UNITED STATES 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, 2006

                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.)

      30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
            (Address of principal executive offices)

                          (651) 227-7333
                   (Issuer's telephone number)

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

Securities registered under Section 12(g) of the Exchange 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 Exchange Act during the  past
12  months  (or  for such shorter period that the registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.         Yes [X]  No

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  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]

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

The Issuer's revenues for the year ended December 31, 2006 were
$496,426.

As  of  February 28, 2007, there were 18,952.13 Units of  limited
partnership  interest 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 $18,952,130.

               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,  the  President and sole director  of  AFM,  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 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.  Prior
to  2005,  the  Partnership  sold  some  of  its  properties  and
reinvested the proceeds from such sales in additional properties.
It  is  anticipated that the Partnership will sell its  remaining
properties  within the next two years, although final liquidation
may  be  delayed  by a number of circumstances, including  market
conditions and seller financing of 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  triple  net  leases,  which  are  classified   as
operating  leases.   Under  a triple net  lease,  the  tenant  is
responsible  for  all real estate taxes, insurance,  maintenance,
repairs  and  operating expenses for the property.   The  primary
lease  terms  are  for 15 to 20 years.  The  leases  provide  the
tenant with two to four five-year renewal options subject to  the
same  terms  and  conditions as the  primary  term.   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.

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

Property Activity

        In  July  2003, the tenant of the Razzoo's restaurant  in
Alpharetta,  Georgia  notified  the  Partnership  that   it   was
experiencing  financial  difficulty  stemming  from  lower   than
expected sales and that it might not be able to pay future rents.
In  late 2003, the tenant closed the restaurant and said that  it
no   longer  intended  to  operate  a  restaurant  at  the  site.
Subsequent to this action, the tenant and the Partnership reached
a  settlement  related to the property, the Lease was  terminated
and  the  tenant  returned possession  of  the  property  to  the
Partnership.  While the property was vacant, the Partnership  was
responsible  for  real estate taxes and other costs  required  to
maintain the property.

         In  December  2004,  the  Partnership  entered  into  an
agreement  to  sell the property in Alpharetta  to  an  unrelated
third  party.   On  March  29, 2005, the  sale  closed  with  the
Partnership  receiving  net  sale  proceeds  of  $648,425,  which
resulted in a net gain of $48,425.  At the time of sale, the  net
book value of the property was $600,000.

       In October 2003, the Partnership entered into an agreement
to  sell  the Cheddar's restaurant in Clive, Iowa to an unrelated
third  party.   On  January 6, 2004, the  sale  closed  with  the
Partnership  receiving  net sale proceeds  of  $2,131,025,  which
resulted  in a net gain of $1,223,369.  At the time of sale,  the
cost  and  related  accumulated depreciation was  $1,392,249  and
$484,593, respectively.

        In February 2004, Garden Ridge, L.P. (GR), the tenant  of
the  Garden  Ridge  retail store in Woodlands, Texas,  filed  for
Chapter  11  bankruptcy reorganization.  In  press  releases,  GR
reported rejecting the leases of 9 of 44 stores and that  it  was
attempting to renegotiate lease terms for its other stores.   The
Woodlands  store  was not identified as one of  the  nine  to  be
closed.  GR entered into negotiations with the property owners of
the  Woodlands  store to arrive at an agreement to modify  rental
terms that would induce GR to assume the Lease for this property.
GR  and  the  property  owners subsequently  agreed  to  a  Lease
amendment  to  reduce the annual rent by 23%,  with  a  10%  rent
increase on January 1, 2008.  The Partnership's share of the  new
rental amount is $175,968.  The amendment provides for additional
rental  payments  if  the  store's sales  exceed  certain  stated
amounts.   The amendment also calls for the owners to waive  rent
for   one  month  during  the  first  six  months  following  the
bankruptcy  court's  approval of GR's assumption  of  the  Lease.
With  the exception of February 2004, GR made all rental payments
due under its original Lease.

       On April 28, 2005, the bankruptcy court approved GR's Plan
of  Reorganization.   As  part of the Plan,  the  Lease  for  the
Woodlands store was assumed by GR and the Lease amendment  became
effective.  Pursuant to the amendment, GR selected July  2005  as
the one month to have rent waived.  In May 2005, GR paid the rent
due  for  February  2004 and, pursuant to the amendment,  GR  was
entitled  to  credit an equal amount against any  installment  of
rent  due  in the future.  GR applied the credit for the February
rent against rent due for August and September 2005.

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

       On November 3, 2006, the Partnership sold its 24% interest
in  the  Garden  Ridge  retail store in Woodlands,  Texas  to  an
unrelated  third  party.   The  Partnership  received  net   sale
proceeds of $2,094,119, which resulted in a net gain of $245,256.
At   the   time   of  sale,  the  cost  and  related  accumulated
depreciation was $1,995,850 and $146,987, respectively.   Through
the date of sale, GR complied with all Lease terms as amended.

        On  February  5,  2004, the Partnership purchased  a  50%
interest  in  a  Jared  Jewelry store in Lakewood,  Colorado  for
$2,017,633.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
initial annual rent of $155,219.  The remaining interest  in  the
property was purchased by AEI Net Lease Income & Growth Fund  XIX
Limited Partnership, an affiliate of the Partnership.

        During 2006, the Partnership sold its 50% interest in the
Jared  Jewelry  store in Lakewood, Colorado,  in  seven  separate
transactions,  to  unrelated  third  parties.   The   Partnership
received total net sale proceeds of $2,382,658, which resulted in
a  net  gain  of  $450,831.   The cost  and  related  accumulated
depreciation  of the interests sold was $2,017,633  and  $85,806,
respectively.

        On  April  30,  2004,  the Partnership  purchased  a  50%
interest   in  an  Applebee's  restaurant  in  Stow,   Ohio   for
$1,575,755.   The property is leased to Apple Ohio  LLC  under  a
Lease  Agreement  with  a primary term of 20  years  and  initial
annual  rent of $120,043.  The remaining interest in the property
was  purchased by AEI Net Lease Income & Growth Fund XIX  Limited
Partnership.

       In October 2005, the Partnership entered into an agreement
to  sell  its 50% interest in the Applebee's restaurant in  Stow,
Ohio to an unrelated third party.  On November 15, 2005, the sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$1,835,784,  which resulted in a net gain of  $310,234.   At  the
time  of sale, the cost and related accumulated depreciation  was
$1,575,755 and $50,205, respectively.

        On May 10, 2004, the Partnership purchased a 50% interest
in  an Eckerd drug store in Auburn, New York for $2,287,133.  The
property  is leased to Eckerd Corporation under a Lease Agreement
with  a  primary  term  of 20 years and initial  annual  rent  of
$184,753.   The remaining interest in the property was  purchased
by AEI Net Lease Income & Growth Fund XIX Limited Partnership.

        On  August 28, 2006, the Partnership sold 6.869%  of  the
Eckerd  drug  store  in Auburn, New York to  an  unrelated  third
party.   The Partnership received net sale proceeds of  $376,203,
which  resulted in a net gain of $76,398.  The cost  and  related
accumulated  depreciation of the interest sold was  $314,206  and
$14,401, respectively.

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

        Subsequent to December 31, 2006, the Partnership sold  an
additional 7.8949% of the Eckerd drug store in Auburn, New  York,
in  two  separate transactions, to unrelated third parties.   The
Partnership  received  total net sale proceeds  of  approximately
$402,000, which resulted in a net gain of approximately  $57,400.
The  cost  and related accumulated depreciation of the  interests
sold was $361,134 and $16,552, respectively.  The Partnership  is
attempting  to  sell  its  remaining  35.2361%  interest  in  the
property.   At December 31, 2006, the property was classified  as
Real Estate Held for Sale with a book value of $1,882,501.

       On May 31, 2005, the Partnership sold its 5.8291% interest
in  the  Applebee's restaurant in Destin, Florida to the  tenant.
The  Partnership  received net sale proceeds of  $109,804,  which
resulted  in  a  net  gain  of $62,281.   The  cost  and  related
accumulated  depreciation of the interest sold  was  $65,215  and
$17,692, respectively.

       During the third quarter of 2005, the Partnership sold its
50%  interest  in  the Johnny Carino's restaurant  in  Mansfield,
Texas,  in  three  separate  transactions,  to  unrelated   third
parties.   The  Partnership received total net sale  proceeds  of
$1,490,853, which resulted in a net gain of $506,543.   The  cost
and  related accumulated depreciation of the interests  sold  was
$1,028,886 and $44,576, respectively.

        On October 18, 2005, the Partnership sold the Old Country
Buffet  restaurant in Northlake, Illinois to an  unrelated  third
party.  The Partnership received net sale proceeds of $1,973,839,
which  resulted in a net gain of $851,215.  At the time of  sale,
the  cost and related accumulated depreciation was $1,350,804 and
$228,180, respectively.

