992  and $32,914, respectively.  For the year ended December
31, 1996, the net gain was $206,757.

        On  February 28, 1997, the Partnership sold an additional
11.5896%  interest in the Taco Cabana restaurant in San  Antonio,
Texas to an unrelated third party.  The Partnership received  net
sale  proceeds of approximately $187,000 which resulted in a  net
gain of approximately $64,000.

        Through  December 31, 1996, the Partnership sold 18.3278%
of  the  Tractor  Supply  Company in  Bristol,  Virginia  in  two
separate   transactions   to  unrelated   third   parties.    The
Partnership  received total net sale proceeds of  $271,085  which
resulted  in  a  total net gain of $37,784.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$235,969  and $2,668, respectively.  For the year ended  December
31, 1996, the net gain was $37,784.

ITEM 1.   DESCRIPTION OF BUSINESS. (Continued)

        Subsequent to December 31, 1996, the Partnership sold  an
additional  14.4585% interest in the Tractor  Supply  Company  in
Bristol, Virginia in two separate transactions to unrelated third
parties.    The  Partnership  received  net  sale   proceeds   of
approximately  $218,000  which  resulted  in  a   net   gain   of
approximately $36,000.

       On March 10, 1997, the Partnership sold a 7.0899% interest
in  the  Champps  Americana restaurant in Columbus,  Ohio  to  an
unrelated  third  party.   The  Partnership  received  net   sale
proceeds  of approximately $214,000 which resulted in a net  gain
of approximately $34,000.

        Pursuant to the Partnership Agreement, net sale  proceeds
may  be  reinvested in additional properties until  a  date  five
years  after  the date on which the offer and sale  of  Units  is
terminated.   This  period  expired  on  December  4,  1995.   In
December,  1996,  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 sale proceeds from the Taco Cabana restaurants,
Tractor   Supply  Company  and  subsequent  property   sales   in
additional  properties.  The Amendment passed with a majority  of
Units voting in favor of the Amendment.

Major Tenants

        During  1996,  three  of the Partnership's  lessees  each
contributed  more  than  ten percent of the  Partnership's  total
rental  revenue.  The major tenants in aggregate contributed  68%
of  the  Partnership's  total rental  revenue  in  1996.   It  is
anticipated  that, based on the minimum rental payments  required
under  the  leases, each major tenant will continue to contribute
more  than ten percent of the Partnership's total rental  revenue
in  1997  and future years.  In addition, four business concepts,
Children's  World Learning Centers, Taco Cabana,  Applebee's  and
Cheddar's  restaurants, each accounted for more than ten  percent
of  the  Partnership's total rental revenue during 1996.   It  is
anticipated that these business concepts will continue to account
for  more  than  ten  percent of the Partnership's  total  rental
revenue  in  1996 and future years.  Any failure of  these  major
tenants   or  business  concepts  could  materially  affect   the
Partnership's net income and cash distributions.

Competition

        The  Partnership is a minor factor in the commercial real
estate  business.   There are numerous entities  engaged  in  the
commercial  real  estate  business which have  greater  financial
resources  than  the  Partnership.  At the time  the  Partnership
elects to dispose of its properties, the Partnership will  be  in
competition  with other persons and entities to find  buyers  for
its properties.

Employees

        The  Partnership  has  no direct  employees.   Management
services   are  performed  for  the  Partnership  by   AEI   Fund
Management, Inc., an affiliate of AFM.

ITEM 2.   DESCRIPTION OF PROPERTIES.

Investment Objectives

        The  Partnership's investment objectives were to  acquire
existing or newly-developed commercial properties throughout  the
United  States  and  Canada  that offer  the  potential  for  (i)
preservation  and protection of the Partnership's  capital;  (ii)
partially  tax-deferred cash distributions from operations  which
may  increase through rent participation clauses or mandated rent
increases; and (iii) long-term capital gains through appreciation
in value of the Partnership's properties realized upon sale.  The
Partnership  does not have a policy, and there is no  limitation,
as to the amount or percentage of assets that may be invested  in
any  one  property.  However, to the extent possible, the General
Partners  attempt  to  diversify the type  and  location  of  the
Partnership's properties.

Description of Properties

        The  Partnership's properties are all commercial,  single
tenant  buildings.  All the properties were acquired on  a  debt-
free  basis and are leased to various tenants under noncancelable
triple net leases, which are classified as operating leases.  The
Partnership  holds  an  undivided  fee  simple  interest  in  the
properties.   At  any time prior to selling the  properties,  the
Partnership may mortgage one or more of its properties in amounts
not  exceeding  50%  of  the  aggregate  purchase  price  of  all
Partnership properties.

        The  Partnership's properties are subject to the  general
competitive conditions incident to the ownership of single tenant
investment  real estate.  Since each property is leased  under  a
long-term   lease,   there  is  little  competition   until   the
Partnership  decides to sell the property.   At  this  time,  the
Partnership will be competing with other real estate  owners,  on
both a national and local level, in attempting to find buyers for
the   properties.   In  the  event  of  a  tenant  default,   the
Partnership would be competing with other real estate owners, who
have  property vacancies, to attract a new tenant  to  lease  the
property.   The Partnership's tenants operate in industries  that
are  very  competitive and can be affected  by  factors  such  as
changes  in regional or local economies, seasonality and  changes
in consumer preference.

        The  following table is a summary of the properties  that
the Partnership acquired and owned as of December 31, 1996.

<TABLE>
<C>                   <S>          <S>          <S>             <S>            <S>     
                                     Total Property
                         Purchase     Acquisition                Annual Lease   Annual Rent
Property                   Date          Costs        Lessee        Payment     Per Sq. Ft.

Children's World                                 Children's World
Daycare Center                                       Learning
 Phoenix, AZ             9/29/89     $  883,486    Centers, Inc.    $110,563     $14.62

Sizzler Restaurant
 Cincinnati, OH
 (4.1022%)               1/30/90     $   66,093        (F2)

Pasta Fair Restaurant                               Pasta Fair of
 Belleview, FL           4/11/90     $  932,862     Belleview, Inc. $ 60,000     $ 9.84

Children's World                                   Children's World
Daycare Center                                         Learning
 Blue Springs, MO        6/27/90     $  791,271    Centers, Inc.    $ 93,923     $11.74

Sizzler Restaurant
 Springboro, OH
 (93.2478%)              8/24/90     $1,310,561        (F1)

Children's World                                   Children's World
Daycare Center                                        Learning 
 Lenexa, KS              9/13/90     $  983,527     Centers, Inc.   $117,425     $14.65

Taco Cabana Restaurant                               Texas Taco
 San Antonio, TX        12/29/90     $1,406,426      Cabana L.P.    $191,076     $69.79

Cheddar's Restaurant                                  Heartland
 Clive, IA               1/22/91     $1,392,248    Restaurant Corp. $194,978     $27.08

Sizzler Restaurant
 Fairfield, OH           3/29/91     $1,608,265         (F1)

Children's World                                   Children's World
Daycare Center                                         Learning 
 Westerville, OH         6/21/91     $  990,261      Centers Inc.   $116,194     $14.56

Taco Cabana Restaurant
 San Antonio, TX                                      Texas Taco
 (62.3243%)              7/19/91     $  717,924       Cabana L.P.   $ 99,657     $35.73

Taco Cabana Restaurant                                  Red Line
 Brownsville, TX          8/9/91     $  799,938      Taco One, Ltd. $113,769     $42.14

Applebee's Restaurant
 Destin, FL
 (69.2373%)              11/1/91     $  774,613      T.S.S.O., Inc. $ 99,311     $29.81

Children's World                                   Children's World
Daycare Center                                         Learning 
 Columbus, OH            8/10/92     $1,019,202      Centers Inc.   $110,454     $12.50

Rally's Restaurant                                  Red Line San
    San Antonio, TX      12/7/92     $  303,640   Antonio One, LTD  $ 15,000     $25.51

Rally's Restaurant                                   Red Line San
 San Antonio, TX         12/7/92     $  308,997   Antonio One, LTD  $ 15,000     $25.51

Applebee's Restaurant                            Southland Restaurant
 Slidell, LA                                          Development
 (27%)                    5/5/93     $  280,018     Company, L.L.C. $ 39,769     $32.15

HomeTown Buffet Restaurant
 Tucson, AZ                                            JB's
 (24%)                   6/16/93     $  303,733  Restaurants, Inc.  $ 40,957     $17.75

Tractor Supply Company Store
 Bristol, Virginia                                  Tractor Supply
 (66.6722%)              4/10/96     $  858,399        Company      $ 91,526     $ 8.87

Champps Restaurant                                   Americana
 Columbus, Ohio                                       Dining
 (32.20%)                8/29/96     $  826,070     Corporation     $ 90,834     $34.53


<F1> The property is vacant and listed for sale.
<F2> Property held for sale was sold on January 23, 1997.
</TABLE>

        The  properties  listed above with  a  partial  ownership
percentage  are  owned with affiliates of the Partnership  and/or
unrelated  third  parties.   AEI Real Estate  Fund  86-A  Limited
Partnership owns the remaining interest in the Sizzler restaurant
in  Springboro, Ohio.  AEI Real Estate Funds XVI and XVII Limited
Partnerships   own  the  remaining  interests  in   the   Sizzler
restaurant in Cincinnati, Ohio.  AEI Real Estate Fund XVI Limited
Partnership  owns  the  remaining  interest  in  the   Applebee's
restaurant in Slidell, Louisiana.  AEI Net Lease Income &  Growth
Fund XIX Limited Partnership and AEI Institutional Net Lease Fund
'93 own the remaining interests in the HomeTown Buffet restaurant
in  Tucson,  Arizona.   AEI  Income &  Growth  Fund  XXI  Limited
Partnership owns the remaining interest in the Champps restaurant
in  Columbus,  Ohio.   The  Individual  General  Partner  of  the
Partnership  and  unrelated  third  parties  own  the   remaining
interests  in  the  Tractor Supply Company in Bristol,  Virginia.
The  remaining interests in the Taco Cabana in San Antonio, Texas
and  the  Applebee's  in Destin, Florida are owned  by  unrelated
third parties.

        For  properties  owned with affiliates, each  Partnership
owns  a  separate,  undivided interest  in  the  properties.   No
specific  agreement or commitment exists between the Partnerships
as  to  the  management  of  their respective  interests  in  the
properties,  and  the  Partnership that holds  more  than  a  50%
interest  does not control decisions over the other Partnership's
interest.

        The  initial Lease terms are for 20 years except for  the
Taco Cabana restaurants located in San Antonio and New Braunfels,
Texas,  the Rally's restaurants, and the Children's World daycare
centers,  which  have  Lease terms of 15 years  and  the  Tractor
Supply  Company, which has a lease term of 14 years.  The  Leases
have  renewal  options  which  may  extend  the  Lease  term   an
additional  10 years, except for the Champps, Slidell  Applebee's
and  the Rally's restaurants which have renewal options that  may
extend the Lease term an additional 15 years.

       Pursuant to the Lease Agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they  occupy.   The General Partners believe the  properties  are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.

