UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C. 20549
                                   

                             FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended    September 30, 1996

                                    OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from                         to                    

              Commission file number          0-14377        

                   Krupp Realty Limited Partnership-VII

           Massachusetts                            04-2842924
(State or other jurisdiction of                      (IRS employer
incorporation or organization)                       identification no.)

470 Atlantic Avenue, Boston, Massachusetts                       02210
(Address of principal executive offices)                       (Zip Code)


                              (617) 423-2233
           (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes   X    No      
<PAGE>

                      PART I.  FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  Actual results could differ materially from those
projected in the forward-looking statements as a result of a number of
factors, including those identified herein.

           KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES
                                     
                        CONSOLIDATED BALANCE SHEETS
                                           

<TABLE>
<CAPTION>
                                  ASSETS

                                                 September 30, December 31,
                                                        1996          1995    

<S>                                              <C>           <C>
Multi-family apartment complexes, net of
  accumulated depreciation of $10,182,384,
  and $9,521,601, respectively                   $ 8,828,868   $ 9,030,289
Retail center, net of accumulated
  depreciation of $3,578,549, and
  $3,285,620, respectively                         6,129,236     6,376,225

     Total real estate assets                     14,958,104    15,406,514

Cash and cash equivalents                          1,052,362     1,311,037
Cash restricted for tenant security deposits          37,611        35,979
Cash restricted for capital improvements              52,364        57,462
Prepaid expenses and other assets                    548,354       568,775
Deferred expenses, net of accumulated
  amortization of $82,411 and $55,514,
  respectively                                       204,883       231,780

     Total assets                                $16,853,678   $17,611,547



                      LIABILITIES AND PARTNERS' EQUITY

Mortgage notes payable                           $12,609,054   $12,744,191
Accounts payable                                       1,566        48,530
Accrued expenses and other liabilities               807,598       785,672

     Total liabilities                            13,418,218    13,578,393

Partners' equity (deficit) (Note 2):             

  Investor Limited Partners (27,184 Units
     outstanding)                                  4,064,108     4,602,033
  Original Limited Partner                          (380,968)     (333,153)
  General Partners                                  (247,680)     (235,726)

     Total Partners' equity                        3,435,460     4,033,154

     Total liabilities and Partners' equity      $16,853,678   $17,611,547

</TABLE>
                  The accompanying notes are an integral
              part of the consolidated financial statements.
<PAGE>
           KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                           
<TABLE>
<CAPTION>
                              For the Three Months     For the Nine Months
                              Ended September 30,      Ended September 30, 
                               1996        1995         1996        1995   
<S>                         <C>         <C>          <C>         <C>
Revenue:
  Rental                    $1,148,701  $1,132,319   $3,435,862  $3,344,272
  Interest income               17,290      18,274       56,859      48,113

        Total revenue        1,165,991   1,150,593    3,492,721   3,392,385

Expenses:
  Operating (Note 3)           300,572     290,888      870,776     770,685  
  Maintenance                  101,056     125,375      253,056     256,627
  Real estate taxes            130,056     106,905      352,612     329,217
  General and administrative
     (Note 3)                   19,920      50,636       56,622     100,213
  Management fees (Note 3)      45,526      50,855      143,483     146,860
  Depreciation and
     amortization              343,170     321,868      980,609     952,101
  Interest                     275,480     279,137      829,168     839,924  
  
        Total expenses       1,215,780   1,225,664    3,486,326   3,395,627
  
Net income (loss)           $  (49,789) $  (75,071)  $    6,395  $   (3,242)

Allocation of net income(loss)
  (Note 2):

  Investor Limited Partners
     (27,184 Units
      outstanding)          $  (49,291) $  (74,320)  $    5,755  $   (3,210)

  Per Unit of Investor 
     Limited Partner
     Interest               $    (1.81) $    (2.73)  $      .21  $     (.12)

  Original Limited Partner  $    -      $     -      $      512  $     -    

  General Partners          $     (498) $     (751)  $      128  $      (32)
  
</TABLE>
                     The accompanying notes are an integral
                 part of the consolidated financial statements.
<PAGE>
           KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              
<TABLE>
<CAPTION>
                                                      For the Nine Months
                                                      Ended September 30, 
                                                       1996        1995   
<S>                                                 <C>        <C>
Operating activities:
  Net income (loss)                                 $    6,395 $   (3,242)
  Adjustments to reconcile net income (loss)
     to net cash provided by operating activities:
        Depreciation and amortization                  980,609    952,101
        Decrease (increase) in cash restricted                          
           for tenant security deposits                 (1,632)    20,236
        Decrease in prepaid expenses and other
           assets                                       20,421      2,292 
        Decrease in accounts payable                   (46,964)   (15,305)
        Increase (decrease) in accrued expenses
           and other liabilities                        21,926    (41,250)