        In May 2003, the Partnership entered into an agreement to
sell  a  Taco  Cabana  restaurant in San Antonio,  Texas  to  the
tenant.   The agreement was extended several times to enable  the
tenant  to  complete their due diligence and certain negotiations
with   adjacent  land  owners.   During  this  time,  the  tenant
continued  to  pay rent and complied with the lease  obligations.
On  January  26,  2006,  the  sale closed  with  the  Partnership
receiving  net sale proceeds of $1,642,624, which resulted  in  a
net  gain of $484,970.  At the time of sale, the cost and related
accumulated    depreciation   was   $1,406,426   and    $248,772,
respectively.  At December 31, 2005, the property was  classified
as Real Estate Held for Sale with a book value of $1,157,654.

        In May 2006, the Partnership entered into an agreement to
sell the Children's World daycare center in Lenexa, Kansas to  an
unrelated third party.  On August 14, 2006, the Partnership  sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$849,224, which resulted in a net gain of $306,488.  At the  time
of  sale,  the  cost  and  related accumulated  depreciation  was
$983,527 and $440,791, respectively.

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

Major Tenants

        During 2006, three tenants each contributed more than ten
percent  of  the Partnership's total rental revenue.   The  major
tenants  in aggregate contributed 80% of total rental revenue  in
2006.   It  is anticipated that, based on minimum rental payments
required under the leases, KinderCare Learning Centers, Inc. will
continue to contribute more than ten percent of rental revenue in
2007  and  future years.  Garden Ridge L.P. will  not  contribute
more  than ten percent of rental revenue in 2007 and future years
as the property was sold in 2006.  Eckerd Corporation will likely
not  contribute more than ten percent of rental revenue  in  2007
and  future  years as the Partnership is attempting to  sell  the
property.   Any  failure of these major tenants 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  attempted  to diversify the type and  location  of  the
Partnership's properties.

Description of Properties

       The Partnership's properties are commercial, single tenant
buildings.  The properties were acquired on a debt-free basis and
are  leased to various tenants under 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.

ITEM 2.DESCRIPTION OF PROPERTIES.  (Continued)

        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, 2006.

                               Total Property                Annual   Annual
                     Purchase    Acquisition                  Lease   Rent Per
Property               Date        Costs      Tenant         Payment  Sq. Ft.

Children's World                            KinderCare
Daycare Center                               Learning
 Blue Springs, MO     6/27/90  $  791,271  Centers, Inc.    $112,340  $14.04

Children's World                            KinderCare
Daycare Center                               Learning
 Westerville, OH      6/21/91  $  990,261  Centers, Inc.    $146,769  $18.40

Taco Cabana Restaurant
 San Antonio, TX                            Texas Taco
 (9.3699%)            7/19/91  $  107,933   Cabana L.P.     $ 20,388  $48.63

Children's World                            KinderCare
Daycare Center                               Learning
 Columbus, OH         8/10/92  $1,019,202   Centers, Inc.   $139,793  $15.83

Tractor Supply
 Company Store
 Bristol, VA                               Tractor Supply
 (7.5158%)            4/10/96  $   96,765  Company, Inc.    $ 12,249  $ 8.69

Champps Americana
 Restaurant                                  Champps
 Columbus, OH                               Operating
 (.5061%)             8/29/96  $   12,984  Corporation      $  1,747  $42.25

Fuddruckers Restaurant
 Thornton, CO
 (.7606%)             7/30/97  $   10,693  Fuddruckers, Inc.$  1,386  $36.61

Tumbleweed Restaurant
 Chillicothe, OH                           Tumbleweed,
 (43.9634%)          11/20/98  $  560,612     Inc.          $ 65,605  $27.21

ITEM 2.DESCRIPTION OF PROPERTIES.  (Continued)

                               Total Property                Annual   Annual
                     Purchase    Acquisition                  Lease   Rent Per
Property               Date        Costs      Tenant         Payment  Sq. Ft.

Eckerd Drug Store
 Auburn, NY                                    Eckerd
 (43.131%)            5/10/04  $1,972,927    Corporation    $159,372  $26.75

        The  properties  listed above with  a  partial  ownership
percentage  are  owned with affiliates of the Partnership  and/or
unrelated  third  parties.   The  remaining  interests   in   the
Tumbleweed restaurant and the Eckerd drug store are owned by  AEI
Net  Lease  Income  &  Growth Fund XIX  Limited  Partnership  and
unrelated  third parties.  The remaining interests  in  the  Taco
Cabana   restaurant,  the  Tractor  Supply  Company  store,   the
Fuddruckers  restaurant and the Champps Americana restaurant  are
owned by unrelated third parties.

        The Partnership accounts for properties owned as tenants-
in-common  with  affiliated Partnerships and/or  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 financial statements reflect  only  this
Partnership's percentage share of the properties' land,  building
and equipment, liabilities, revenues and expenses.

        At  the  time the properties were acquired, the remaining
primary  lease  terms  varied from 15 to 20  years.   The  leases
provide  the  tenants with two to four five-year renewal  options
subject to the same terms and conditions as the primary term.

       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.

         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.

        At  December 31, 2006, all properties listed  above  were
100% occupied.

ITEM 3.LEGAL PROCEEDINGS.

       None.

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

       None.


                             PART II

ITEM 5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
       AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

        (a) As of December 31, 2006, there were 1,365 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.
During the period covered by this report, the Partnership did not
sell  any  equity  securities that are not registered  under  the
Securities Act of 1933.

       Cash distributions of $87,577 and $67,723 were made to the
General Partners and $8,670,043 and $6,704,595 were made  to  the
Limited   Partners   in   2006  and  2005,   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 $7,811,216 and $5,418,667  of
proceeds from property sales in 2006 and 2005, respectively.  The
distributions  reduced  the  Limited Partners'  Adjusted  Capital
Contributions.

       (b) Not applicable.

        (c) Pursuant to Section 7.7 of the Partnership Agreement,
as  amended, each Limited Partner has the right to present  Units
to  the  Partnership  for purchase by submitting  notice  to  the
Managing  General Partner.  The purchase price of  the  Units  is
equal to 90% of the net asset value of the Units as determined by
the Managing General Partner in accordance with the provisions of
the Partnership Agreement.  Units tendered to the Partnership are
redeemed  at  the purchase price established for the  quarter  in
which the Partnership received a notice at least 60 days prior to
the  repurchase  dates of January 1st, April 1st,  July  1st  and
October   1st   subject  to  the  following   limitations.    The
Partnership is not obligated to purchase in any year more than 5%
of  the number of Units outstanding at the beginning of the year.
In  no event shall the Partnership be obligated to purchase Units
if,  in the sole discretion of the Managing General Partner, such
purchase   would   impair  the  capital  or  operation   of   the
Partnership.

ITEM 5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
       AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

      Small Business Issuer Purchases of Equity Securities
                                                             Maximum Number
                                       Total Number of Units of Units that May
              Total Number   Average   Purchased as Part of  Yet Be Purchased
                of Units    Price Paid Publicly Announced    Under the Plans
               Purchased     per Unit  Plans or Programs     or  Programs

10/1/06 to 10/31/06  12      $441.32       3,825.92(1)             (2)

11/1/06 to 11/30/06  --           --                --              --

12/1/06 to 12/31/06  --           --                --              --

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

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.

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

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

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

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

    the effect of tenant defaults; and

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

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

The Application of Critical Accounting Policies

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

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

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

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

Results of Operations

        For  the  years  ended December 31, 2006  and  2005,  the
Partnership  recognized rental income from continuing  operations
of  $496,426 and $490,242, respectively.  In 2006, rental  income
increased due to rent increases on two properties.

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

        For  the  years  ended December 31, 2006  and  2005,  the
Partnership  incurred  Partnership administration  expenses  from
affiliated parties of $129,221 and $187,923, respectively.  These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.  As  the
Partnership's asset base decreases due to property sales,  it  is
allocated a smaller share of expenses that are allocated  by  AEI
Fund  Management, Inc. based on the relative assets of the  funds
under  management.   During  the same  periods,  the  Partnership
incurred   Partnership  administration  and  property  management
expenses   from  unrelated  parties  of  $40,727   and   $21,406,
respectively.  These expenses represent direct payments to  third
parties  for legal and filing fees, direct administrative  costs,
outside audit costs, taxes, insurance and other property costs.

        For  the  years  ended December 31, 2006  and  2005,  the
Partnership  recognized interest income of $104,767 and  $56,244,
respectively.  In 2006, interest income increased mainly  due  to
the  Partnership  having more money invested in  a  money  market
account due to property sales.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Partnership  includes  the operating  results  and  sale  of  the
property   in   discontinued  operations.    In   addition,   the
Partnership reclassifies the prior periods operating results  and
any  partial  sales  of the property to discontinued  operations.
For  the year ended December 31, 2006, the Partnership recognized
income  from  discontinued operations of $1,979,829, representing
rental  income less property management expenses and depreciation
of  $415,886  and gain on disposal of real estate of  $1,563,943.
For  the year ended December 31, 2005, the Partnership recognized
income  from  discontinued operations of $2,734,199, representing
rental  income less property management expenses and depreciation
of $955,501 and gain on disposal of real estate of $1,778,698.