ITEM 2.   DESCRIPTION OF PROPERTIES. (Continued)

         For  tax  purposes,  the  Partnership's  properties  are
depreciated  under the Modified Accelerated Cost Recovery  System
(MACRS).  The largest depreciable component of a property is  the
building  which  is depreciated, using the straight-line  method,
over  31.5  years or 39 years depending on the date when  it  was
placed  in  service.  The remaining depreciable components  of  a
property  are personal property and land improvements  which  are
depreciated,  using an accelerated method, over 5 and  15  years,
respectively.  Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6)  of  the
Internal  Revenue  Code  which  requires  a  percentage  of   the
properties' depreciable components to be depreciated over  longer
lives using the straight-line method.  In general the federal tax
basis of the properties for tax depreciation purposes is the same
as the basis for book depreciation purposes.

        During the last five years, or since the date of purchase
if  purchased  after December 31, 1991, all properties  were  100
percent occupied by the lessees noted, with the exception of  the
three  Sizzler properties, which were 100 percent occupied  until
January,  1994 for the Cincinnati location, June,  1994  for  the
Springboro   location  and  December,  1994  for  the   Fairfield
location, and have been vacant since those dates.

ITEM 3.  LEGAL PROCEEDINGS.

         None.

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

        In December, 1996, the Managing General Partner solicited
by  mail a proxy statement to propose an Amendment to the Limited
Partnership  Agreement  that  would  allow  the  Partnership   to
reinvest   the  majority  of  net  sale  proceeds  in  additional
properties.  In order for the proposed Amendment to be adopted, a
majority  of  the Units must be voted in favor of the  Amendment.
Of  the 21,764 outstanding Units, 11,510 voted for the Amendment,
5,677  voted  against  the Amendment and  727  abstained.   As  a
result, the Amendment was adopted.


                             PART II

ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
        RELATED SECURITY HOLDER MATTERS.

        As  of  December  31, 1996, there were 1,619  holders  of
record  of the registrant's Limited Partnership Units.  There  is
no  other  class  of  security outstanding  or  authorized.   The
registrant's  Units  are  not a traded security  in  any  market.
However, the Partnership may purchase 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 total number  of  Units
outstanding at the beginning of the year.  In no event shall  the
Partnership  be  obligated to purchase  Units  if,  in  the  sole
discretion  of the Managing General Partner, such purchase  would
impair the capital or operation of the Partnership.

        During 1996, fifteen Limited Partners redeemed a total of
313.42  Partnership  Units for $233,227 in  accordance  with  the
Partnership  Agreement.  In prior years,  a  total  of  forty-six
Limited  Partners redeemed 705 Partnership Units for $602,632  in
accordance  with  the  Partnership  Agreement.   The  redemptions
increase  the remaining Limited Partners' ownership  interest  in
the Partnership.

ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
        RELATED SECURITY HOLDER MATTERS.  (Continued)

       Cash distributions of $15,703 and $19,212 were made to the
General Partners and $1,321,421 and $1,782,761 were made  to  the
Limited   Partners   in   1996  and  1995,   respectively.    The
distributions  were made on a quarterly basis and  represent  Net
Cash   Flow,  as  defined,  except  as  discussed  below.   These
distributions  should  not be compared  with  dividends  paid  on
capital stock by corporations.

        As  part  of the Limited Partner distributions  discussed
above,  the  Partnership  distributed $368,643  and  $684,111  of
proceeds from property sales in 1996 and 1995, respectively.  The
distributions  reduced  the  Limited Partners'  Adjusted  Capital
Contributions.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.

Results of Operations

        For  the  years  ended December 31, 1996  and  1995,  the
Partnership   recognized   rental  income   of   $1,621,285   and
$1,802,007,   respectively.  During   the   same   periods,   the
Partnership  earned  investment income of $103,442  and  $55,768,
respectively.   In  1996, rental income  decreased  mainly  as  a
result  of  the  property sales and Rally's  situation  discussed
below.   The  decrease in rental income was partially  offset  by
rental income received from two subsequent property acquisitions,
rent  increases  on  eleven properties and additional  investment
income earned on the net proceeds from the property sales.

        The  Partnership  owns a 4.1022% interest  in  a  Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a  Sizzler
restaurant in Springboro, Ohio, and a 100% interest in a  Sizzler
restaurant   in  Fairfield,  Ohio.   In  November,  1993,   after
reviewing   the  lessee's  operating  results,  the   Partnership
determined  that  the  lessee would  be  unable  to  operate  the
restaurants  in  a manner capable of maximizing the  restaurants'
sales.   Consequently,  at the direction of  the  Partnership,  a
multi-unit   restaurant  operator  assumed   operation   of   the
restaurants while the Partnership reviewed the available options.
In  January,  1994  and  June, 1994, the Partnership  closed  the
restaurants  in  Cincinnati  and  Springboro,  respectively,  and
listed  them for sale or lease.  While the properties are vacant,
the  Partnership  is responsible for the real  estate  taxes  and
other costs required to maintain the properties.  At December 31,
1996,  these properties were classified on the balance  sheet  as
Real Estate Held for Sale.

       On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield  to  Fairfield Foods, Inc. (Fairfield)  under  a  Lease
Agreement  with  a  primary term of 20 years  and  annual  rental
payments based on a percentage of sales.  Fairfield was not  able
to  profitably operate the restaurant and closed the  restaurant.
The Partnership is reviewing the available options, which include
selling or re-leasing the property.

        No  rents were collected from the Sizzler restaurants  in
1996  and 1995.  The total amount of rent not collected  in  1996
and  1995 was $396,541 and $384,991, respectively, for the  three
properties.   These  amounts  were  not  accrued  for   financial
reporting purposes.

        On January 23, 1997, the Partnership sold its interest in
the  Cincinnati  restaurant  to an unrelated  third  party.   The
Partnership received net sales proceeds of approximately $19,900,
which resulted in a net loss of approximately $31,700, which  was
recognized as a real estate impairment in 1996.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        In  December,  1996, the Partnership, in order  to  avoid
additional  property  management expenses, decided  to  sell  the
Sizzler  properties in Springboro and Fairfield  rather  than  to
continue to attempt to re-lease the properties.  As a result, the
properties  have been reclassified on the balance sheet  to  Real
Estate  Held  for  Sale.  In addition, based on  an  analysis  of
market  conditions in the area, it was determined that a sale  of
the  properties  would  result in net proceeds  of  approximately
$800,000.   The  Partnership's share of  the  proceeds  would  be
approximately $773,000.  A charge to operations for  real  estate
impairment  of $1,645,600 was recognized, which is the difference
between  book  value at December 31, 1996 of $2,427,600  and  the
estimated  market  value of $773,000.  The  charge  was  recorded
against the cost of the land, building and equipment.

        In August, 1995, the lessee of the two Rally's properties
filed  for reorganization.  After reviewing the operating results
of  the lessee, the Partnership agreed to amend the Leases of the
two  properties.   Effective December 1,  1995,  the  Partnership
amended  the  Leases  to reduce the base rent  from  the  current
annual  rent of $47,498 and $48,392 to $15,000 for each property.
The Partnership could receive additional rent in the future equal
to  6.75%  of the amount by which gross receipts exceed $275,000.
In  1997, the Leases, as amended, were confirmed as part  of  the
reorganization  plan.  The lessee has agreed  to  pay  all  post-
petition  rents  due and the Partnership's related administrative
and  legal  expenses.  The Partnership is owed  $29,128  of  pre-
petition  rent,  which  was not accrued for  financial  reporting
purposes due to the uncertainty of collection.

        In  February, 1996, the Partnership called  a  letter  of
credit  for  $109,393  related to the Taco Cabana  restaurant  in
Brownsville, Texas.  The Partnership applied the funds to satisfy
rents  and real estate taxes due.  In 1997, the Partnership  took
possession  of  the property and has listed it for  sale  or  re-
lease.   While  the  property is being  sold  or  re-leased,  the
Partnership  has  assumed the responsibilities  for  real  estate
taxes and other costs required to maintain the property.

        During  the years ended December 31, 1996 and  1995,  the
Partnership   paid   Partnership   administration   expenses   to
affiliated parties of $247,414 and $251,309, 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  $190,019 and $81,777, 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 1996, when compared to 1995, is the  result
of  expenses  incurred in 1996 related to the  Sizzler  situation
discussed above.

       As of December 31, 1996, the Partnership's annualized cash
distribution  rate  was  6.0%,  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
were  allocated  to  Limited  Partners  and  1%  to  the  General
Partners.

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

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

Liquidity and Capital Resources

        During  1996,  the Partnership's cash balances  increased
$26,952.   Net income before depreciation, real estate impairment
and  gain  on sale decreased by approximately $224,000  in  1996,
when  compared to the same period in 1995.  This  was  due  to  a
decrease  in revenues as a result of the property sales discussed
below  and  an  increase in expenses in 1996.  This decrease  was
partially  offset by net timing differences in the collection  of
payments from the lessees and the payment of expenses so that net
cash  provided by operating activities decreased by only  $46,256
from 1995 to 1996.

        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.  In 1996 and 1995, the Partnership
generated  cash flow from the sale of real estate,  as  discussed
below,  of  $2,201,332 and $2,704,142, respectively.  During  the
same  periods,  the Partnership expended $1,911,639  and  $8,798,
respectively,   to  invest  in  real  properties  (inclusive   of
acquisition  expenses)  as the Partnership  reinvested  the  cash
generated from the property sales.

        On  July  6,  1995,  the Partnership sold  the  Cheddar's
restaurant  in  Columbus, Ohio, to the lessee.   The  Partnership
received net sale proceeds of $1,259,320, which resulted in a net
gain  of  $105,291.  At the time of sale, the  cost  and  related
accumulated    depreciation   was   $1,306,191   and    $152,162,
respectively.

        On September 1, 1995, the Partnership sold the Applebee's
restaurant in Memphis, Tennessee, to the lessee.  The Partnership
received net sale proceeds of $1,444,822, which resulted in a net
gain  of  $465,562.  At the time of sale, the  cost  and  related
accumulated    depreciation   was   $1,126,919   and    $147,659,
respectively.

       The Partnership used the majority of the proceeds from the
two property sales in 1995 to purchase two properties in 1996, as
discussed below.  The remainder of the proceeds from these  sales
were distributed to the Partners in 1995 and 1996.

        On  April  10, 1996, the Partnership purchased  an  85.0%
interest  in  a Tractor  Supply  Company   in  Bristol,  Virginia
for $1,094,367.  The property is leased to Tractor Supply Company
under  a  Lease  Agreement with a primary term of  14  years  and
annual  rental payments of $116,686.  The remaining  interest  in
the  property was purchased by the Individual General Partner  of
the Partnership.

        On  August  29, 1996, the Partnership purchased  a  32.2%
interest in a Champps Americana restaurant in Columbus, Ohio  for
$826,070.  The property is leased to Americana Dining Corporation
under  a  Lease  Agreement with a primary term of  20  years  and
annual rental payments of $90,834.  The remaining interest in the
property  was purchased by AEI Income & Growth Fund  XXI  Limited
Partnership, an affiliate of the Partnership.