              Net cash provided by operating 
                 activities                            980,755    914,832

Investing activities:
  Additions to fixed assets                           (505,302)  (154,356)
  Decrease (increase) in cash restricted for
     capital improvements                                5,098     (5,430)

              Net cash used in investing
                 activities                           (500,204)  (159,786)

Financing activities:
  Increase in deferred expenses                           -        (6,613) 
  Principal payments on mortgage notes payable        (135,137)  (124,697)
  Distributions                                       (604,089)  (604,088)
              Net cash used in financing
                 activities                           (739,226)  (735,398)

Net increase (decrease) in cash and cash equivalents  (258,675)    19,648

Cash and cash equivalents, beginning of period       1,311,037  1,021,464

Cash and cash equivalents, end of period            $1,052,362 $1,041,112
                 
</TABLE>

                  The accompanying notes are an integral
              part of the consolidated financial statements.
<PAGE>
           KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                          

1. Accounting Policies

  Certain information and footnote disclosures normally included in financial
  statements prepared in accordance with generally accepted accounting
  principles have been condensed or omitted in this report on Form 10-Q
  pursuant to the Rules and Regulations of the Securities and Exchange
  Commission.  In the opinion of the General Partners of Krupp Realty Limited
  Partnership-VII and Subsidiaries (the "Partnership"), the disclosures
  contained in this report are adequate to make the information presented not
  misleading.  See Notes to the Consolidated Financial Statements included in
  the Partnership's Annual Report on Form 10-K for the year ended December
  31, 1995 for additional information relevant to significant accounting
  policies followed by the Partnership.  

  In the opinion of the General Partners of the Partnership, the accompanying
  unaudited consolidated financial statements reflect all adjustments
  (consisting of only normal recurring accruals) necessary to present fairly
  the Partnership's consolidated financial position as of September 30, 1996,
  its results of operations for the three and nine months ended September 30,
  1996 and 1995, and its cash flows for the nine months ended September 30,
  1996 and 1995.  Certain prior period balances have been reclassified to
  conform with current period consolidated financial statement presentation.

  The results of operations for the three and nine months ended September 30,
  1996 are not necessarily indicative of the results which may be expected
  for the full year.  See Management's Discussion and Analysis of Financial
  Condition and Results of Operations included in this report.    

2.Changes in Partners' Equity

  A summary of changes in Partners' equity (deficit) for the nine months
  ended September 30, 1996 is as follows:

<TABLE>
<CAPTION>
                            Investor     Original                  Total
                            Limited      Limited     General      Partners'
                            Partners     Partner     Partners     Equity  

     <S>                   <C>          <C>         <C>         <C>
     Balance at
        December 31, 1995  $4,602,033   $(333,153)  $(235,726)  $4,033,154

     Distributions           (543,680)    (48,327)    (12,082)    (604,089)
     
     Net income                 5,755         512         128        6,395

     Balance at
        September 30, 1996 $4,064,108   $(380,968)  $(247,680)  $3,435,460
</TABLE>
3. Related Party Transactions

  Commencing with the date of acquisition of the Partnership's properties,
  the Partnership entered into agreements under which property management
  fees are paid to an affiliate of the General Partners for services as
  management agent.  Such agreements provide for management fees payable
  monthly at a rate of 4% of the gross receipts, net of leasing commissions,
  from the commercial properties under management and 5% of gross receipts
  from residential properties under management.  The Partnership also
  reimburses affiliates of the General Partners for certain expenses incurred
  in connection with the operation of the Partnership and its properties
  including accounting, computer, insurance, travel, legal and payroll; and
  with the preparation and mailing of reports and other communications to the
  Limited Partners.

   Amounts accrued or paid to the General Partners or their affiliates are as
   follows:
<TABLE>
<CAPTION>
                                   For the Three Months  For the Nine Months
                                    Ended September 30,   Ended September 30,
                                     1996        1995       1996        1995  


      <S>                          <C>         <C>        <C>        <C>
      Property management fees     $45,526     $ 50,855   $143,483   $146,860
      Expense reimbursements        36,521       40,332    107,310     103,732

         Charged to operations     $82,047     $ 91,187   $250,793    $250,592

</TABLE>
   In addition to the amounts above, refinancing and disposition costs of $0
   and $3,793 were paid to the General Partners or their affiliates at
   September 30, 1996 and December 31, 1995, respectively.

<PAGE>
             KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES
                                            

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results
of Operations contains forward-looking statements including those concerning
Management's expectations regarding the future financial performance and
future events.  These forward-looking statements involve significant risk and
uncertainties, including those described herein.  Actual results may differ
materially from those anticipated by such forward-looking statements.