        In  July  2003, the tenant of the Razzoo's restaurant  in
Alpharetta,  Georgia  notified  the  Partnership  that   it   was
experiencing  financial  difficulty  stemming  from  lower   than
expected sales and that it might not be able to pay future rents.
In  late 2003, the tenant closed the restaurant and said that  it
no   longer  intended  to  operate  a  restaurant  at  the  site.
Subsequent to this action, the tenant and the Partnership reached
a  settlement  related to the property, the Lease was  terminated
and  the  tenant  returned possession  of  the  property  to  the
Partnership.  While the property was vacant, the Partnership  was
responsible  for  real estate taxes and other costs  required  to
maintain the property.

         In  December  2004,  the  Partnership  entered  into  an
agreement  to  sell the property in Alpharetta  to  an  unrelated
third  party.   On  March  29, 2005, the  sale  closed  with  the
Partnership  receiving  net  sale  proceeds  of  $648,425,  which
resulted in a net gain of $48,425.  At the time of sale, the  net
book value of the property was $600,000.

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

        In February 2004, Garden Ridge, L.P. (GR), the tenant  of
the  Garden  Ridge  retail store in Woodlands, Texas,  filed  for
Chapter  11  bankruptcy reorganization.  In  press  releases,  GR
reported rejecting the leases of 9 of 44 stores and that  it  was
attempting to renegotiate lease terms for its other stores.   The
Woodlands  store  was not identified as one of  the  nine  to  be
closed.  GR entered into negotiations with the property owners of
the  Woodlands  store to arrive at an agreement to modify  rental
terms that would induce GR to assume the Lease for this property.
GR  and  the  property  owners subsequently  agreed  to  a  Lease
amendment  to  reduce the annual rent by 23%,  with  a  10%  rent
increase on January 1, 2008.  The Partnership's share of the  new
rental amount is $175,968.  The amendment provides for additional
rental  payments  if  the  store's sales  exceed  certain  stated
amounts.   The amendment also calls for the owners to waive  rent
for   one  month  during  the  first  six  months  following  the
bankruptcy  court's  approval of GR's assumption  of  the  Lease.
With  the exception of February 2004, GR made all rental payments
due under its original Lease.

       On April 28, 2005, the bankruptcy court approved GR's Plan
of  Reorganization.   As  part of the Plan,  the  Lease  for  the
Woodlands store was assumed by GR and the Lease amendment  became
effective.  Pursuant to the amendment, GR selected July  2005  as
the one month to have rent waived.  In May 2005, GR paid the rent
due  for  February  2004 and, pursuant to the amendment,  GR  was
entitled  to  credit an equal amount against any  installment  of
rent  due  in the future.  GR applied the credit for the February
rent against rent due for August and September 2005.

       On November 3, 2006, the Partnership sold its 24% interest
in  the  Garden  Ridge  retail store in Woodlands,  Texas  to  an
unrelated  third  party.   The  Partnership  received  net   sale
proceeds of $2,094,119, which resulted in a net gain of $245,256.
At   the   time   of  sale,  the  cost  and  related  accumulated
depreciation was $1,995,850 and $146,987, respectively.   Through
the date of sale, GR complied with all Lease terms as amended.

       On May 31, 2005, the Partnership sold its 5.8291% interest
in  the  Applebee's restaurant in Destin, Florida to the  tenant.
The  Partnership  received net sale proceeds of  $109,804,  which
resulted  in  a  net  gain  of $62,281.   The  cost  and  related
accumulated  depreciation of the interest sold  was  $65,215  and
$17,692, respectively.

       During the third quarter of 2005, the Partnership sold its
50%  interest  in  the Johnny Carino's restaurant  in  Mansfield,
Texas,  in  three  separate  transactions,  to  unrelated   third
parties.   The  Partnership received total net sale  proceeds  of
$1,490,853, which resulted in a net gain of $506,543.   The  cost
and  related accumulated depreciation of the interests  sold  was
$1,028,886 and $44,576, respectively.

        On October 18, 2005, the Partnership sold the Old Country
Buffet  restaurant in Northlake, Illinois to an  unrelated  third
party.  The Partnership received net sale proceeds of $1,973,839,
which  resulted in a net gain of $851,215.  At the time of  sale,
the  cost and related accumulated depreciation was $1,350,804 and
$228,180, respectively.

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

       In October 2005, the Partnership entered into an agreement
to  sell  its 50% interest in the Applebee's restaurant in  Stow,
Ohio to an unrelated third party.  On November 15, 2005, the sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$1,835,784,  which resulted in a net gain of  $310,234.   At  the
time  of sale, the cost and related accumulated depreciation  was
$1,575,755 and $50,205, respectively.

        In May 2003, the Partnership entered into an agreement to
sell  a  Taco  Cabana  restaurant in San Antonio,  Texas  to  the
tenant.   The agreement was extended several times to enable  the
tenant  to  complete their due diligence and certain negotiations
with   adjacent  land  owners.   During  this  time,  the  tenant
continued  to  pay rent and complied with the lease  obligations.
On  January  26,  2006,  the  sale closed  with  the  Partnership
receiving  net sale proceeds of $1,642,624, which resulted  in  a
net  gain of $484,970.  At the time of sale, the cost and related
accumulated    depreciation   was   $1,406,426   and    $248,772,
respectively.  At December 31, 2005, the property was  classified
as Real Estate Held for Sale with a book value of $1,157,654.

        In May 2006, the Partnership entered into an agreement to
sell the Children's World daycare center in Lenexa, Kansas to  an
unrelated third party.  On August 14, 2006, the Partnership  sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$849,224, which resulted in a net gain of $306,488.  At the  time
of  sale,  the  cost  and  related accumulated  depreciation  was
$983,527 and $440,791, respectively.

        During 2006, the Partnership sold its 50% interest in the
Jared  Jewelry  store in Lakewood, Colorado,  in  seven  separate
transactions,  to  unrelated  third  parties.   The   Partnership
received total net sale proceeds of $2,382,658, which resulted in
a  net  gain  of  $450,831.   The cost  and  related  accumulated
depreciation  of the interests sold was $2,017,633  and  $85,806,
respectively.

        On  August 28, 2006, the Partnership sold 6.869%  of  the
Eckerd  drug  store  in Auburn, New York to  an  unrelated  third
party.   The Partnership received net sale proceeds of  $376,203,
which  resulted in a net gain of $76,398.  The cost  and  related
accumulated  depreciation of the interest sold was  $314,206  and
$14,401, respectively.

        Subsequent to December 31, 2006, the Partnership sold  an
additional 7.8949% of the Eckerd drug store in Auburn, New  York,
in  two  separate transactions, to unrelated third parties.   The
Partnership  received  total net sale proceeds  of  approximately
$402,000, which resulted in a net gain of approximately  $57,400.
The  cost  and related accumulated depreciation of the  interests
sold was $361,134 and $16,552, respectively.  The Partnership  is
attempting  to  sell  its  remaining  35.2361%  interest  in  the
property.   At December 31, 2006, the property was classified  as
Real Estate Held for Sale with a book value of $1,882,501.

        In the second quarter of 2005, the Partnership decided to
discontinue the reinvestment of proceeds from property  sales  in
additional  properties.   As a result, the  Partnership's  rental
income  and operating income will decrease in the future  as  the
Partnership sells its remaining properties.

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

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

Liquidity and Capital Resources

       During the year ended December 31, 2006, the Partnership's
cash  balances  decreased $1,498,974 as a result of distributions
paid  to  the Partners in excess of cash generated from operating
and  investing  activities.  During the year ended  December  31,
2005, the Partnership's cash balances increased $3,584,805  as  a
result  of  cash generated from the sale of property,  which  was
partially offset by distributions paid to the Partners in  excess
of cash generated from operating activities.

        Net  cash provided by operating activities decreased from
$1,585,538 in 2005 to $890,978 in 2006 due to a decrease in total
rental and interest income in 2006 and net timing differences  in
the  collection  of  payments from lessees  and  the  payment  of
expenses,   which  were  partially  offset  by  a   decrease   in
Partnership  administration and property management  expenses  in
2006.

        During  the years ended December 31, 2006 and  2005,  the
Partnership generated cash flow from the sale of real  estate  of
$7,344,828 and $6,058,705, respectively.

       The Partnership's primary use of cash flow is distribution
and  redemption  payments to Partners.  The Partnership  declares
its  regular  quarterly  distributions before  the  end  of  each
quarter and pays the distribution in the first week after the end
of  each quarter.  The Partnership attempts to maintain a  stable
distribution  rate from quarter to quarter.  Redemption  payments
are paid to redeeming Partners on a quarterly basis.

        For  the  years  ended December 31, 2006  and  2005,  the
Partnership  declared distributions of $8,757,620 and $6,772,318,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of  $8,670,043  and  $6,704,595  and  the  General
Partners  received distributions of $87,577 and $67,723  for  the
periods, respectively.  In June, September and December 2005, the
Partnership  declared special distributions of net sale  proceeds
of  $505,051,  $1,515,152  and  $3,282,828,  respectively,  which
resulted  in a higher distribution payable at December 31,  2005.
In  March,  June,  September and December 2006,  the  Partnership
declared   special   distributions  of  net  sale   proceeds   of
$1,717,172,  $505,051,  $3,030,303 and $2,525,253,  respectively,
which resulted in higher distributions in 2006.