        On  May  10,  1996, the Partnership sold the Taco  Cabana
restaurant  in New Braunfels, Texas to an unrelated third  party.
The  Partnership  received net sale proceeds of  $962,298,  which
resulted  in  a net gain of $254,305.  At the time of  sale,  the
cost  and  related accumulated depreciation of the  property  was
$784,045 and $76,052, respectively.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        Through  December 31, 1996, the Partnership sold 30.7627%
of the Applebee's restaurant in Destin, Florida in three separate
transactions   to  unrelated  third  parties.   The   Partnership
received total net sale proceeds of $471,191 which resulted in  a
total   net  gain  of  $161,208.   The  total  cost  and  related
accumulated  depreciation of the interests sold was $344,167  and
$34,184, respectively.  For the year ended December 31, 1996, the
net gain was $124,583.

        On  March  10,  1997, the Partnership sold an  additional
15.6446% interest in the Applebee's restaurant in Destin, Florida
to  an unrelated third party.  The Partnership received net  sale
proceeds  of approximately $225,000 which resulted in a net  gain
of approximately $71,000.

        Through  December 31, 1996, the Partnership sold 37.6757%
of  a  Taco  Cabana  restaurant in San Antonio,  Texas  in  three
separate   transactions   to  unrelated   third   parties.    The
Partnership  received total net sale proceeds of  $607,835  which
resulted  in  a total net gain of $206,757.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$433,992  and $32,914, respectively.  For the year ended December
31, 1996, the net gain was $206,757.

        On  February 28, 1997, the Partnership sold an additional
11.5896%  interest in the Taco Cabana restaurant in San  Antonio,
Texas to an unrelated third party.  The Partnership received  net
sale  proceeds of approximately $187,000 which resulted in a  net
gain of approximately $64,000.

        Through  December 31, 1996, the Partnership sold 18.3278%
of  the  Tractor  Supply  Company in  Bristol,  Virginia  in  two
separate   transactions   to  unrelated   third   parties.    The
Partnership  received total net sale proceeds of  $271,085  which
resulted  in  a  total net gain of $37,784.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$235,969  and $2,668, respectively.  For the year ended  December
31, 1996, the net gain was $37,784.

        Subsequent to December 31, 1996, the Partnership sold  an
additional  14.4585% interest in the Tractor  Supply  Company  in
Bristol, Virginia in two separate transactions to unrelated third
parties.    The  Partnership  received  net  sale   proceeds   of
approximately  $218,000  which  resulted  in  a   net   gain   of
approximately $36,000.

       On March 10, 1997, the Partnership sold a 7.0899% interest
in  the  Champps  Americana restaurant in Columbus,  Ohio  to  an
unrelated  third  party.   The  Partnership  received  net   sale
proceeds  of approximately $214,000 which resulted in a net  gain
of approximately $34,000.

        Pursuant to the Partnership Agreement, net sale  proceeds
may  be  reinvested in additional properties until  a  date  five
years  after  the date on which the offer and sale  of  Units  is
terminated.   This  period  expired  on  December  4,  1995.   In
December,  1996,  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 sale proceeds from the Taco Cabana restaurants,
Tractor   Supply  Company  and  subsequent  property   sales   in
additional  properties.  The Amendment passed with a majority  of
Units voting in favor of the Amendment.

       During 1996 and 1995, the Partnership distributed $372,366
and  $691,021 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 $16.85 and $30.90 per  Limited
Partnership Unit, respectively.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

       The Partnership's primary use of cash flow is distribution
and  redemption  payments to Partners.  The Partnership  declares
its  regular  quarterly  distributions before  the  end  of  each
quarter and pays the distribution in the first week after the end
of  each quarter.  The Partnership attempts to maintain a  stable
distribution  rate from quarter to quarter.  Redemption  payments
are  paid  to  redeeming Partners in the fourth quarter  of  each
year.   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.  In 1995, the Partnership
made   distributions   at  an  8.0%  rate   which   resulted   in
distributions  of  $1,800,768.  Effective January  1,  1996,  the
distribution  rate  was  reduced  to  6.0%  which   resulted   in
distributions of $1,334,769 for 1996.

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

        During 1996, fifteen Limited Partners redeemed a total of
313.42  Partnership  Units for $233,227 in  accordance  with  the
Partnership  Agreement.   The Partnership  acquired  these  Units
using Net Cash Flow from operations.  In prior years, a total  of
forty-six  Limited  Partners redeemed 705 Partnership  Units  for
$602,632.    The  redemptions  increase  the  remaining   Limited
Partners' ownership interest in the Partnership.

       In September, 1994, the Partnership established a $150,000
unsecured  line  of credit at Fidelity Bank of Edina,  Minnesota.
On January 5, 1995, the line of credit was increased to $300,000.
The  line  of  credit bears interest at the prime rate  plus  one
percent  on the outstanding balance, which is due on demand,  but
in  any  event no later than January 5, 1996.  The line of credit
was  established  to provide short-term financing  to  cover  any
temporary  cash deficits.  In January, 1996, the line  of  credit
expired.  In 1995, interest expense related to the line of credit
was $6,115.

       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.

ITEM 7.   FINANCIAL STATEMENTS.

       See accompanying index to financial statements.
                                
                                
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP

                  INDEX TO FINANCIAL STATEMENTS




Independent Auditor's Report

Balance Sheet as of December 31, 1996 and 1995

Statements for the Years Ended December 31, 1996 and 1995:

     Operations

     Cash Flows

     Changes in Partners' Capital

Notes to Financial Statements

                                
                                
                  INDEPENDENT AUDITOR'S REPORT





To the Partners:
AEI Real Estate Fund XVIII Limited Partnership
St. Paul, Minnesota





      We  have audited the accompanying balance sheet of AEI REAL
ESTATE  FUND  XVIII  LIMITED  PARTNERSHIP  (a  Minnesota  limited
partnership)  as  of December 31, 1996 and 1995 and  the  related
statements  of  operations, cash flows and changes  in  partners'
capital for the years then ended.  These financial statements are
the   responsibility  of  the  Partnership's   management.    Our
responsibility  is  to  express an  opinion  on  these  financial
statements based on our audits.

      We  conducted  our  audits  in  accordance  with  generally
accepted  auditing standards.  Those standards  require  that  we
plan  and perform the audit to obtain reasonable assurance  about
whether   the   financial  statements  are   free   of   material
misstatement.   An  audit includes examining, on  a  test  basis,
evidence  supporting the amounts and disclosures in the financial
statements.   An  audit  also includes assessing  the  accounting
principles used and significant estimates made by management,  as
well  as evaluating the overall financial statement presentation.
We  believe  that our audits provide a reasonable basis  for  our
opinion.

      In  our opinion, the financial statements referred to above
present  fairly, in all material respects, the financial position
of  AEI Real Estate Fund XVIII Limited Partnership as of December
31,  1996 and 1995 and the results of its operations and its cash
flows  for  the  years then ended, in conformity  with  generally
accepted accounting principles.







Minneapolis, Minnesota         /s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
January 31, 1997                   Certified Public Accountants


<PAGE>                                
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                          BALANCE SHEET
                                
                           DECEMBER 31
                                
                             ASSETS
                                
                                                         1996          1995
CURRENT ASSETS:
  Cash and Cash Equivalents                         $ 2,359,926    $ 2,332,974
  Receivables                                            12,870         43,389
                                                     -----------    -----------
      Total Current Assets                            2,372,796      2,376,363
                                                     -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                                4,374,569      5,370,160
  Buildings and Equipment                             9,198,045     11,065,109
  Property Acquisition Costs                                  0          8,798
  Accumulated Depreciation                           (1,706,567)    (1,932,655)
                                                     -----------    -----------
                                                     11,866,047     14,511,412
  Real Estate Held for Sale                             792,877              0
                                                     -----------    -----------
         Net Investments in Real Estate              12,658,924     14,511,412
                                                     -----------    -----------
           Total Assets                             $15,031,720    $16,887,775
                                                     ===========    ===========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.              $   121,697    $    49,968
  Distributions Payable                                 323,784        406,381
  Security Deposit                                          665              0
  Unearned Rent                                           5,000          5,000
                                                     -----------    -----------
      Total Current Liabilities                         451,146        461,349
                                                     -----------    -----------

MINORITY INTEREST                                             0         76,319

PARTNERS' CAPITAL (DEFICIT):
  General Partners                                      (49,658)       (29,971)
  Limited Partners, $1,000 Unit Value;
   30,000 Units authorized; 22,783 Issued;
   21,764 and 22,078 outstanding in 1996
   and 1995, respectively                            14,630,232     16,380,078
                                                     -----------    -----------
      Total Partners' Capital                        14,580,574     16,350,107
                                                     -----------    -----------
        Total Liabilities and Partners' Capital     $15,031,720    $16,887,775
                                                     ===========    ===========

 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                     STATEMENT OF OPERATIONS
                                
                 FOR THE YEARS ENDED DECEMBER 3l


                                                       1996            1995

INCOME:
  Rent                                             $ 1,621,285     $ 1,802,007
  Investment Income                                    103,442          55,768
                                                    -----------     -----------
      Total Income                                   1,724,727       1,857,775
                                                    -----------     -----------

EXPENSES:
  Partnership Administration - Affiliates              247,414         251,309
  Partnership Administration and Property
     Management - Unrelated Parties                    190,019          81,777
  Interest                                                   0           6,115
  Depreciation                                         423,605         445,648
  Real Estate Impairment                             1,686,300               0
                                                    -----------     -----------
      Total Expenses                                 2,547,338         784,849
                                                    -----------     -----------

OPERATING INCOME (LOSS)                               (822,611)      1,072,926

GAIN ON SALE OF REAL ESTATE                            623,429         570,853

MINORITY INTEREST IN OPERATING INCOME                        0          (7,760)
                                                    -----------     -----------

NET INCOME (LOSS)                                  $  (199,182)    $ 1,636,019
                                                    ===========     ===========

NET INCOME (LOSS) ALLOCATED:
  General Partners                                 $    (3,984)    $    16,360
  Limited Partners                                    (195,198)      1,619,659
                                                    -----------     -----------
                                                   $  (199,182)    $ 1,636,019
                                                    ===========     ===========

NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT
(21,999 and 22,194 weighted average Units outstanding
  in 1996 and 1995, respectively)                  $     (8.87)    $     72.98
                                                    ===========     ===========


 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                     STATEMENT OF CASH FLOWS
                                
                 FOR THE YEARS ENDED DECEMBER 3l

                                                         1996         1995
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income (Loss)                                  $  (199,182)  $ 1,636,019

 Adjustments To Reconcile Net Income (Loss)
 To Net Cash Provided By Operating Activities:
     Depreciation                                       423,605       445,648
     Real Estate Impairment                           1,686,300             0
     Gain on Sale of Real Estate                       (623,429)     (570,853)
     (Increase) Decrease in Receivables                  30,519       (23,162)
     Increase in Payable to AEI Fund Management, Inc.    71,729           535
     Increase (Decrease) in Security Deposit                665       (50,000)
     Minority Interest                                        0        (1,724)
                                                     -----------   -----------
       Total Adjustments                              1,589,389      (199,556)
                                                     -----------   -----------
       Net Cash Provided By
           Operating Activities                       1,390,207     1,436,463
                                                     -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Investments in Real Estate                         (1,911,639)       (8,798)
  Proceeds from Sale of Real Estate                   2,201,332     2,704,142
                                                     -----------   -----------
       Net Cash Provided By
           Investing Activities                         289,693     2,695,344
                                                     -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase  (Decrease) in Distributions Payable        (82,597)       18,906
   Distributions to Partners                         (1,334,769)   (1,800,768)
   Redemption Payments                                 (235,582)     (120,440)
                                                     -----------   -----------
       Net Cash Used For
           Financing Activities                      (1,652,948)   (1,902,302)
                                                     -----------   -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                26,952     2,229,505