Liquidity and Capital Resources

The Partnership's ability to generate cash adequate to meet its needs is
dependent primarily upon the successful operations of its real estate
investments.  Such ability would also be impacted by the future availability
of bank borrowings and the future refinancing and sale of the Partnership's
remaining real estate investments.  These sources of liquidity will be used by
the Partnership for payment of expenses related to real estate operations,
capital expenditures, debt service and expenses.  Cash Flow, if any, as
calculated under Section 8.2(a) of the Partnership Agreement, will then be
available for distribution to the Partners.  In 1994, the General Partners
determined that there was sufficient cash flow to reinstate semi-annual
distributions.  These distributions commenced in August 1994 at a rate of
$5.00 per Unit and increased in February 1995 to an annual rate of $20.00 per
Unit.

In 1996, Courtyards Village, Nora Corners and Windsor Apartments anticipate
capital improvement  expenditures totaling approximately $281,000, $111,000
and $337,000, respectively.  The General Partners believe these improvements
will improve the appearance of the properties and allow them to remain
competitive in their respective real estate markets.

Cash Flow

Shown below, as required by the Partnership Agreement, is the calculation of
Cash Flow of the Partnership for the nine months ended September 30, 1996. 
The General Partners provide certain of the information below to meet
requirements of the Partnership Agreement and because they believe that it is
an appropriate supplemental measure of operating performance.  However, Cash
Flow should not be considered by the reader as a substitute to net income
(loss), as an indicator of the Partnership's operating performance or to cash
flows as a measure of liquidity. 
<TABLE>
<CAPTION>
                                                     Rounded to $1,000

      <S>                                                <C>
      Net loss for tax purposes                          $  (21,000)
      Items not requiring or (requiring) the use of
         operating funds:
            Tax basis depreciation and amortization       1,010,000
            Principal payments on mortgage notes payable   (135,000)
            Expenditures for capital improvements          (505,000)
            Releases from working capital reserves          255,000
         
      Cash Flow                                          $  604,000
                                       
</TABLE>

Operations

Cash Flow for the nine months ended September 30, 1996, before additions to
working capital reserves, decreased as compared to the same period in 1995 due
primarily to increased capital improvements at Windsor Apartments and
Courtyards Village for exterior painting in 1996.  Overall, net income (loss)
improved for the three and nine months ended September 30, 1996 as compared to
the same periods in 1995.  Total revenue increased while total expenses
remained relatively stable during the quarter ended September 30, 1996 as
compared to the same period in 1995.  During the nine month period ended
September 30, 1996,  the increase in revenue more than offset the increase in
total expenses when compared to the same period in 1995.  The increases in
revenue are due to increased rental rates at Courtyards Village and Windsor
Apartments as these properties continue to enjoy strong market conditions and
steady occupancy in 1996.
 
Although total expenses remained relatively stable for the third quarter of
1996 as compared to the same period in 1995, maintenance and real estate tax
expenses decreased and increased, respectively.  Maintenance expense decreased
as landscaping, parking lot and exterior building improvements were
implemented at Courtyards Village and Windsor Apartments in the third quarter
of 1995.  These improvements enhanced the appearance of the properties and
will help them remain competitive in their respective markets.  Real estate
taxes increased as a result of a reassessment of Windsor Apartments in 1996 by
the local taxing authority.

During the first nine months of 1996, total expenses increased when compared
to the first nine months of 1995.  This increase is attributable to a rise in
both  operating and real estate tax expenses.  Operating expense increased as
utility consumption increased due to severe weather conditions in the Chicago
area during the first quarter of 1996.  Additionally, operating expense
increased as a result of prior years' insurance refunds received in the second
quarter of 1995.  Real estate taxes increased for the same reason as discussed
above.                 

General

In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
which is effective for fiscal years beginning after December 15, 1995, the
Partnership has implemented policies and practices for assessing impairment of
its real estate assets.

The investments in properties are carried at cost less accumulated
depreciation unless the General Partners believe there is a significant
impairment in value, in which case a provision to write down investments in
properties to fair value will be charged against income.  At this time, the
General Partners do not believe that any assets of the Partnership are
significantly impaired.

<PAGE>
             KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                          PART II - OTHER INFORMATION
                                             

Item 1.  Legal Proceedings
         Response:  None

Item 2.  Changes in Securities
         Response:  None

Item 3.  Defaults upon Senior Securities
         Response:  None

Item 4.  Submission of Matters to a Vote of Security Holders
         Response:  None

Item 5.  Other Information
         Response:  None

Item 6.  Exhibits and Reports on Form 8-K
         Response:  None

<PAGE>

                                   SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                    Krupp Realty Limited Partnership-VII
                                                (Registrant)


                                    BY: /s/Robert A. Barrows                 

                                        Robert A. Barrows   
                                        Treasurer and Chief Accounting
                                        Officer of the Krupp Corporation, a
                                        General Partner.



DATE: November 5, 1996