         During   2006  and  2005,  the  Partnership  distributed
$7,890,117 and $5,473,401 of net sale proceeds to the Limited and
General Partners as part of their quarterly distributions,  which
represented  a  return  of  capital of $411.41  and  $283.44  per
Limited Partnership Unit, respectively.

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

        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 2006, 12 Limited Partners redeemed a total of  126
Partnership  Units for $75,266 in accordance with the Partnership
Agreement.  During 2005, 28 Limited Partners redeemed a total  of
261.25  Partnership Units for $229,573.  The Partnership acquired
these Units using Net Cash Flow from operations.  In prior years,
a  total  of  266 Limited Partners redeemed 3,438.67  Partnership
Units  for  $2,858,329.  The redemptions increase  the  remaining
Limited  Partners' ownership interest in the Partnership.   As  a
result   of  these  redemption  payments  and  pursuant  to   the
Partnership    Agreement,   the   General    Partners    received
distributions of $760 and $2,319 in 2006 and 2005, respectively.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations on both a short-term and long-term basis.

ITEM 7.   FINANCIAL STATEMENTS.

       See accompanying index to financial statements.





         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP

                  INDEX TO FINANCIAL STATEMENTS






Report of Independent Registered Public Accounting Firm

Balance Sheet as of December 31, 2006 and 2005

Statements for the Years Ended December 31, 2006 and 2005:

     Income

     Cash Flows

     Changes in Partners' Capital

Notes to Financial Statements





     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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, 2006 and 2005, and  the  related
statements of income, 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 the standards of
the  Public  Company Accounting Oversight Board (United  States).
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,  2006 and 2005 and the results of its operations and its cash
flows for the years then ended, in conformity with U.S. generally
accepted accounting principles.




                      /s/Boulay, Heutmaker, Zibell & Co. P.L.L.P.
                                 Certified Public Accountants

Minneapolis, Minnesota
March 23, 2007

<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                          BALANCE SHEET
                           DECEMBER 31

                             ASSETS

                                                      2006           2005
CURRENT ASSETS:
  Cash and Cash Equivalents                       $ 3,208,225    $ 4,707,199

INVESTMENTS IN REAL ESTATE:
  Land                                                806,946      3,426,142
  Buildings and Equipment                           2,782,775      7,447,722
  Accumulated Depreciation                         (1,401,177)    (1,993,893)
                                                   -----------    -----------
                                                    2,188,544      8,879,971
  Real Estate Held for Sale                         1,882,501      1,157,654
                                                   -----------    -----------
      Net Investments in Real Estate                4,071,045     10,037,625
                                                   -----------    -----------
          Total Assets                            $ 7,279,270    $14,744,824
                                                   ===========    ===========

                     LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    15,479    $    56,555
  Distributions Payable                             2,713,680      3,614,814
  Unearned Rent                                        33,242         44,717
                                                   -----------    -----------
      Total Current Liabilities                     2,762,401      3,716,086
                                                   -----------    -----------
PARTNERS' CAPITAL:
  General Partners                                     15,006         17,543
  Limited Partners, $1,000 per Unit;
   30,000 Units authorized; 22,783 Issued;
   18,957 and 19,083 Units outstanding in
   2006 and 2005, respectively                      4,501,863     11,011,195
                                                   -----------    -----------
      Total Partners' Capital                       4,516,869     11,028,738
                                                   -----------    -----------
        Total Liabilities and Partners' Capital   $ 7,279,270    $14,744,824
                                                   ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                       STATEMENT OF INCOME
                 FOR THE YEARS ENDED DECEMBER 3l


                                                      2006            2005

RENTAL INCOME                                     $   496,426    $   490,242

EXPENSES:
  Partnership Administration - Affiliates             129,221        187,923
  Partnership Administration and Property
     Management - Unrelated Parties                    40,727         21,406
  Depreciation                                         89,297         89,499
                                                   -----------    -----------
      Total Expenses                                  259,245        298,828
                                                   -----------    -----------

OPERATING INCOME                                      237,181        191,414

OTHER INCOME:
  Interest Income                                     104,767         56,244
                                                   -----------    -----------

INCOME FROM CONTINUING OPERATIONS                     341,948        247,658

Income from Discontinued Operations                 1,979,829      2,734,199
                                                   -----------    -----------
NET INCOME                                        $ 2,321,777    $ 2,981,857
                                                   ===========    ===========
NET INCOME ALLOCATED:
  General Partners                                $    85,800    $    53,997
  Limited Partners                                  2,235,977      2,927,860
                                                   -----------    -----------
                                                  $ 2,321,777    $ 2,981,857
                                                   ===========    ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
  Continuing Operations                           $     17.82    $     12.79
  Discontinued Operations                               99.89         139.91
                                                   -----------    -----------
         Total                                    $    117.71    $    152.70
                                                   ===========    ===========
Weighted Average Units Outstanding                     18,995         19,174
                                                   ===========    ===========

 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

                                                         2006        2005

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                       $ 2,321,777   $ 2,981,857

  Adjustments To Reconcile Net Income
 To Net Cash Provided By Operating Activities:
     Depreciation                                      185,695       307,464
     Gain on Sale of Real Estate                    (1,563,943)   (1,778,698)
     Decrease in Receivables                                 0        44,454
     Increase (Decrease) in Payable to
       AEI Fund Management, Inc.                       (41,076)        6,785
     Increase (Decrease) in Unearned Rent              (11,475)       23,676
                                                    -----------   -----------
           Total Adjustments                        (1,430,799)   (1,396,319)
                                                    -----------   -----------
       Net Cash Provided By
           Operating Activities                        890,978     1,585,538
                                                    -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from Sale of Real Estate                  7,344,828     6,058,705
                                                    -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase (Decrease) in Distributions Payable       (901,134)    2,944,772
   Distributions to Partners                        (8,757,620)   (6,772,318)
   Redemption Payments                                 (76,026)     (231,892)
                                                    -----------   -----------
       Net Cash Used For
         Financing Activities                       (9,734,780)   (4,059,438)
                                                    -----------   -----------
NET INCREASE (DECREASE) IN CASH
      AND CASH EQUIVALENTS                          (1,498,974)    3,584,805

CASH AND CASH EQUIVALENTS, beginning of period       4,707,199     1,122,394
                                                    -----------   -----------
CASH AND CASH EQUIVALENTS, end of period           $ 3,208,225   $ 4,707,199
                                                    ===========   ===========

 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, 2004   $ 33,588  $15,017,503  $15,051,091    19,344.38

  Distributions               (67,723)  (6,704,595)  (6,772,318)

  Redemption Payments          (2,319)    (229,573)    (231,892)     (261.25)

  Net Income                   53,997    2,927,860    2,981,857
                              --------  -----------  -----------   ----------
BALANCE, December 31, 2005     17,543   11,011,195   11,028,738    19,083.13

  Distributions               (87,577)  (8,670,043)  (8,757,620)

  Redemption Payments            (760)     (75,266)     (76,026)     (126.00)

  Net Income                   85,800    2,235,977    2,321,777
                              --------  -----------  -----------   ----------
BALANCE, December 31, 2006   $ 15,006  $ 4,501,863  $ 4,516,869    18,957.13
                              ========  ===========  ===========   ==========


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

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

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

     The   terms  of  the  Partnership  offering  called  for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced  operations  on February  15,  1989  when  minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)   were   accepted.   The  offering   terminated
     December  4, 1990 when the extended offering period expired.
     The Partnership received subscriptions for 22,783.05 Limited
     Partnership   Units.   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 operations, any Net Cash Flow, as defined, which  the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum. Distributions to Limited Partners will  be  made
     pro rata by Units.

     Any  Net  Proceeds  of Sale as defined,  from  the  sale  or
     financing of properties which the General Partners determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner:  (i) first, 99%  to  the
     Limited  Partners and 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, 2006 AND 2005

(1)  Organization - (Continued)

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated  first  in the same ratio in  which,  and  to  the
     extent,  Net  Cash Flow is distributed to the  Partners  for
     such year.  Any additional profits will be allocated 90%  to
     the Limited Partners and 10% to the General Partners. In the
     event  no  Net  Cash  Flow  is distributed  to  the  Limited
     Partners,  90%  of each item of income, gain or  credit  for
     each  respective  year  shall be allocated  to  the  Limited
     Partners,  and 10% of each such item shall be  allocated  to
     the  General Partners.  Net losses from operations  will  be
     allocated 98% to the Limited Partners and 2% to the  General
     Partners.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with the Partnership Agreement as  follows:  (i)
     first,  to  those  partners with deficit balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the Limited  Partners
     and  1%  to the General Partners until the aggregate balance
     in  the Limited Partners' capital accounts equals the sum of
     the Limited Partners' Adjusted Capital Contributions plus an
     amount  equal to 14% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated; (iii) third, to the General  Partners
     until  cumulative allocations to the General Partners  equal
     15%  of cumulative allocations.  Any remaining balance  will
     be  allocated  85% to the Limited Partners and  15%  to  the
     General  Partners.   Losses will be  allocated  98%  to  the
     Limited Partners and 2% to the General Partners.