CASH AND CASH EQUIVALENTS, beginning of period        2,332,974       103,469
                                                     -----------   -----------
CASH AND CASH EQUIVALENTS, end of period            $ 2,359,926   $ 2,332,974
                                                     ===========   ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest Paid During the Year                     $         0   $     6,115
                                                     ===========   ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:
  Reclassification of minority interest and
  investments in real estate due to use of
  the proportionate consolidation method            $    76,319   $         0
                                                     ===========   ===========

 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>                                
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
            STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                
                 FOR THE YEARS ENDED DECEMBER 3l


                                                                     Limited
                                                                   Partnership
                               General     Limited                    Units
                               Partners    Partners     Total      Outstanding


BALANCE, December 31, 1994  $ (27,119)   $16,662,415  $16,635,296    22,233.80

  Distributions               (18,007)    (1,782,761)  (1,800,768)

  Redemption Payments          (1,205)      (119,235)    (120,440)     (156.00)

  Net Income                   16,360      1,619,659    1,636,019
                             ---------    -----------  -----------  ----------
BALANCE, December 31, 1995    (29,971)    16,380,078   16,350,107    22,077.80

  Distributions               (13,348)    (1,321,421)  (1,334,769)

  Redemption Payments          (2,355)      (233,227)    (235,582)     (313.42)

  Net Loss                     (3,984)      (195,198)    (199,182)
                             ---------    -----------  -----------  ----------
BALANCE, December 31, 1996  $ (49,658)   $14,630,232  $14,580,574    21,764.38
                             =========    ===========  ===========  ==========




 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995


(1)  Organization -

     AEI Real Estate Fund XVIII Limited Partnership (Partnership)
     was  formed  to  acquire and lease commercial properties  to
     operating tenants.  The Partnership's operations are managed
     by  AEI  Fund  Management XVIII, 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  15,  1989  when  minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)  were  accepted.   The  Partnership's  offering
     terminated  December  4,  1990 when  the  extended  offering
     period expired.  The Partnership received subscriptions  for
     22,783.05 Limited Partnership Units ($22,783,050).
     
     Under  the  terms of the Limited Partnership Agreement,  the
     Limited  Partners and General Partners contributed funds  of
     $22,783,050, 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.
     
     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 l% 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.
     
     

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(1)  Organization - (Continued)

     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.
     
(2)  Summary of Significant Accounting Policies -

     Financial Statement Presentation

       The  accounts  of  the Partnership are maintained  on  the
       accrual  basis of accounting for both federal  income  tax
       purposes and financial reporting purposes.

     Accounting Estimates
     
       Management  uses  estimates and assumptions  in  preparing
       these  financial statements in accordance  with  generally
       accepted  accounting  principles.   Those  estimates   and
       assumptions may affect the reported amounts of assets  and
       liabilities,  the  disclosure  of  contingent  assets  and
       liabilities,  and  the  reported  revenues  and  expenses.
       Actual results could differ from those estimates.
       
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(2)  Summary of Significant Accounting Policies - (Continued)

       The  Partnership regularly assesses whether market  events
       and conditions indicate that it is reasonably possible  to
       recover  the carrying amounts of its investments  in  real
       estate  from  future operations and sales.   A  change  in
       those  market events and conditions could have a  material
       effect on the carrying amount of its real estate
       
     Cash Concentrations of Credit Risk

       At  times  throughout  the year,  the  Partnership's  cash
       deposited  in  financial  institutions  may  exceed   FDIC
       insurance limits.

     Statement of Cash Flows
     
       For  purposes  of  reporting cash  flows,  cash  and  cash
       equivalents  include cash in checking,  cash  invested  in
       money  market  accounts, certificates of deposit,  federal
       agency  notes  and commercial paper with a term  of  three
       months or less.
       
     Income Taxes

       The  income or loss of the Partnership for federal  income
       tax  reporting  purposes is includable in the  income  tax
       returns of the partners.  Accordingly, no recognition  has
       been  given to income taxes in the accompanying  financial
       statements.
       
       The  tax  return, the qualification of the Partnership  as
       such  for  tax  purposes, and the amount of  distributable
       Partnership  income or loss are subject to examination  by
       federal   and  state  taxing  authorities.   If  such   an
       examination  results  in  changes  with  respect  to   the
       Partnership  qualification or in changes to  distributable
       Partnership  income  or loss, the taxable  income  of  the
       partners would be adjusted accordingly.

     Real Estate

       The  Partnership's real estate is leased  under  long-term
       triple  net  leases classified as operating  leases.   The
       Partnership  recognizes  rental  revenue  on  the  accrual
       basis  according  to  the terms of the individual  leases.
       For  leases  which contain cost of living  increases,  the
       increases  are  recognized in the year in which  they  are
       effective.
       
       Real  estate is recorded at the lower of cost or estimated
       net  realizable value.  The Financial Accounting Standards
       Board  issued  Statement  No.  121,  "Accounting  for  the
       Impairment of Long-Lived Assets and for Long-Lived  Assets
       to   be   Disposed   Of"  which  is  effective   for   the
       Partnership's fiscal year ended December 31,  1996.   This
       standard  requires the Partnership to compare the carrying
       amount  of  its  properties to the estimated  future  cash
       flows  expected  to  result  from  the  property  and  its
       eventual  disposition.  If the sum of the expected  future
       cash  flows  is  less  than the  carrying  amount  of  the
       property,  the  Statement  requires  the  Partnership   to
       recognize  an impairment loss by the amount by  which  the
       carrying amount of the property exceeds the fair value  of
       the  property.   Adoption  of this  Statement  required  a
       recognition of an impairment loss of $1,686,300  on  three
       properties in 1996.
       
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(2)  Summary of Significant Accounting Policies - (Continued)

       The  Partnership  has capitalized as Investments  in  Real
       Estate   certain   costs  incurred  in  the   review   and
       acquisition  of the properties.  The costs were  allocated
       to the land, buildings and equipment.
       
       The   buildings  and  equipment  of  the  Partnership  are
       depreciated  using the straight-line method for  financial
       reporting purposes based on estimated useful lives  of  30
       years and 10 years, respectively.
       
       During  the fourth quarter of 1996, as a result of changes
       in  certain  agreements, the Partnership began  accounting
       for  properties owned as tenants-in-common with  unrelated
       third   parties   using  the  proportionate  consolidation
       method.   Each tenant-in-common owns a separate, undivided
       interest  in  the  properties.  Any tenant-in-common  that
       holds  more than a 50% interest does not control decisions
       over  the  other  tenant-in-common  interests.   The  1996
       financial   statements  reflect  only  this  Partnership's
       percentage  share  of the property's  land,  building  and
       equipment, liabilities, revenues and expenses.
       
       In  fiscal 1995, for properties owned as tenants-in-common
       with   unrelated  third  parties,  other  than  affiliated
       partnerships, the Partnership accounted for  its  interest
       under  the full consolidation method whereby the unrelated
       third  parties' interests in the properties were reflected
       in  the  Partnership's financial statements as a  minority
       interest.   For  purposes  of  financial  reporting,   the
       Partnership consolidated properties in which  it  was  the
       controlling   tenant-in-common  despite  having   only   a
       minority equity interest in the property.
       
       In   both  fiscal  1996  and  1995,  properties  owned  in
       conjunction  with related Partnerships were accounted  for
       using the proportionate consolidation method.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(3)  Related Party Transactions -
     
     On  January  30,  1990, the Partnership acquired  a  4.1022%
     interest in the Sizzler restaurant in Cincinnati, Ohio.   On
     June  7,  1990, the Partnership acquired an 80% interest  in
     the  Cheddar's restaurant in Columbus, Ohio.  On August  24,
     1990,  the Partnership acquired a 93.2478% interest  in  the
     Sizzler restaurant in Springboro, Ohio.  On May 5, 1993, the
     Partnership  acquired  a  27%  interest  in  the  Applebee's
     restaurant  in  Slidell, Louisiana.  On June 16,  1993,  the
     Partnership  acquired a 24% interest in the HomeTown  Buffet
     restaurant  in  Tucson, Arizona.  On  April  10,  1996,  the
     Partnership acquired an 85.0% interest in the Tractor Supply
     Company  in  Bristol,  Virginia.  On August  29,  1996,  the
     Partnership acquired a 32.2% interest in a Champps Americana
     restaurant  in Columbus, Ohio.  The remaining  interests  in
     these  properties are owned by affiliates of the Partnership
     and/or  unrelated third parties.  AEI Real Estate Funds  XVI
     and XVII Limited Partnerships own the remaining interests in
     the Sizzler restaurant in Cincinnati, Ohio.  AEI Real Estate
     Fund  86-A  Limited Partnership owns the remaining interests
     in  the  Cheddar's restaurant and the Sizzler restaurant  in
     Springboro,   Ohio.   AEI  Real  Estate  Fund  XVI   Limited
     Partnership  owns the remaining interest in  the  Applebee's
     restaurant  in Slidell, Louisiana.  AEI Net Lease  Income  &
     Growth  Fund  XIX Limited Partnership and AEI  Institutional
     Net  Lease  Fund  '93  own the remaining  interests  in  the
     HomeTown   Buffet  restaurant  in  Tucson,   Arizona.    The
     Individual General Partner of the Partnership and  unrelated
     third  parties  own the remaining interests in  the  Tractor
     Supply  Company in Bristol, Virginia.  AEI Income  &  Growth
     Fund XXI Limited Partnership owns the remaining interest  in
     the Champps restaurant in Columbus, Ohio.
     
     AFM   and  AEI  received  the  following  compensation   and
     reimbursements for costs and expenses from the Partnership:
     
                                            Total Incurred by the Partnership
                                             for the Years Ended December 31

                                                      1996           1995
a.AEI and AFM are reimbursed for all costs
  incurred in connection with managing the
  Partnership's operations, maintaining the
  Partnership's books and communicating
  the results of operations to the Limited
  Partners.                                        $ 247,414      $ 251,309
                                                    ========       ========

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(3)  Related Party Transactions - (Continued)

                                            Total Incurred by the Partnership
                                             for the Years Ended December 31

                                                       1996            1995
b.AEI and AFM are reimbursed for all direct
  expenses they have paid on the Partnership's
  behalf to third parties.  These expenses included
  printing costs, legal and filing fees, direct
  administrative costs, outside audit and
  accounting costs, taxes, insurance and
  other property costs.                             $ 190,019       $  81,777
                                                     ========        ========

c.AEI is reimbursed for all property acquisition
  costs incurred by it in acquiring properties on
  behalf of the Partnership.  The amounts are net
  of financing and commitment fees and expense
  reimbursements received by the Partnership from
  the lessees in the amount of $55,529 and $8,000
  for 1996 and 1995, respectively.                 $ (33,667)       $  8,798
                                                    ========         ========

     The  payable  to  AEI Fund Management, Inc.  represents  the
     balance due for the services described in 3a, b and c.  This
     balance is non-interest bearing and unsecured and is  to  be
     paid in the normal course of business.
     