     The  General Partners are not required to currently  fund  a
     deficit   capital   balance.   Upon   liquidation   of   the
     Partnership or withdrawal by a General Partner, the  General
     Partners will contribute to the Partnership an amount  equal
     to  the  lesser  of  the deficit balances in  their  capital
     accounts  or  1%  of  total Limited  Partners'  and  General
     Partners' capital 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, 2006 AND 2005

(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

       The  Partnership's  cash  is deposited  primarily  in  one
       financial institution and at times during the year it  may
       exceed FDIC insurance limits.

     Statement of Cash Flows

       For  purposes  of  reporting cash  flows,  cash  and  cash
       equivalents  may 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.

     Receivables

       Credit  terms are extended to tenants in the normal course
       of  business.   The  Partnership performs  ongoing  credit
       evaluations  of  its customers' financial  condition  and,
       generally, requires no collateral.

       Receivables   are   recorded  at   their   estimated   net
       realizable  value.  The Partnership follows  a  policy  of
       providing  an  allowance for doubtful  accounts;  however,
       based on historical experience, and its evaluation of  the
       current status of receivables, the Partnership is  of  the
       belief  that  such  accounts will be  collectible  in  all
       material  respects and thus an allowance is not necessary.
       Accounts  are considered past due if payment is  not  made
       on  a  timely  basis in accordance with the  Partnership's
       credit  terms.   Receivables considered uncollectible  are
       written off.

     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.  In general, no recognition  has
       been  given to income taxes in the accompanying  financial
       statements.

       The   tax   return   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   to   distributable
       Partnership  income  or loss, the taxable  income  of  the
       partners would be adjusted accordingly.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

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

     Real Estate

       The  Partnership's real estate is leased under triple  net
       leases   classified  as  operating  leases.   The   leases
       provide  for  base  annual  rental  payments  payable   in
       monthly  installments.  The Partnership recognizes  rental
       revenue  according to the terms of the individual  leases.
       For  leases  which  contain stated rental  increases,  the
       increases  are  recognized in the year in which  they  are
       effective.   Contingent  rental  payments  are  recognized
       when  the  contingencies on which the payments  are  based
       are  satisfied  and the rental payments become  due  under
       the terms of the leases.

       Real  estate is recorded at the lower of cost or estimated
       net   realizable  value.   The  Partnership  compares  the
       carrying   amount  of  its  properties  to  the  estimated
       probability-weighted 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   Partnership
       recognizes an impairment loss by the amount by  which  the
       carrying amount of the property exceeds the fair value  of
       the property.

       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.

       In  accordance  with  Statement  of  Financial  Accounting
       Standards  No.  144,  Accounting  for  the  Impairment  or
       Disposal  of Long-Lived Assets, upon complete disposal  of
       a  property or classification of a property as Real Estate
       Held  for  Sale,  the Partnership includes  the  operating
       results   and   sale  of  the  property  in   discontinued
       operations.   In  addition,  the Partnership  reclassifies
       the  prior periods operating results and any partial sales
       of the property to discontinued operations.

       The  Partnership accounts for properties owned as tenants-
       in-common  with  affiliated Partnerships and/or  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 financial
       statements  reflect  only  this  Partnership's  percentage
       share  of  the  properties' land, building and  equipment,
       liabilities, revenues and expenses.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

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

       The  Partnership's properties are subject to environmental
       laws  and  regulations  adopted  by  various  governmental
       entities  in the jurisdiction in which the properties  are
       located.   These  laws could require  the  Partnership  to
       investigate  and remediate the effects of the  release  or
       disposal  of  hazardous materials at  these  locations  if
       found.  For each property, an environmental assessment  is
       completed  prior to acquisition.  In addition,  the  lease
       agreements  typically  strictly prohibit  the  production,
       handling, or storage of hazardous materials (except  where
       incidental  to  the  tenant's  business  such  as  use  of
       cleaning  supplies)  in violation  of  applicable  law  to
       restrict  environmental and other  damage.   Environmental
       liabilities  are  recorded  when  it  is  determined   the
       liability  is  probable and the costs  can  reasonably  be
       estimated.   There were no environmental issues  noted  or
       liabilities recorded at December 31, 2006 and 2005.

     Reclassification

       Certain  items  in  the prior year's financial  statements
       have  been  reclassified to conform to 2006  presentation.
       These   reclassifications  had  no  effect  on   Partners'
       capital, net income or cash flows.

     Recently Issued Accounting Pronouncements

       Management  has  reviewed  recently  issued,  but  not yet
       effective,   accounting   pronouncements  and    does  not
       expect  the  implementation  of  these  pronouncements  to
       have   a    significant  effect   on   the   Partnership's
       financial statements.

(3)  Related Party Transactions -

     The  Partnership  owns a 43.9634% interest in  a  Tumbleweed
     restaurant.   The remaining interests in this  property  are
     owned  by  AEI  Net Lease Income & Growth Fund  XIX  Limited
     Partnership,  an  affiliate  of  the  Partnership,  and   an
     unrelated   third  party.   At  December   31,   2006,   the
     Partnership owns a 43.131% interest in an Eckerd drug store.
     The  remaining interests in this property are owned  by  AEI
     Net  Lease Income & Growth Fund XIX Limited Partnership  and
     an unrelated third party.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(3)  Related Party Transactions - (Continued)

     The   Partnership  owned  a  24%  interest  in  a   Razzoo's
     restaurant in Alpharetta, Georgia.  The remaining  interests
     in this property were owned by AEI Net Lease Income & Growth
     Fund  XIX Limited Partnership, AEI Income & Growth  Fund  23
     LLC  and  AEI  Private  Net  Lease Millennium  Fund  Limited
     Partnership, affiliates of the Partnership.  The Partnership
     owned  a 50% interest in a Johnny Carino's restaurant.   The
     remaining  interest in this property was owned by  AEI  Real
     Estate  Fund XVII Limited Partnership, an affiliate  of  the
     Partnership.   The Partnership owned a 50%  interest  in  an
     Applebee's restaurant in Stow, Ohio.  The remaining interest
     in  this property was owned by AEI Net Lease Income & Growth
     Fund  XIX Limited Partnership.  The Partnership owned a  24%
     interest  in  a  Garden Ridge retail store.   The  remaining
     interests in this property were owned by AEI Income & Growth
     Fund  XXII Limited Partnership and AEI Income & Growth  Fund
     24  LLC, affiliates of the Partnership, and unrelated  third
     parties.   The Partnership owned a 50% interest in  a  Jared
     Jewelry store.  The remaining interest in this property  was
     owned  by  AEI  Net Lease Income & Growth Fund  XIX  Limited
     Partnership.

     AEI   and  AFM  received  the  following  compensation   and
     reimbursements for costs and expenses from the Partnership:

                                    Total Incurred by the Partnership
                                     for the Years Ended December 31

                                                            2006      2005
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.     $ 129,221  $ 187,923
                                                          ========   ========
b.AEI and AFM are reimbursed for all direct expenses they
  have paid on the Partnership's behalf to third parties
  relating to Partnership administration and property
  management.  These expenses included printing costs,
  legal and filing fees, direct administrative costs,
  outside audit costs, taxes, insurance and other
  property costs.                                        $  45,658  $  36,235
                                                          ========   ========
c.AEI is reimbursed for all costs incurred in connection
  with the sale of property.                             $ 165,316  $ 130,972
                                                          ========   ========

     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.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(4)  Investments in Real Estate -

     The  Partnership  leases its properties to  various  tenants
     under  triple net leases, which are classified as  operating
     leases.  Under a triple net lease, the tenant is responsible
     for  all  real estate taxes, insurance, maintenance, repairs
     and  operating expenses of the property.  At  the  time  the
     properties were acquired, the remaining primary lease  terms
     varied  from 15 to 20 years.  The leases provide the tenants
     with  two to four five-year renewal options subject  to  the
     same  terms and conditions as the primary term.  The  leases
     contain  rent  clauses  which  entitle  the  Partnership  to
     receive additional rent in future years based on stated rent
     increases.

     The  Partnership's properties are commercial,  single-tenant
     buildings.   The  Children's World daycare  center  in  Blue
     Springs, Missouri was constructed and acquired in 1990.  The
     Children's  World  daycare center in Westerville,  Ohio  was
     constructed   and  acquired  in  1991.   The   Taco   Cabana
     restaurant  in San Antonio, Texas was constructed  in  1984,
     renovated in 1991 and acquired by the Partnership after  the
     renovation.    The  Children's  World  daycare   center   in
     Columbus,  Ohio was constructed and acquired in  1992.   The
     Tractor   Supply   Company  store  and   Champps   Americana
     restaurant  in Columbus, Ohio were constructed and  acquired
     in  1996.   The  Fuddruckers restaurant was constructed  and
     acquired in 1997.  The Tumbleweed restaurant was constructed
     and acquired in 1998.  The Eckerd drug store was constructed
     and  acquired in 2004.  There have been no costs capitalized
     as improvements subsequent to the acquisitions.

     The  cost  of  the properties not held for sale and  related
     accumulated  depreciation  at  December  31,  2006  are   as
     follows:

                                        Buildings and            Accumulated
    Property                     Land     Equipment      Total   Depreciation

Children's World,
 Blue Springs, MO              $  162,290  $  628,981  $  791,271  $  363,423
Children's World, Westerville, OH 157,848     832,413     990,261     451,955
Taco Cabana, San Antonio, TX       61,004      46,929     107,933      23,868
Children's World, Columbus, OH    157,569     861,633   1,019,202     435,265
Tractor Supply Company,
 Bristol, VA                       31,092      65,673      96,765      25,183
Champps Americana,
 Columbus, OH                       4,373       8,611      12,984       3,142
Fuddruckers, Thornton, CO           3,383       7,310      10,693       2,383
Tumbleweed, Chillicothe, OH       229,387     331,225     560,612      95,958
                                ---------   ---------   ---------   ---------
                               $  806,946  $2,782,775  $3,589,721  $1,401,177
                                =========   =========   =========   =========

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(4)  Investments in Real Estate - (Continued)

     The  Partnership owns a 9.3699% interest in  a  Taco  Cabana
     restaurant  in San Antonio, Texas, a 7.5158% interest  in  a
     Tractor Supply Company store, a .5061% interest in a Champps
     Americana restaurant in Columbus, Ohio and a .7606% interest
     in  a  Fuddruckers restaurant.  The remaining  interests  in
     these  properties are owned by unrelated third parties,  who
     own the property with the Partnership as tenants-in-common.

     For  properties owned as of December 31, 2006,  the  minimum
     future rent payments required by the leases are as follows:

                       2007           $  557,038
                       2008              407,912
                       2009              334,771
                       2010              252,821
                       2011              240,003
                       Thereafter      2,103,239
                                       ---------
                                      $3,895,784
                                       =========

     There were no contingent rents recognized in 2006 and 2005.

(5)  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:

      Tenants               Industry           2006       2005

     KinderCare Learning
      Centers, Inc.          Child Care      $ 483,751   $ 533,560
     Eckerd Corporation      Retail            176,019     184,753
     Garden Ridge L.P.       Retail            147,618         N/A
     Texas Taco Cabana L.P.  Restaurant            N/A     272,382
                                              ---------   --------
     Aggregate rent revenue of major tenants $ 807,388   $ 990,695
                                              =========   ========
     Aggregate rent revenue of major tenants as
     a percentage of total rent revenue            80%         59%
                                              =========   ========

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(6)Discontinued Operations -

     In  July  2003,  the  tenant of the Razzoo's  restaurant  in
     Alpharetta,  Georgia notified the Partnership  that  it  was
     experiencing financial difficulty stemming from  lower  than
     expected  sales and that it might not be able to pay  future
     rents.   In late 2003, the tenant closed the restaurant  and
     said  that it no longer intended to operate a restaurant  at
     the  site.   Subsequent to this action, the tenant  and  the
     Partnership  reached a settlement related to  the  property,
     the  Lease was terminated and the tenant returned possession
     of  the property to the Partnership.  While the property was
     vacant,  the  Partnership was responsible  for  real  estate
     taxes and other costs required to maintain the property.

     In  December 2004, the Partnership entered into an agreement
     to  sell  the  property in Alpharetta to an unrelated  third
     party.   On  March  29,  2005,  the  sale  closed  with  the
     Partnership  receiving net sale proceeds of $648,425,  which
     resulted in a net gain of $48,425.  At the time of sale, the
     net book value of the property was $600,000.

     In February 2004, Garden Ridge, L.P. (GR), the tenant of the
     Garden  Ridge  retail store in Woodlands, Texas,  filed  for
     Chapter 11 bankruptcy reorganization.  In press releases, GR
     reported rejecting the leases of 9 of 44 stores and that  it
     was  attempting  to renegotiate lease terms  for  its  other
     stores.   The Woodlands store was not identified as  one  of
     the  nine  to be closed.  GR entered into negotiations  with
     the  property owners of the Woodlands store to arrive at  an
     agreement  to  modify rental terms that would induce  GR  to
     assume  the  Lease for this property.  GR and  the  property
     owners  subsequently agreed to a Lease amendment  to  reduce
     the  annual rent by 23%, with a 10% rent increase on January
     1,  2008.  The Partnership's share of the new rental  amount
     was  $175,968.  The amendment provides for additional rental
     payments if the store's sales exceed certain stated amounts.
     The  amendment also calls for the owners to waive  rent  for
     one   month  during  the  first  six  months  following  the
     bankruptcy court's approval of GR's assumption of the Lease.
     With  the  exception of February 2004, GR  made  all  rental
     payments due under its original Lease.

     On  April 28, 2005, the bankruptcy court approved GR's  Plan
     of  Reorganization.  As part of the Plan, the Lease for  the
     Woodlands  store  was assumed by GR and the Lease  amendment
     became  effective.  Pursuant to the amendment,  GR  selected
     July  2005  as  the one month to have rent waived.   In  May
     2005,  GR  paid the rent due for February 2004 and, pursuant
     to  the amendment, GR was entitled to credit an equal amount
     against  any  installment of rent due  in  the  future.   GR
     applied  the credit for the February rent against  rent  due
     for August and September 2005.

     On  November 3, 2006, the Partnership sold its 24%  interest
     in  the Garden Ridge retail store in Woodlands, Texas to  an
     unrelated  third party.  The Partnership received  net  sale
     proceeds  of  $2,094,119, which resulted in a  net  gain  of
     $245,256.   At  the  time  of sale,  the  cost  and  related
     accumulated   depreciation  was  $1,995,850  and   $146,987,
     respectively.   Through the date of sale, GR  complied  with
     all Lease terms as amended.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(6)  Discontinued Operations - (Continued)

     On  May  31, 2005, the Partnership sold its 5.8291% interest
     in  the  Applebee's  restaurant in Destin,  Florida  to  the
     tenant.   The  Partnership received  net  sale  proceeds  of
     $109,804, which resulted in a net gain of $62,281.  The cost
     and  related  accumulated depreciation of the interest  sold
     was $65,215 and $17,692, respectively.

     During  the third quarter of 2005, the Partnership sold  its
     50% interest in the Johnny Carino's restaurant in Mansfield,
     Texas,  in  three separate transactions, to unrelated  third
     parties.   The Partnership received total net sale  proceeds
     of  $1,490,853,  which resulted in a net gain  of  $506,543.
     The   cost  and  related  accumulated  depreciation  of  the
     interests sold was $1,028,886 and $44,576, respectively.

     On  October  18, 2005, the Partnership sold the Old  Country
     Buffet  restaurant in Northlake, Illinois  to  an  unrelated
     third party.  The Partnership received net sale proceeds  of
     $1,973,839,  which resulted in a net gain of  $851,215.   At
     the   time   of  sale,  the  cost  and  related  accumulated
     depreciation was $1,350,804 and $228,180, respectively.

     In  October 2005, the Partnership entered into an  agreement
     to  sell  its  50% interest in the Applebee's restaurant  in
     Stow,  Ohio  to an unrelated third party.  On  November  15,
     2005,  the  sale closed with the Partnership  receiving  net
     sale proceeds of $1,835,784, which resulted in a net gain of
     $310,234.   At  the  time  of sale,  the  cost  and  related
     accumulated   depreciation  was  $1,575,755   and   $50,205,
     respectively.

     In  May  2003, the Partnership entered into an agreement  to
     sell  a Taco Cabana restaurant in San Antonio, Texas to  the
     tenant.  The agreement was extended several times to  enable
     the  tenant  to  complete their due  diligence  and  certain
     negotiations with adjacent land owners.  During  this  time,
     the tenant continued to pay rent and complied with the lease
     obligations.  On January 26, 2006, the sale closed with  the
     Partnership receiving net sale proceeds of $1,642,624, which
     resulted  in a net gain of $484,970.  At the time  of  sale,
     the cost and related accumulated depreciation was $1,406,426
     and  $248,772,  respectively.  At  December  31,  2005,  the
     property was classified as Real Estate Held for Sale with  a
     book value of $1,157,654.

     In  May  2006, the Partnership entered into an agreement  to
     sell  the Children's World daycare center in Lenexa,  Kansas
     to  an  unrelated  third party.  On  August  14,  2006,  the
     Partnership  sale closed with the Partnership receiving  net
     sale  proceeds of $849,224, which resulted in a net gain  of
     $306,488.   At  the  time  of sale,  the  cost  and  related
     accumulated   depreciation  was   $983,527   and   $440,791,
     respectively.

     During  2006, the Partnership sold its 50% interest  in  the
     Jared Jewelry store in Lakewood, Colorado, in seven separate
     transactions,  to unrelated third parties.  The  Partnership
     received  total  net  sale  proceeds  of  $2,382,658,  which
     resulted  in  a net gain of $450,831.  The cost and  related
     accumulated   depreciation  of  the   interests   sold   was
     $2,017,633 and $85,806, respectively.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(6)  Discontinued Operations - (Continued)

     On  August  28,  2006, the Partnership sold  6.869%  of  the
     Eckerd drug store in Auburn, New York to an unrelated  third
     party.   The  Partnership  received  net  sale  proceeds  of
     $376,203, which resulted in a net gain of $76,398.  The cost
     and  related  accumulated depreciation of the interest  sold
     was $314,206 and $14,401, respectively.