(4)  Investments in Real Estate -

     The  Partnership  leases its properties to  various  tenants
     through   non-cancelable  triple  net  leases,   which   are
     classified  as operating leases.  Under a triple net  lease,
     the  lessee  is  responsible  for  all  real  estate  taxes,
     insurance,  maintenance, repairs and operating  expenses  of
     the  property.   The initial Lease terms are  for  20  years
     except  for  the Taco Cabana restaurants in San Antonio  and
     New  Braunfels,  Texas,  the Rally's  restaurants,  and  the
     Children's World daycare centers, which have Lease terms  of
     15  years and the Tractor Supply Company which has  a  Lease
     term of 14 years.  The Leases have renewal options which may
     extend the Lease term an additional 10 years, except for the
     Champps,  Slidell  Applebee's and  the  Rally's  restaurants
     which have renewal options that may extend the Lease term an
     additional 15 years.  The Leases contain rent clauses  which
     entitle the Partnership to receive additional rent in future
     years  based  on stated rent increases or if gross  receipts
     for  the  property exceed certain specified  amounts,  among
     other conditions.  Certain lessees have been granted options
     to  purchase  the  property.  Depending on  the  lease,  the
     purchase price is either determined by a formula, or is  the
     greater  of  the  fair market value of the property  or  the
     amount determined by a formula.  In all cases, if the option
     were to be exercised by the lessee, the purchase price would
     be greater than the original cost of the property.
     

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(4)  Investments in Real Estate - (Continued)

     The  Partnership's  properties are all  commercial,  single-
     tenant  buildings.  The Taco Cabana restaurant purchased  on
     July  19,  1991 was originally constructed in 1984  and  was
     renovated  in 1991.  The Children's World daycare center  in
     Phoenix  was  constructed in 1988 and  the  HomeTown  Buffet
     restaurant  in  Tucson was constructed in 1993.   All  other
     properties  were constructed in 1989, 1990,  1991  or  1992.
     The  Tractor  Supply  Company and  Champps  restaurant  were
     constructed and acquired in 1996.  The Partnership  acquired
     the  Phoenix Children's World daycare center in  1989.   The
     Partnership acquired its interest in the Slidell  Applebee's
     restaurant  and  the  Tucson HomeTown Buffet  restaurant  in
     1993.  All other properties were acquired in 1990, 1991  and
     1992.   There have been no costs capitalized as improvements
     subsequent to the acquisitions.
     
     For  those properties in the table below which do  not  have
     land  costs,  the  lessee has entered  into  long-term  land
     leases  with  unrelated  third parties.   The  cost  of  the
     properties   not  held  for  sale  and  related  accumulated
     depreciation at December 31, 1996 are as follows:
     
                                           Buildings and           Accumulated
Property                          Land       Equipment     Total   Depreciation

Children's World, Phoenix, AZ $   259,467  $   624,019  $   883,486 $   175,109
Pasta Fair Restaurant,
 Belleview, FL                    251,593      681,269      932,862     152,339
Children's World,
 Blue Springs, MO                 162,290      628,981      791,271     153,115
Children's World, Lenexa, KS      185,788      797,739      983,527     185,785
Taco Cabana, San Antonio, TX      871,844      534,582    1,406,426     119,328
Cheddar's, Clive, IA              379,249    1,012,999    1,392,248     233,340
Children's World,
 Westerville, OH                  157,848      832,413      990,261     169,203
Taco Cabana, San Antonio, TX      405,771      312,153      717,924      56,195
Taco Cabana, Brownsville, TX      361,652      438,286      799,938      79,135
Applebee's, Destin, FL            359,188      415,425      774,613      87,582
Children's World,
 Columbus, OH                     157,569      861,633    1,019,202     138,199
Rally's, San Antonio, TX                0      303,640      303,640      48,696
Rally's, San Antonio, TX                0      308,997      308,997      49,214
Applebee's, Slidell, LA           104,613      175,405      280,018      21,438
HomeTown Buffet,
 Tucson, AZ                       163,688      140,045      303,733      16,533
Tractor Supply Company,
 Bristol, VA                      275,816      582,583      858,399      14,889
Champps, Columbus, OH             278,193      547,877      826,070       6,468
                               -----------  -----------  ----------- ----------
                              $ 4,374,569  $ 9,198,046  $13,572,615 $ 1,706,568
                               ===========  ===========  =========== ==========

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(4)  Investments in Real Estate - (Continued)
     
     The  Partnership  owns  a  4.1022%  interest  in  a  Sizzler
     restaurant  in  Cincinnati, Ohio, a 93.2478% interest  in  a
     Sizzler  restaurant in Springboro, Ohio, and a 100% interest
     in  a  Sizzler restaurant in Fairfield, Ohio.  In  November,
     1993,  after  reviewing the lessee's operating results,  the
     Partnership  determined that the lessee would be  unable  to
     operate  the  restaurants in a manner capable of  maximizing
     the  restaurants' sales.  Consequently, at the direction  of
     the  Partnership,  a multi-unit restaurant operator  assumed
     operation of the restaurants while the Partnership  reviewed
     the available options.  In January, 1994 and June, 1994, the
     Partnership   closed  the  restaurants  in  Cincinnati   and
     Springboro, respectively, and listed them for sale or lease.
     While   the  properties  are  vacant,  the  Partnership   is
     responsible  for  the  real estate  taxes  and  other  costs
     required to maintain the properties.  At December 31,  1996,
     these  properties  were classified on the balance  sheet  as
     Real Estate Held for Sale.
     
     On  July 15, 1994, the Partnership re-leased the Sizzler  in
     Fairfield to Fairfield Foods, Inc. (Fairfield) under a Lease
     Agreement with a primary term of 20 years and annual  rental
     payments based on a percentage of sales.  Fairfield was  not
     able  to  profitably operate the restaurant and  closed  the
     restaurant.   The  Partnership is  reviewing  the  available
     options, which include selling or re-leasing the property.
     
     No rents were collected from the Sizzler restaurants in 1996
     and  1995.  The total amount of rent not collected  in  1996
     and  1995 was $396,541 and $384,991, respectively,  for  the
     three  properties.   These  amounts  were  not  accrued  for
     financial reporting purposes.
     
     On  January  23, 1997, the Partnership sold its interest  in
     the  Cincinnati restaurant to an unrelated third party.  The
     Partnership  received  net sales proceeds  of  approximately
     $19,900,  which  resulted  in a net  loss  of  approximately
     $31,700, which was recognized as a real estate impairment in
     1996.
     
     In  December,  1996,  the Partnership,  in  order  to  avoid
     additional property management expenses, decided to sell the
     Sizzler  properties in Springboro and Fairfield rather  than
     to  continue  to attempt to re-lease the properties.   As  a
     result, the properties have been reclassified on the balance
     sheet  to Real Estate Held for Sale.  In addition, based  on
     an  analysis  of  market conditions  in  the  area,  it  was
     determined that a sale of the properties would result in net
     proceeds of approximately $800,000.  The Partnership's share
     of  the  proceeds would be approximately $773,000.  A charge
     to  operations for real estate impairment of $1,645,600  was
     recognized,  which is the difference between book  value  at
     December  31,  1996 of $2,427,600 and the  estimated  market
     value of $773,000.  The charge was recorded against the cost
     of the land, building and equipment.
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(4)  Investments in Real Estate - (Continued)
     
     In  August,  1995, the lessee of the two Rally's  properties
     filed  for  reorganization.  After reviewing  the  operating
     results  of the lessee, the Partnership agreed to amend  the
     Leases  of the two properties.  Effective December 1,  1995,
     the  Partnership amended the Leases to reduce the base  rent
     from  the  current  annual rent of $47,498  and  $48,392  to
     $15,000  for  each property.  The Partnership could  receive
     additional  rent in the future equal to 6.75% of the  amount
     by  which  gross  receipts exceed $275,000.   In  1997,  the
     Leases,   as  amended,  were  confirmed  as  part   of   the
     reorganization plan.  The lessee has agreed to pay all post-
     petition   rents   due   and   the   Partnership's   related
     administrative and legal expenses. The Partnership  is  owed
     $29,128  of  pre-petition rent, which was  not  accrued  for
     financial  reporting  purposes due  to  the  uncertainty  of
     collection.
     
     In February, 1996, the Partnership called a letter of credit
     for  $109,393  related  to  the Taco  Cabana  restaurant  in
     Brownsville,  Texas.  The Partnership applied the  funds  to
     satisfy  rents  and  real estate taxes due.   In  1997,  the
     Partnership took possession of the property and  has  listed
     it  for sale or re-lease.  While the property is being  sold
     or    re-leased,   the   Partnership   has    assumed    the
     responsibilities  for  real estate  taxes  and  other  costs
     required to maintain the property.
     
     On   July  6,  1995,  the  Partnership  sold  the  Cheddar's
     restaurant   in   Columbus,  Ohio,  to  the   lessee.    The
     Partnership received net sale proceeds of $1,259,320,  which
     resulted  in a net gain of $105,291.  At the time  of  sale,
     the cost and related accumulated depreciation was $1,306,191
     and $152,162, respectively.
     
     On  September  1, 1995, the Partnership sold the  Applebee's
     restaurant  in  Memphis,  Tennessee,  to  the  lessee.   The
     Partnership received net sale proceeds of $1,444,822,  which
     resulted  in a net gain of $465,562.  At the time  of  sale,
     the cost and related accumulated depreciation was $1,126,919
     and $147,659, respectively.
     
     The  Partnership used the majority of the proceeds from  the
     two  property  sales in 1995 to purchase two  properties  in
     1996,  as  discussed below.  The remainder of  the  proceeds
     from  these sales were distributed to the Partners  in  1995
     and 1996.
     
     On  April  10,  1996,  the Partnership  purchased  an  85.0%
     interest  in  a Tractor Supply Company in Bristol,  Virginia
     for  $1,094,367.  The property is leased to  Tractor  Supply
     Company  under a Lease Agreement with a primary term  of  14
     years and annual rental payments of $116,686.
     
     On  August  29,  1996,  the Partnership  purchased  a  32.2%
     interest in a Champps Americana restaurant in Columbus, Ohio
     for  $826,070.   The property is leased to Americana  Dining
     Corporation under a Lease Agreement with a primary  term  of
     20 years and annual rental payments of $90,834.
     
     On  May  10,  1996,  the Partnership sold  the  Taco  Cabana
     restaurant  in  New Braunfels, Texas to an  unrelated  third
     party.   The  Partnership  received  net  sale  proceeds  of
     $962,298, which resulted in a net gain of $254,305.  At  the
     time  of sale, the cost and related accumulated depreciation
     of the property was $784,045 and $76,052, respectively.
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(4)  Investments in Real Estate - (Continued)
     
     Through December 31, 1996, the Partnership sold 30.7627%  of
     the  Applebee's  restaurant  in  Destin,  Florida  in  three
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received  total net sale proceeds  of  $471,191
     which  resulted in a total net gain of $161,208.  The  total
     cost  and  related accumulated depreciation of the interests
     sold  was $344,167 and $34,184, respectively.  For the  year
     ended December 31, 1996, the net gain was $124,583.
     
     On  March  10,  1997,  the Partnership  sold  an  additional
     15.6446%  interest in the Applebee's restaurant  in  Destin,
     Florida  to  an  unrelated  third  party.   The  Partnership
     received  net sale proceeds of approximately $225,000  which
     resulted in a net gain of approximately $71,000.
     