     Subsequent  to  December 31, 2006, the Partnership  sold  an
     additional  7.8949% of the Eckerd drug store in Auburn,  New
     York,  in  two  separate transactions,  to  unrelated  third
     parties.   The Partnership received total net sale  proceeds
     of  approximately $402,000, which resulted in a net gain  of
     approximately  $57,400.   The cost and  related  accumulated
     depreciation of the interests sold was $361,134 and $16,552,
     respectively.   The Partnership is attempting  to  sell  its
     remaining  35.2361% interest in the property.   At  December
     31,  2006,  the property was classified as Real Estate  Held
     for Sale with a book value of $1,882,501.

     During 2006 and 2005, the Partnership distributed $7,890,117
     and  $5,473,401  of  net sale proceeds to  the  Limited  and
     General  Partners as part of their quarterly  distributions,
     which represented a return of capital of $411.41 and $283.44
     per Limited Partnership Unit, respectively.

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the years ended December 31:

                                                 2006         2005

     Rental Income                          $  517,215    $1,188,295
     Property Management Expenses               (4,931)      (14,829)
     Depreciation                              (96,398)     (217,965)
     Gain on Disposal of Real Estate         1,563,943     1,778,698
                                             ---------     ---------
       Income from Discontinued Operations  $1,979,829    $2,734,199
                                             =========     =========

(7)  Partners' Capital -

     Cash  distributions of $87,577 and $67,723 were made to  the
     General Partners and $8,670,043 and $6,704,595 were made  to
     the  Limited Partners for the years ended December 31,  2006
     and 2005, respectively.  The Limited Partners' distributions
     represent  $456.44 and $349.67 per Limited Partnership  Unit
     outstanding  using 18,995 and 19,174 weighted average  Units
     in 2006 and 2005, respectively.  The distributions represent
     $113.75  and $140.73 per Unit of Net Income and $342.69  and
     $208.94  per  Unit of return of capital in  2006  and  2005,
     respectively.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(7)  Partners' Capital - (Continued)

     As  part  of  the  Limited  Partner distributions  discussed
     above, the Partnership distributed $7,811,216 and $5,418,667
     of   proceeds  from  property  sales  in  2006   and   2005,
     respectively.    The  distributions  reduced   the   Limited
     Partners' Adjusted Capital Contributions.

     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  2006,  12 Limited Partners redeemed a total  of  126
     Partnership  Units  for  $75,266  in  accordance  with   the
     Partnership  Agreement.  During 2005,  28  Limited  Partners
     redeemed  a total of 261.25 Partnership Units for  $229,573.
     The  Partnership acquired these Units using  Net  Cash  Flow
     from  operations.   The redemptions increase  the  remaining
     Limited Partners' ownership interest in the Partnership.  As
     a  result of these redemption payments and pursuant  to  the
     Partnership   Agreement,  the  General   Partners   received
     distributions  of  $760  and  $2,319  in  2006   and   2005,
     respectively.

     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
     $337.75 per original $1,000 invested.

(8)  Income Taxes -

     The   following  is  a  reconciliation  of  net  income  for
     financial reporting purposes to income reported for  federal
     income tax purposes for the years ended December 31:

                                                        2006         2005

     Net  Income  for Financial Reporting Purposes  $2,321,777   $2,981,857

     Depreciation for Tax Purposes Under
       Depreciation  for Financial Reporting Purposes   11,477       25,983

     Income Accrued for Tax Purposes Over (Under)
       Income  for  Financial Reporting Purposes       (11,476)       4,825

     Gain on Sale of Real Estate for Tax Purposes
       Under  Gain  for Financial Reporting Purposes   (54,822)    (286,557)
                                                     ----------   ----------
           Taxable Income to Partners               $2,266,956   $2,726,108
                                                     ==========   ==========


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2006 AND 2005

(8)  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:
                                                          2006        2005

   Partners' Capital for Financial Reporting Purposes $ 4,516,869  $11,028,738

     Adjusted Tax Basis of Investments in Real Estate
      Over Net Investments in Real Estate
      for Financial Reporting Purposes                    133,454      176,799

     Income Accrued for Tax Purposes Over
       Income  for  Financial  Reporting  Purposes         33,242       44,717

     Syndication Costs Treated as Reduction
       of  Capital for Financial Reporting Purposes     3,336,442    3,336,442
                                                       ----------   ----------
     Partners' Capital for Tax Reporting Purposes     $ 8,020,007  $14,586,696
                                                       ==========   ==========

(9)  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:

                                    2006                 2005
                            Carrying     Fair     Carrying       Fair
                             Amount     Value      Amount        Value

     Money Market Funds  $3,208,225   $3,208,225  $4,707,199   $4,707,199
                          ---------    ---------   ---------    ---------
      Total Cash and
       Cash Equivalents  $3,208,225   $3,208,225  $4,707,199   $4,707,199
                          =========    =========   =========    =========

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
       ACCOUNTING AND FINANCIAL DISCLOSURE.

       None.

ITEM 8A.  CONTROLS AND PROCEDURES.

       (a) Evaluation of disclosure controls and procedures

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

       (b)  Changes in internal controls

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

ITEM 8B.  OTHER INFORMATION.

       None.


                            PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
       CONTROL PERSONS AND CORPORATE GOVERNANCE;
       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
manage  and  control the Partnership's affairs and  have  general
responsibility  and  the  ultimate  authority  in   all   matters
affecting  the Partnership's business.  The General Partners  are
AEI  Fund  Management  XVIII, Inc. (AFM),  the  Managing  General
Partner,   and  Robert  P.  Johnson,  Chief  Executive   Officer,
President  and  sole  director  of AFM,  the  Individual  General
Partner.   AFM  is  a  wholly  owned subsidiary  of  AEI  Capital
Corporation  of  which  Mr. Johnson is the majority  shareholder.
AFM  has only one senior financial executive, its Chief Financial
Officer.   The  Chief Financial Officer reports directly  to  Mr.
Johnson  and  is  accountable for his  actions  to  Mr.  Johnson.
Although Mr. Johnson and AFM require that all of their personnel,
including  the  Chief  Financial Officer, engage  in  honest  and
ethical  conduct,  ensure  full,  fair,  accurate,  timely,   and
understandable    disclosure,   comply   with   all    applicable
governmental  laws,  rules and regulations,  and  report  to  Mr.
Johnson   any  deviation  from  these  principles,  because   the
organization  is  composed of only approximately 35  individuals,
because  the  management of a partnership by an entity  that  has
different  interests in distributions and income  than  investors
involves numerous conflicts of interest that must be resolved  on
a  daily  basis, and because the ultimate decision maker  in  all
instances  is Mr. Johnson, AFM has not adopted a formal  code  of
conduct.   Instead,  the materials pursuant  to  which  investors
purchase Units disclose these conflicts of interest in detail and
Mr.  Johnson,  as  the  CEO and sole director  of  AFM,  resolves
conflicts  to  the  best  of  his ability,  consistent  with  his
fiduciary obligations to AFM and the fiduciary obligations of AFM
to  the  Partnership.  The director and officers of  AFM  are  as
follows:

        Robert  P.  Johnson, age 62, is Chief Executive  Officer,
President  and  sole director and has held these positions  since
the  formation of AFM in September 1988, and has been elected  to
continue  in these positions until December 2007.  From  1970  to
the  present, he has been employed exclusively in the  investment
industry,  specializing in 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 Securities, Inc., which is registered
with  the SEC 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 ten limited partnerships and a managing member in four LLCs.

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

        Patrick  W.  Keene,  age 47, is Chief Financial  Officer,
Treasurer  and  Secretary  and has  held  these  positions  since
January  22,  2003  and  has been elected to  continue  in  these
positions  until December 2007.  Mr. Keene has been  employed  by
AEI  Fund  Management, Inc. and affiliated entities  since  1987.
Prior  to being elected to the positions above, he was Controller
of  the various entities.  From 1982 to 1986, Mr. Keene was  with
KPMG  Peat  Marwick  Certified Public Accountants,  first  as  an
auditor and later as a tax manager.  Mr. Keene is responsible for
all accounting functions of AFM and the registrant.

       Since Mr. Johnson serves as the Individual General Partner
of  the Partnership, as well as the sole director of AFM, all  of
the  duties  that  might be assigned to an  audit  committee  are
assigned  to Mr. Johnson.  Mr. Johnson is not an audit  committee
financial expert, as defined.  As an officer and majority  owner,
through  a parent company, of AFM, and as the Individual  General
Partner, Mr. Johnson is not a "disinterested director" and may be
subject to a number of conflicts of interests in his capacity  as
sole director of AFM.

        Before the independent auditors are engaged, Mr. Johnson,
as the sole director of AFM, approves all audit-related fees, and
all permissible nonaudit fees, for services of our auditors.