     Through December 31, 1996, the Partnership sold 37.6757%  of
     a  Taco  Cabana  restaurant in San Antonio, Texas  in  three
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received  total net sale proceeds  of  $607,835
     which  resulted in a total net gain of $206,757.  The  total
     cost  and  related accumulated depreciation of the interests
     sold  was $433,992 and $32,914, respectively.  For the  year
     ended December 31, 1996, the net gain was $206,757.
     
     On  February  28, 1997, the Partnership sold  an  additional
     11.5896%  interest  in  the Taco Cabana  restaurant  in  San
     Antonio, Texas to an unrelated third party.  The Partnership
     received  net sale proceeds of approximately $187,000  which
     resulted in a net gain of approximately $64,000.
     
     Through December 31, 1996, the Partnership sold 18.3278%  of
     the  Tractor  Supply  Company in Bristol,  Virginia  in  two
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received  total net sale proceeds  of  $271,085
     which  resulted in a total net gain of $37,784.   The  total
     cost  and  related accumulated depreciation of the interests
     sold  was  $235,969 and $2,668, respectively.  For the  year
     ended December 31, 1996, the net gain was $37,784.
     
     Subsequent  to  December 31, 1996, the Partnership  sold  an
     additional  14.4585% interest in the Tractor Supply  Company
     in   Bristol,  Virginia  in  two  separate  transactions  to
     unrelated third parties.  The Partnership received net  sale
     proceeds of approximately $218,000 which resulted in  a  net
     gain of approximately $36,000.
     
     On  March  10, 1997, the Partnership sold a 7.0899% interest
     in  the Champps Americana restaurant in Columbus, Ohio to an
     unrelated  third party.  The Partnership received  net  sale
     proceeds of approximately $214,000 which resulted in  a  net
     gain of approximately $34,000.
     
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(4)  Investments in Real Estate - (Continued)
     
     Pursuant to the Partnership Agreement, net sale proceeds may
     be  reinvested in additional properties until  a  date  five
     years after the date on which the offer and sale of Units is
     terminated.   This period expired on December 4,  1995.   In
     December, 1996, 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  sale  proceeds  from  the  Taco   Cabana
     restaurants, Tractor Supply Company and subsequent  property
     sales in additional properties.  The Amendment passed with a
     majority of Units voting in favor of the Amendment.
     
     During  1996 and 1995, the Partnership distributed  $372,366
     and  $691,021  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
     $16.85   and   $30.90   per   Limited   Partnership    Unit,
     respectively.
     
     The Partnership's share of the minimum future rentals on the
     non-cancelable Leases for years subsequent to  December  31,
     1996 are as follows:

                       1997         $  1,610,416
                       1998            1,628,734
                       1999            1,650,139
                       2000            1,672,231
                       2001            1,693,200
                       Thereafter     13,286,425
                                     ------------
                                    $ 21,541,145
                                     ============

     The  Partnership recognized contingent rents of $12,429  and
     $10,372 in 1996 and 1995, respectively.

(5)  Security Deposit -

     In February, 1996, the Partnership called a letter of credit
     for  $109,393  related  to  the Taco  Cabana  restaurant  in
     Brownsville,  Texas.  The Partnership applied the  funds  to
     satisfy rents and real estate taxes due.  As of December 31,
     1996,  the  Partnership  was  holding  $665  as  a  security
     deposit.
     
(6)  Line of Credit-

     In  September, 1994, the Partnership established a  $150,000
     unsecured  line  of  credit  at  Fidelity  Bank  of   Edina,
     Minnesota.   On  January 5, 1995, the  line  of  credit  was
     increased to $300,000.  The line of credit bears interest at
     the  prime rate plus one percent on the outstanding balance,
     which  is  due  on demand, but in any event  no  later  than
     January  5,  1996.   The line of credit was  established  to
     provide  short-term  financing to cover any  temporary  cash
     deficits.  In January, 1996, the line of credit expired.  In
     1995,  interest expense related to the line  of  credit  was
     $6,115.
     
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(7)  Major Tenants -

     The following schedule presents rent revenue from individual
     tenants,   or  affiliated  groups  of  tenants,   who   each
     contributed more than ten percent of the Partnership's total
     rent revenue for the years ended December 31:
     
                                                       1996            1995
      Tenants                       Industry

     Children's World
      Learning Centers, Inc.      Child Care       $   540,763    $   529,191
     Heartland Restaurant Corp.   Restaurant           194,353        269,763
     Texas Taco Cabana L.P.       Restaurant           372,481        444,049
                                                    -----------    -----------

     Aggregate rent revenue of major tenants       $ 1,107,597    $ 1,243,003
                                                    ===========    ===========

     Aggregate rent revenue of major tenants as
     a percentage of total rent revenue                    68%            69%
                                                    ===========    ===========

(8)  Partners' Capital -

     Cash  distributions of $15,703 and $19,212 were made to  the
     General Partners and $1,321,421 and $1,782,761 were made  to
     the  Limited Partners for the years ended December 31,  1996
     and 1995, respectively.  The Limited Partners' distributions
     represent  $60.07  and $80.33 per Limited  Partnership  Unit
     outstanding  using 21,999 and 22,194 weighted average  Units
     in 1996 and 1995, respectively.  The distributions represent
     $-0-  and  $67.58  per Unit of Net Income,  and  $60.07  and
     $12.75 per Unit of return of contributed capital in 1996 and
     1995, respectively.
     
     As  part  of  the  Limited  Partner distributions  discussed
     above, the Partnership distributed $368,643 and $684,111  of
     proceeds from property sales in 1996 and 1995, respectively.
     The  distributions  reduced the Limited  Partners'  Adjusted
     Capital Contributions.
     
     Distributions  of  Net  Cash Flow to  the  General  Partners
     during  1996  and  1995  were subordinated  to  the  Limited
     Partners  as  required in the Partnership Agreement.   As  a
     result,  99% of distributions were allocated to the  Limited
     Partners and 1% to the General Partners.
     
     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.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995

(8)  Partners' Capital - (Continued)

     During  1996, fifteen Limited Partners redeemed a  total  of
     313.42 Partnership Units for $233,227 in accordance with the
     Partnership Agreement.  The Partnership acquired these Units
     using  Net Cash Flow from operations.  In 1995, ten  Limited
     Partners  redeemed  a  total of 156  Partnership  Units  for
     $119,235.   The  redemptions increase the remaining  Limited
     Partners' ownership interest in the Partnership.

     After  the  effect of redemptions and the return of  capital
     from   the   sale   of   property,  the   Adjusted   Capital
     Contribution,  as defined in the Partnership  Agreement,  is
     $993.38 per original $1,000 invested.
     
(9)  Income Taxes -

     The  following is a reconciliation of net income (loss)  for
     financial reporting purposes to income reported for  federal
     income tax purposes for the years ended December 31:
     
                                                    1996            1995
     
     Net Income (Loss) for Financial
      Reporting Purposes                       $  (199,182)     $ 1,636,019
      
     Depreciation for Tax Purposes
      Under Depreciation for Financial
      Reporting Purposes                            60,603           46,707
     
     Amortization of Start-Up and
      Organization Costs                           (31,354)         (72,344)
     
     Income Accrued for Tax Purposes
      Over Income for Financial
      Reporting Purposes                            17,207                0
     
     Property Expenses for Tax Purposes
      Under Expenses for Financial
      Reporting Purposes                             5,209                0
     
     Gain on Sale of Real Estate for
        Tax Purposes Over (Under) Gain for
        Financial Reporting Purposes             1,686,929          (25,318)
                                                -----------      -----------
            Taxable  Income to Partners        $ 1,539,412      $ 1,585,064
                                                ===========      ===========
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995
                                
(9)  Income Taxes - (Continued)
     
     The  following is a reconciliation of Partners' capital  for
     financial  reporting purposes to Partners' capital  reported
     for federal income tax purposes for the years ended December
     31:
     
                                                       1996            1995
     
     Partners' Capital for
       Financial  Reporting Purposes               $14,580,574     $16,350,107
     
     Adjusted Tax Basis of Investments
      in Real Estate Over (Under) Net
      Investments in Real Estate
      for Financial Reporting Purposes               1,708,198         (39,334)
     
     Capitalized Start-Up Costs
      Under Section 195                                397,387         419,267
     
     Amortization of Start-Up and
      Organization Costs                              (392,406)       (381,473)
     
     Income Accrued for Tax Purposes Over
      Income for Financial
      Reporting Purposes                                22,207           5,000
     
     Property Expenses for Tax Purposes
      Under Expenses for Financial
      Reporting Purposes                                 6,668               0
     
     Organization and Syndication Costs
      Treated as Reduction of Capital
      for Financial Reporting Purposes               3,342,442       3,342,442
                                                    -----------     -----------
           Partners' Capital for
               Tax  Reporting Purposes             $19,665,070     $19,696,009
                                                    ===========     ===========

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1996 AND 1995
                                
(10) Fair Value of Financial Instruments -

     The estimated fair values of the financial instruments, none
     of  which  are held for trading purposes, are as follows  at
     December 31:
     
                                    1996                      1995
                           Carrying      Fair       Carrying        Fair
                            Amount       Value       Amount         Value
     
     Cash                $      127   $      127   $    2,940   $    2,940
     Money Market Funds   1,364,257    1,364,257    1,339,592    1,339,592
     Commercial Paper
      (held to maturity)    995,542      995,542            0            0
     Federal Agency Notes
      (held to maturity)          0            0      990,442      990,442
                          ----------   ----------   ----------   ----------
       Total Cash and
        Cash Equivalents $2,359,926   $2,359,926   $2,332,974   $2,332,974
                          ==========   ==========   ==========   ==========
     
     The amortized cost basis of the commercial paper and federal
     agency  notes is not materially different from its  carrying
     amount or fair value.
     
ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE.

          None.

                            PART III
                                
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
        PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

        The  registrant  is  a  limited partnership  and  has  no
officers,  directors, or direct employees.  The General  Partners
of  the  registrant are Robert P. Johnson and AFM.   The  General
Partners  manage and control the Partnership's affairs  and  have
general  responsibility and the ultimate authority in all matters
affecting the Partnership's business.  The director and  officers
of AFM are as follows:

        Robert  P.  Johnson, age 52, is Chief Executive  Officer,
President  and  Director and has held these positions  since  the
formation  of  AFM in September, 1988, and has  been  elected  to
continue in these positions until September, 1997.  From 1970  to
the  present, he has been employed exclusively in the  investment
industry,  specializing  in  tax-advantaged  limited  partnership
investments.   In  that  capacity, he has been  involved  in  the
development,  analysis, marketing and management  of  public  and
private investment programs investing in net lease properties  as
well  as  public  and  private investment programs  investing  in
energy  development.   Since  1971,  Mr.  Johnson  has  been  the
president,  a  director  and  a  registered  principal   of   AEI
Incorporated,  which  is  registered  with  the  Securities   and
Exchange Commission as a securities broker-dealer, is a member of
the  National Association of Securities Dealers, Inc. (NASD)  and
is  a  member  of  the Security Investors Protection  Corporation
(SIPC).   Mr.  Johnson has been president,  a  director  and  the
principal shareholder of AEI Fund Management, Inc., a real estate
management  company founded by him, since 1978.  Mr.  Johnson  is
currently  a general partner or principal of the general  partner
in fifteen other limited partnerships.