Section 16(a) Beneficial Ownership Reporting Compliance

        Under federal securities laws, the directors and officers
of  the  General  Partner of the Partnership, and any  beneficial
owner  of  more than 10% of a class of equity securities  of  the
Partnership,  are  required  to report  their  ownership  of  the
Partnership's equity securities and any changes in such ownership
to  the  Securities  and Exchange Commission (the  "Commission").
Specific due dates for these reports have been established by the
Commission, and the Partnership is required to disclose  in  this
Annual Report on 10-KSB any delinquent filing of such reports and
any  failure  to file such reports during the fiscal  year  ended
December  31, 2006.  Based upon information provided by  officers
and directors of the General Partner, all officers, directors and
10% owners filed all reports on a timely basis in the 2006 fiscal
year.

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, property management and
property  sales services.  The amount and nature of such payments
are detailed in Item 12 of this annual report on Form 10-KSB.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
       MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

        The following table sets forth information pertaining  to
the   ownership  of  the  Units  by  each  person  known  by  the
Partnership to beneficially own 5% or more of the Units, by  each
General  Partner, and by each officer or director of the Managing
General Partner as of February 28, 2007:

     Name and Address                   Number of     Percent
   of Beneficial Owner                  Units Held    of Class

   AEI Fund Management XVIII, Inc.          0          0.00%
   Robert P. Johnson                        5          0.03%
   Patrick W. Keene                         0          0.00%

   Address for all:
   1300 Wells Fargo Place
   30 East 7th Street, St. Paul, Minnesota 55101

The  persons  set forth in the preceding table hold  sole  voting
power  and power of disposition with respect to all of the  Units
set forth opposite their names.  The General Partners know of  no
holders of more than 5% of the outstanding Units.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
       DIRECTOR INDEPENDENCE.

        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.   Reference  is  made to  Note  3  of  the  Financial
Statements,   as  presented,  and  is  incorporated   herein   by
reference,  for  details of related party  transactions  for  the
years ended December 31, 2006 and 2005.

        Neither the registrant, nor the Managing General  Partner
of  the  registrant, has a board of directors consisting  of  any
members who are "independent."  The sole director of the Managing
General  Partner,  Robert  P. Johnson,  is  also  the  Individual
General  Partner  of the registrant, and is the  Chief  Executive
Officer,  and  indirectly the principal owner,  of  the  Managing
General  Partner.  Accordingly, there is no disinterested  board,
or   other   functioning   body,  that  reviews   related   party
transactions, or the transactions between the registrant and  the
General  Partners,  except as performed in  connection  with  the
audit of its financial statements.

        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 by the Partnership, (ii) the  cumulative
property management fees allowed by the Guidelines but not  paid,
(iii)  any real estate commission allowed by the Guidelines,  and
(iv)  10%  of  Net  Cash  Flow less the Net  Cash  Flow  actually
distributed to the General Partners.  The administrative expenses
not  allowed under the Guidelines include a controlling  person's
salary  and  fringe  benefits,  rent  and  depreciation.   As  of
December  31, 2006, the cumulative reimbursements to the  General
Partners and their affiliates did not exceed those amounts.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
       DIRECTOR INDEPENDENCE.  (Continued)

        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, 2006.
                                                         Amount Incurred
Person or Entity                                          From Inception
 Receiving                 Form and Method           (September 20, 1988) to
Compensation               of Compensation              December 31, 2006

AEI Securities, Inc.  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 and  Reimbursement at Cost for other        $1,064,137
Affiliates            Organization and Offering Costs.

General Partners and  Reimbursement at Cost for all          $  642,892
Affiliates            Acquisition Expenses.

General Partners and  Reimbursement at Cost for all          $4,184,825
Affiliates            Administrative Expenses attributable
                      to the Fund, including all expenses
                      related to management of the Fund's
                      properties and all other transfer agency,
                      reporting, partner relations and other
                      administrative functions.

General Partners and  Reimbursement at Cost for all expenses $  917,309
Affiliates            related to the disposition of the
                      Fund's properties.

General Partners      1% of Net Cash Flow in any fiscal year $  263,358
                      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      15% of distributions of Net Proceeds   $  165,457
                      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.


                             PART IV

ITEM 13.    EXHIBITS.

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

     10.1  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 July 27, 1992).

     10.2  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 July 27, 1992).

     10.3  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 March 29, 1993).

     10.4  Net  Lease Agreement dated April 13, 1998 between  the
     Partnership, AEI Net Lease Income & Growth Fund XIX  Limited
     Partnership,   Robert  P.  Johnson,  and   Tumbleweed,   LLC
     relating  to  the  Property  at 1150  North  Bridge  Street,
     Chillicothe,  Ohio  (incorporated by  reference  to  Exhibit
     10.2 of Form 10-QSB filed May 15, 1998).

     10.5  First Amendment to Net Lease Agreement dated  November
     20,  1998  between the Partnership, AEI Net Lease  Income  &
     Growth  Fund XIX Limited Partnership, Robert P. Johnson  and
     Tumbleweed,  LLC  relating to the  Property  at  1150  North
     Bridge  Street, Chillicothe, Ohio (incorporated by reference
     to Exhibit 10.70 of Form 10-KSB filed March 30, 1999).

     10.6  Assignment and Assumption of Lease dated May 10,  2004
     between the Partnership, AEI Net Lease Income & Growth  Fund
     XIX  Limited  Partnership and Grant  Ave.  &  Standard  Ave.
     Development,  LLC  relating to the  Property  at  157  Grant
     Avenue,  Auburn,  New  York (incorporated  by  reference  to
     Exhibit 10.2 of Form 8-K filed May 24, 2004).

     10.7  Purchase  Agreement dated August 4, 2005  between  the
     Partnership  and  Young M. Won relating to the  Property  at
     North    Avenue   and   Wolf   Road,   Northlake,   Illinois
     (incorporated  by  reference to Exhibit  10.1  of  Form  8-K
     filed October 24, 2005).

     10.8  Purchase Agreement dated October 19, 2005 between  the
     Partnership, AEI Net Lease Income & Growth Fund XIX  Limited
     Partnership  and  KOE LLC relating to the Property  at  4296
     Kent  Road, Stow, Ohio (incorporated by reference to Exhibit
     10.2 of Form 10-QSB filed November 14, 2005).

     10.9  Twelfth Amendment to Purchase Agreement dated December
     16,  2005 between the Partnership and Texas Taco Cabana,  LP
     relating  to  the  Property at 7339 San  Pedro  Avenue,  San
     Antonio,  Texas (incorporated by reference to  Exhibit  10.3
     of Form 8-K filed February 1, 2006).

     10.10     Purchase Agreement dated May 24, 2006 between  the
     Partnership   and  Shamrock  Real  Estate  #1,  Incorporated
     relating  to  the Property at 8555 Monrovia, Lenexa,  Kansas
     (incorporated  by reference to Exhibit 10.1 of  Form  10-QSB
     filed August 11, 2006).

     10.11      Contract  of Sale dated August 17,  2006  between
     the  Partnership, various other property owners and  Compson
     Holding  Corporation  relating  to  the  Property  at  16778
     Interstate    45    South,   Conroe    (Woodlands),    Texas
     (incorporated  by reference to Exhibit 10.1 of  Form  10-QSB
     filed November 8, 2006).

ITEM 13.    EXHIBITS.  (Continued)

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

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

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

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

        The  following  is a summary of the fees  billed  to  the
Partnership  by  Boulay, Heutmaker, Zibell  &  Co.  P.L.L.P.  for
professional  services rendered for the years ended December  31,
2006 and 2005:

     Fee Category                            2006       2005

     Audit Fees                           $  13,650   $ 12,750
     Audit-Related Fees                           0        218
     Tax Fees                                     0          0
     All Other Fees                               0          0
                                           --------    -------
          Total Fees                      $  13,650   $ 12,968
                                           ========    =======

Audit  Fees  - Consists of fees billed for professional  services
rendered  for  the  audit of the Partnership's  annual  financial
statements   and  review  of  the  interim  financial  statements
included  in  quarterly reports, and services that  are  normally
provided   by  Boulay,  Heutmaker,  Zibell  &  Co.  P.L.L.P.   in
connection with statutory and regulatory filings or engagements.

Audit-Related  Fees - Consists of fees billed for  assurance  and
related  services that are reasonably related to the  performance
of  the  audit  or  review of financial statements  and  are  not
reported under "Audit Fees." These services include consultations
concerning financial accounting and reporting standards.

Tax  Fees - Consists of fees billed for professional services for
federal and state tax compliance, tax advice and tax planning.

All Other Fees - Consists of fees for products and services other
than the services reported above.


Policy   for  Preapproval  of  Audit  and  Permissible  Non-Audit
Services of Independent Auditors

        Before  the  Independent  Auditors  are  engaged  by  the
Partnership to render audit or non-audit services, the engagement
is  approved  by  Mr.  Johnson acting as the Partnership's  audit
committee.


                           SIGNATURES

        In  accordance with Section 13 or 15(d) of  the  Exchange
Act, the registrant 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 23, 2007             By: /s/ Robert P Johnson
                                   Robert P. Johnson, President and Director
                                   (Principal Executive Officer)


        In accordance with the Exchange Act, 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 23, 2007
    Robert P. Johnson and Sole Director of Managing General
                      Partner

/s/ Patrick W Keene   Chief Financial Officer  and  Treasurer  March 23, 2007
    Patrick W. Keene  (Principal Accounting Officer)