        Mark  E.  Larson,  age 44, is Executive  Vice  President,
Treasurer  and  Chief Financial Officer and has been  elected  to
continue in these position until September, 1995.  Mr. Larson has
been  executive Vice President and Treasurer since the  formation
of  AFM  in  September,  1988 and Chief Financial  Officer  since
January, 1990.  In January, 1993 Mr. Larson was elected to  serve
as  Secretary of AFM and will continue to serve until  September,
1997.  Mr. Larson has been employed by AEI Fund Management,  Inc.
and  affiliated  entities since 1985.  From  1979  to  1985,  Mr.
Larson   was  with  Apache  Corporation  as  manager  of  Program
Accounting  responsible  for  the  accounting  and  reports   for
approximately 46 public partnerships.  Mr. Larson is  responsible
for   supervising  the  accounting  functions  of  AFM  and   the
registrant.

ITEM 10.  EXECUTIVE COMPENSATION.

        The General Partner and affiliates are reimbursed at cost
for  all  services performed on behalf of the registrant and  for
all  third party expenses paid on behalf of the registrant.   The
cost for services performed on behalf of the registrant is actual
time  spent  performing such services plus  an  overhead  burden.
These  services include organizing the registrant  and  arranging
for  the  offer  and  sale  of Units,  reviewing  properties  for
acquisition and rendering administrative and management services.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

        AFM, the Managing General Partner of the registrant,  and
Robert  P.  Johnson, its Individual General Partner,  contributed
$1,000 in total for their interest in the registrant.  See Item 1
for  a discussion of their share of the registrant's profits  and
losses.   During  1990, AFM purchased twenty Limited  Partnership
Units  (less  than  1%  of  the Units outstanding)  from  certain
Limited  Partners.   As of December 31, 1996, Mr.  Johnson  owned
twenty-six Limited Partnership Units (less than 1% of  the  Units
outstanding).

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        The  registrant,  AFM  and  its  affiliates  have  common
management and utilize the same facilities.  As a result, certain
administrative  expenses  are  allocated  among   these   related
entities.   All  of  such activities and any  other  transactions
involving the affiliates of the General Partner of the registrant
are  governed  by,  and  are conducted in  conformity  with,  the
limitations set forth in the Limited Partnership Agreement of the
registrant.

        The following table sets forth the forms of compensation,
distributions  and cost reimbursements paid by the registrant  to
the  General Partners or their Affiliates in connection with  the
operation  of  the Fund and its properties for  the  period  from
inception through December 31, 1996.

 Person or Entity                               Amount Incurred From Inception
   Receiving               Form and Method          (September 20, 1988) to
 Compensation              of Compensation             December 31, 1996

AEI Incorporated  Selling Commissions equal to 7%          $ 2,278,305
                  of proceeds plus a 3% nonaccountable
                  expense allowance, most of which was 
                  reallowed to Participating Dealers.

General Partners  Reimbursement at Cost for other          $ 1,064,137
and Affiliates    Organization and Offering Costs.

General Partners  Reimbursement at Cost for all            $   472,342
and Affiliates    Acquisition Expenses

General Partners  1% of Net Cash Flow in any fiscal year   $   115,957
                  until the Limited Partners have received
                  annual, non-cumulative distributions of
                  Net Cash Flow equal to 10% of their
                  Adjusted Capital Contributions and
                  10% of any remaining Net Cash Flow in 
                  such fiscal year.

General Partners  Reimbursement at Cost for all            $ 1,994,391
and Affiliates    Administrative Expenses attributable 
                  to the Fund, including all expenses
                  related to management and disposition
                  of the Fund's properties and all other 
                  transfer agency, reporting, partner
                  relations and other administrative
                  functions.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. (Continued)

Person or Entity                                Amount Incurred From Inception
  Receiving                Form and Method         (September 20, 1988) to
Compensation               of Compensation            December 31, 1996

General Partners  15% of distributions of Net Proceeds     $ 11,745
                  of Sale other than distributions 
                  necessary to restore Adjusted Capital
                  Contributions and provide a 6% cumulative 
                  return to Limited Partners. The General
                  Partners will receive only 1% of 
                  distributions of Net Proceeds of Sale
                  until Limited Partners have received an
                  amount equal to (a) their Adjusted Capital 
                  Contributions, plus (b) an amount equal
                  to 14% of their Adjusted Capital
                  Contributions per annum, cumulative but not
                  compounded,less (c) all previous  cash
                  distributions to the Limited Partners.

        The  limitations  included in the  Partnership  Agreement
require   that  the  cumulative  reimbursements  to  the  General
Partners  and  their affiliates for administrative  expenses  not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the  sum of (i) the front-end fees allowed by the Guidelines less
the  front-end fees paid, (ii) the cumulative property management
fees  allowed  but  not  paid, (iii) any real  estate  commission
allowed under the Guidelines, and (iv) 10% of Net Cash Flow  less
the  Net Cash Flow actually distributed.  The reimbursements  not
allowed  under  the  Guidelines include  a  controlling  person's
salary  and  fringe  benefits,  rent  and  depreciation.   As  of
December  31, 1996, the cumulative reimbursements to the  General
Partners and their affiliates did not exceed those amounts.

                                
                             PART IV

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

             A.   Exhibits -
                                   Description

                 3.1   Certificate  of  Limited
                       Partnership (incorporated by reference  to
                       Exhibit    3.1    of   the    registrant's
                       Registration Statement on Form S-11  filed
                       with  the Commission on September 26, 1988
                       [File No. 33-24419]).

                 3.2   Limited   Partnership
                       Agreement  (incorporated by  reference  to
                       Exhibit    3.2    of   the    registrant's
                       Registration Statement on Form S-11  filed
                       with  the Commission on September 26, 1988
                       [File No. 33-24419]).

                 10.1  Net Lease Agreement dated
                       September    28,    1989    between    the
                       Partnership and Children's World  Learning
                       Centers, Inc. relating to the property  at
                       4120   E.  Ranch  Circle  Drive,  Phoenix,
                       Arizona  (incorporated  by  reference   to
                       Exhibit  10.2 of Post-Effective  Amendment
                       No.  1  to  the  registrant's Registration
                       Statement  on  Form S-11  filed  with  the
                       Commission on April 14, 1990 [File No. 33-
                       24419]).

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

            (3)  Exhibits - (Continued)

                            Description

                 10.2  Net Lease Agreement dated
                       June 26, 1990 between the Partnership  and
                       Children's  World Learning  Centers,  Inc.
                       relating  to  the property at  2100  North
                       Highway    7,   Blue   Springs,   Missouri
                       (incorporated  by  reference  to   Exhibit
                       10.6   of   Form  10-K  filed   with   the
                       Commission on July 27, 1992).

                 10.3  Net Lease Agreement dated
                       September    13,    1990    between    the
                       Partnership and Children's World  Learning
                       Centers, Inc. relating to the property  at
                       8555   Monrovia  Street,  Lenexa,   Kansas
                       (incorporated  by  reference  to   Exhibit
                       10.8   of   Form  10-K  filed   with   the
                       Commission on July 27, 1992).

                 10.4  Net Lease Agreement dated
                       December  29, 1990 between the Partnership
                       and  Taco  Cabana, Inc.  relating  to  the
                       property  at  7339 San Pedro  Avenue,  San
                       Antonio,  Texas (incorporated by reference
                       to  Exhibit  10.9 of Form 10-K filed  with
                       the Commission on July 27, 1992).

                 10.5  Net Lease Agreement dated
                       January  22,  1991 between the Partnership
                       and   Heartland   Restaurant   Corporation
                       relating  to  the property  at  1301  N.W.
                       114th  Street,  Clive, Iowa  (incorporated
                       by  reference to Exhibit 10.10 of Form 10-
                       K  filed  with the Commission on July  27,
                       1992).

                 10.6  Net Lease Agreement dated
                       June 20, 1991 between the Partnership  and
                       Children's  World Learning  Centers,  Inc.
                       relating  to the property at 1231  Sunbury
                       Road,  Westerville, Ohio (incorporated  by
                       reference  to Exhibit 10.12 of  Form  10-K
                       filed  with  the Commission  on  July  27,
                       1992).

                 10.7  Net Lease Agreement dated
                       July 19, 1991 between the Partnership  and
                       Taco   Cabana,   Inc.  relating   to   the
                       property  at  6867 Highway  90  West,  San
                       Antonio,  Texas (incorporated by reference
                       to  Exhibit 10.13 of Form 10-K filed  with
                       the Commission on July 27, 1992).

                 10.8  Net Lease Agreement dated
                       August  9,  1991  between the  Partnership
                       and  Red  Line Taco One, Ltd. relating  to
                       the   property  at  54  South  Expressway,
                       Brownsville,   Texas   (incorporated    by
                       reference  to Exhibit 10.14 of  Form  10-K
                       filed  with  the Commission  on  July  27,
                       1992).

                 10.9  Net Lease Agreement dated
                       October  31,  1991 between the Partnership
                       and   T.S.S.O.,  Inc.  relating   to   the
                       property  at  5701 Emerald Coast  Parkway,
                       Destin,    Florida    (incorporated     by
                       reference  to Exhibit 10.15 of  Form  10-K
                       filed  with  the Commission  on  July  27,
                       1992).

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

            (3)  Exhibits - (Continued)

                              Description

            10.10      Net Lease  Agreement
                       dated   December  10,  1991  between   the
                       Partnership  and Pasta Fair of  Belleview,
                       Inc.  relating  to the property  at  10401
                       Highway     441,    Belleview,     Florida
                       (incorporated  by  reference  to   Exhibit
                       10.16   of   Form  10-K  filed  with   the
                       Commission on July 27, 1992).

            10.11      Net Lease  Agreement
                       dated   July   28,   1992   between    the
                       Partnership and Children's World  Learning
                       Centers, Inc. relating to the property  at
                       4885  Cherry  Bottom Road, Columbus,  Ohio
                       (incorporated  by  reference  to   Exhibit
                       10.17   of   Form  10-K  filed  with   the
                       Commission on March 29, 1993).

            10.12      Net Lease  Agreement
                       dated   December  7,  1992   between   the
                       Partnership and Red Line San Antonio  One,
                       Ltd.  relating to the property at 529 Fair
                       Avenue,  San  Antonio, Texas (incorporated
                       by  reference to Exhibit 10.19 of Form 10-
                       K  filed with the Commission on March  29,
                       1993).

            10.13      Net Lease  Agreement
                       dated   December  7,  1992   between   the
                       Partnership and Red Line San Antonio  One,
                       Ltd.  relating  to  the property  at  4606
                       Rittiman   Road,   San   Antonio,    Texas
                       (incorporated  by  reference  to   Exhibit
                       10.20   of   Form  10-K  filed  with   the
                       Commission on March 29, 1993).

            10.14      Net Lease  Agreement
                       dated  May 5, 1993 between the Partnership
                       and  GC  Slidell,  Inc.  relating  to  the
                       property   at   850  I-10  Service   Road,
                       Slidell,   Louisiana   (incorporated    by
                       reference  to Exhibit 10.22 of  Form  10-K
                       filed  with  the Commission on  March  29,
                       1994).

            10.15      Net Lease  Agreement
                       dated   June   16,   1993   between    the
                       Partnership  and  JB's  Restaurants,  Inc.
                       relating  to  the property  at  330  South
                       Wilmot      Road,     Tucson,      Arizona
                       (incorporated  by  reference  to   Exhibit
                       10.23   of   Form  10-K  filed  with   the
                       Commission on March 29, 1994).

            10.16      Purchase  Agreement
                       dated    May   24,   1994   between    the
                       Partnership  and Nicoletta Trust  relating
                       to  the  property  at 5701  Emerald  Coast
                       Parkway, Destin, Florida (incorporated  by
                       reference to Exhibit 10.23 of Form  10-KSB
                       filed  with  the Commission on  March  30,
                       1995).

            10.17      Co-tenancy Agreement
                       dated   June   17,   1994   between    the
                       Partnership  and Nicoletta Trust  relating
                       to  the  property  at 5701  Emerald  Coast
                       Parkway, Destin, Florida (incorporated  by
                       reference to Exhibit 10.24 of Form  10-KSB
                       filed  with  the Commission on  March  30,
                       1995).

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

            (3)  Exhibits - (Continued)

                                 Description

            10.18      Sale  and  Leaseback
                       Financing   Commitment   Agreement   dated
                       September 21, 1995 and Amendment  to  Sale
                       and    Leaseback   Financing    Commitment
                       Agreement  dated October 18, 1995  between
                       AEI  Fund  Management,  Inc.  and  Tractor
                       Supply  Company,  Inc.  relating  to   the
                       property  at  Old Airport Road  and  I-81,
                       Bristol,    Virginia   (incorporated    by
                       reference  to Exhibit 10.1 of Form  10-QSB
                       filed  with the Commission on November  2,
                       1995).

            10.19      Sale  and  Leaseback
                       Financing  Commitment dated  September  5,
                       1995  between  AEI  Fund Management,  Inc.
                       and  Americana Dining Corporation relating
                       to  the  property at 161  E.  Campus  View
                       Boulevard,  Columbus,  Ohio  (incorporated
                       by  reference to Exhibit 10.24 of Form 10-
                       KSB  filed  with the Commission  on  March
                       21, 1996).

             10.20     Amendment to Sale and
                       Leaseback   Financing   Commitment   dated
                       November   30,  1995  between   AEI   Fund
                       Management,    Inc.,   Americana    Dining
                       Corporation, AEI Income & Growth Fund  XXI
                       Limited  Partnership and  the  Partnership
                       relating to the property at 161 E.  Campus
                       View     Boulevard,     Columbus,     Ohio
                       (incorporated  by  reference  to   Exhibit
                       10.25  of  Form  10-KSB  filed  with   the
                       Commission on March 21, 1996).

            10.21      Amendment  of  Lease
                       dated   January  25,  1996   between   the
                       Partnership,  AEI  Net  Lease   Income   &
                       Growth  Fund XIX Limited Partnership,  Red
                       Line  San  Antonio One, Ltd. and Red  Line
                       Burgers,  Inc. relating to the  properties
                       at  529  Fair  Avenue, and  4606  Rittiman
                       Road, San Antonio, Texas (incorporated  by
                       reference to Exhibit 10.26 of Form  10-KSB
                       filed  with  the Commission on  March  21,
                       1996).
          
            10.22      Net Lease  Agreement
                       dated   April   10,   1996   between   the
                       Partnership,   Robert   P.   Johnson   and
                       Tractor  Supply  Company relating  to  the
                       property  at  Old Airport Road  and  I-81,
                       Bristol,    Virginia   (incorporated    by
                       reference  to  Exhibit 10.2  of  Form  8-K
                       filed  with  the Commission on  April  17,
                       1996).

            10.23      Purchase  Agreement
                       dated  May 3, 1996 between the Partnership
                       and  the  Givens Family Trust relating  to
                       the   property  at  811  I-H  North,   New
                       Braunfels,    Texas    (incorporated    by
                       reference  to  Exhibit 10.1  of  Form  8-K
                       filed  with  the  Commission  on  May  21,
                       1996).

            10.24      Net Lease  Agreement
                       dated   August   29,  1996   between   the
                       Partnership, AEI Income & Growth Fund  XXI
                       Limited  Partnership and Americana  Dining
                       Corporation  relating to the  property  at
                       161  E.  Campus View Boulevard,  Columbus,
                       Ohio   (incorporated   by   reference   to
                       Exhibit  10.3 of Form 8-K filed  with  the
                       Commission on September 12, 1996).

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

            (3)  Exhibits - (Continued)

                                 Description

            10.25      Purchase  Agreement
                       dated   July   23,   1996   between    the
                       Partnership   and  Carolyn   W.   Davidson
                       relating  to the property at 6867  Highway
                       90  West, San Antonio, Texas (incorporated
                       by  reference to Exhibit 10.1 of Form  10-
                       QSB  filed with the Commission on November
                       14, 1996).

            10.26      Property  Co-Tenancy
                       Ownership Agreement dated August  5,  1996
                       between  the  Partnership and  Carolyn  W.
                       Davidson relating to the property at  6867
                       Highway   90  West,  San  Antonio,   Texas
                       (incorporated  by  reference  to   Exhibit
                       10.2   of  Form  10-QSB  filed  with   the
                       Commission on November 14, 1996).

            10.27      Purchase  Agreement
                       dated   August   23,  1996   between   the
                       Partnership, Robert P. Johnson, and  Joyce
                       R.  Scott relating to the property at  Old
                       Airport  Road and I-81, Bristol,  Virginia
                       (incorporated  by  reference  to   Exhibit
                       10.3   of  Form  10-QSB  filed  with   the
                       Commission on November 14, 1996).

            10.28      Property  Co-Tenancy
                       Ownership  Agreement dated  September  12,
                       1996  between the Partnership,  Robert  P.
                       Johnson,  and Joyce R. Scott  relating  to
                       the  property at Old Airport Road  and  I-
                       81,  Bristol,  Virginia  (incorporated  by
                       reference  to Exhibit 10.4 of Form  10-QSB
                       filed with the Commission on November  14,
                       1996).

            10.29      Purchase  Agreement
                       dated   October   9,  1996   between   the
                       Partnership, Robert P. Johnson,  and  Arel
                       D.  and  Louise B. Middleton  relating  to
                       the  property at Old Airport Road  and  I-
                       81,  Bristol,  Virginia  (incorporated  by
                       reference  to Exhibit 10.5 of Form  10-QSB
                       filed with the Commission on November  14,
                       1996).

            10.30      Purchase  Agreement
                       dated   October   9,  1996   between   the
                       Partnership  and  Arel D.  and  Louise  B.
                       Middleton  relating  to  the  property  at
                       6867  Highway 90 West, San Antonio,  Texas
                       (incorporated  by  reference  to   Exhibit
                       10.6   of  Form  10-QSB  filed  with   the
                       Commission on November 14, 1996).

            10.31      Property  Co-Tenancy
                       Ownership  Agreement  dated  October   15,
                       1996  between the Partnership,  Robert  P.
                       Johnson,   and  Arel  D.  and  Louise   B.
                       Middleton relating to the property at  Old
                       Airport  Road and I-81, Bristol,  Virginia
                       (incorporated  by  reference  to   Exhibit
                       10.7   of  Form  10-QSB  filed  with   the
                       Commission on November 14, 1996).

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

            (3)  Exhibits - (Continued)

                                   Description

            10.32      Property  Co-Tenancy
                       Ownership  Agreement  dated  October   15,
                       1996  between the Partnership and Arel  D.
                       and  Louise B. Middleton relating  to  the
                       property  at  6867 Highway  90  West,  San
                       Antonio,  Texas (incorporated by reference
                       to  Exhibit 10.8 of Form 10-QSB filed with
                       the Commission on November 14, 1996).

            10.33      Purchase  Agreement
                       dated   December  6,  1996   between   the
                       Partnership  and the Hesson Family  Living
                       Trust  relating  to the property  at  6867
                       Highway 90 West, San Antonio, Texas.

            10.34      Property  Co-Tenancy
                       Ownership  Agreement  dated  December  16,
                       1996  between  the  Partnership  and   the
                       Hesson  Family  Living Trust  relating  to
                       the  property at 6867 Highway 90 West, San
                       Antonio, Texas.

            10.35      Purchase  Agreement
                       dated   December  23,  1996  bwtween   the
                       Partnership  and  John  Pasini  and  Elvia
                       Pasini  relating to the property  at  5701
                       Emerald Coast Parkway, Destin, Florida.

            10.36      Purchase  Agreement
                       dated   December  23,  1996  between   the
                       Partnership and Kent T. Wood and  Kimberly
                       Pasini  Wood  relating to the property  at
                       5701   Emerald   Coast  Parkway,   Destin,
                       Florida.

            10.37      Purchase  Agreement
                       dated   December  26,  1996  between   the
                       Partnership  and  William  E.  Mason   and
                       Hazel  Mason  relating to the property  at
                       Old   Airport  Road  and  I-81,   Bristol,
                       Virginia.

            10.38      Property  Co-Tenancy
                       Agreement dated December 30, 1996  between
                       the  Partnership and John Pasini and Elvia
                       Pasini  relating to the property  at  5701
                       Emerald Coast Parkway, Destin, Florida.

            10.39      Property  Co-Tenancy
                       Agreement dated December 30, 1996  between
                       the  Partnership  and  Kent  T.  Wood  and
                       Kimberly  Pasini  Wood  relating  to   the
                       property  at  5701 Emerald Coast  Parkway,
                       Destin, Florida.

            10.40      Property  Co-Tenancy
                       Agreement  dated January 2,  1997  between
                       the  Partnership and William E. Mason  and
                       Hazel  Mason  relating to the property  at
                       Old   Airport  Road  and  I-81,   Bristol,
                       Virginia.

            10.41      Purchase  Agreement
                       dated   February  14,  1997  between   the
                       Partnership   and   Anton   Kuster,    Jr.
                       relating  to the property at 6867  Highway
                       90 West, San Antonio, Texas.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.

            (3)  Exhibits - (Continued)

                                   Description

            10.42      Property  Co-Tenancy
                       Ownership  Agreement  dated  February  28,
                       1997  between  the Partnership  and  Anton
                       Kuster,  Jr.  relating to the property  at
                       6867 Highway 90 West, San Antonio, Texas.


                  27   Financial Data Schedule
                       for year ended December 31, 1996.

             B.   Reports on Form 8-K and Form 8-K/A - None.


                           SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) of the
Securities  Exchange Act of 1934, the registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.

                            AEI REAL ESTATE FUND XVIII
                            Limited Partnership
                            By:  AEI  Fund Management  XVIII, Inc.
                                Its Managing General Partner


March 17, 1997              By: /s/ Robert P. Johnson
                                    Robert  P. Johnson, President and Director
                                    (Principal Executive Officer)


        Pursuant  to the requirements of the Securities  Exchange
Act  of  1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and  on
the dates indicated.

        Name                             Title                        Date


/s/ Robert P. Johnson   President (Principal Executive Officer) March 17, 1997
    Robert P. Johnson   and Sole Director of Managing General
                        Partner

/s/ Mark E. Larson      Executive Vice President, Treasurer     March 17, 1997
    Mark E. Larson      and Chief Financial Officer
                        (Principal Accounting Officer)