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

                       -----------------------------------

                                    FORM 10-Q
(Mark One)

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

          For the quarterly period ended                 March 31, 2001
                                         ---------------------------------------

                                       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 identification no.)
incorporation or organization

One Beacon Street, Boston, Massachusetts                      02108
---------------------------------------------    -------------------------------
(Address of principal executive                             (Zip code)
offices)

                                 (617) 523-7722
--------------------------------------------------------------------------------
              (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  preceeding 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|_|



The total number of pages in this document is 10.








<PAGE>



Item 1.  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

                                     ASSETS

<TABLE>
<CAPTION>
                                                    (Unaudited)
                                                     March 31,     December 31,
                                                       2001            2000
                                                   ------------    ------------
<S>                                                <C>             <C>
Multi-family apartment communities, net of
 accumulated depreciation of $16,002,001 and
 $15,671,250, respectively                         $  7,508,260    $  7,766,297
Cash and cash equivalents                               300,894         456,851
Cash restricted for tenant security deposits             27,993          27,800
Replacement reserve escrow                               64,443          56,043
Due from affiliates                                      28,062          31,115
Prepaid expenses and other assets                       322,681         476,014
Investment in securities (Note 3)                        65,340          65,340
Deferred expenses, net of accumulated amortization
 of $219,670 and $210,020, respectively                  95,982         105,632

                                                   ------------    ------------
         Total assets                              $  8,413,655    $  8,985,092
                                                   ============    ============

                        LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
  Mortgage notes payable                           $ 10,077,881    $ 10,107,446
  Accrued expenses and other liabilities                613,347         717,537

                                                   ------------    ------------
      Total liabilities                              10,691,228      10,824,983

Partners' deficit (Note 2):
  Investor Limited Partners
   (27,184 units outstanding)                        (1,354,649)       (946,178)
  Original Limited Partner                             (592,006)       (569,931)
  General Partners                                     (330,918)       (323,782)

                                                   ------------    ------------
      Total partners' deficit                        (2,277,573)     (1,839,891)

                                                   ------------    ------------
         Total liabilities and partners' deficit   $  8,413,655    $  8,985,092
                                                   ============    ============
</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

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    For the Three Months Ended
                                                             March 31,
                                                    --------------------------
                                                        2001           2000
                                                    -----------    -----------
<S>                                                 <C>            <C>

Revenue:
     Rental                                         $ 1,058,303    $ 1,035,012
     Interest income                                      3,369          4,810

                                                    -----------    -----------
         Total revenue                                1,061,672      1,039,822
                                                    -----------    -----------
Expenses:
     Operating (Note 5)                                 299,525        246,781
     Maintenance                                         87,447         64,614
     Real estate taxes                                  108,003        110,757
     General and administrative (Note 5)                 99,819         34,881
     Management fees (Note 5)                            47,112         54,922
     Depreciation and amortization                      340,401        354,534
     Interest                                           241,109        218,456

                                                    -----------    -----------
         Total expenses                               1,223,416      1,084,945

                                                    -----------    -----------
Net loss                                            $  (161,744)   $   (45,123)
                                                    ===========    ===========

Allocation of net loss:

     Investor Limited Partners
      (27,184 units outstanding):
         Net loss                                   $  (160,127)   $   (44,672)
                                                    ===========    ===========

     Investor Limited Partners,
       Per Unit:
         Net loss                                   $     (5.89)   $     (1.64)
                                                    ===========    ===========

     Original Limited Partner:
         Net loss                                   $       -      $       -
                                                    ===========    ===========

     General Partners:
         Net loss                                   $    (1,617)   $      (451)
                                                    ===========    ===========
</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

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      For the Three Months Ended
                                                               March 31,
                                                      -------------------------
                                                          2001          2000
                                                      -----------    ----------
<S>                                                   <C>            <C>

Cash flows from operating activities:
     Net loss                                         $  (161,744)   $  (45,123)
     Adjustment to reconcile net loss to net
      cash provided by operating activities:
       Interest earned on replacement reserve escrow         -             (179)
       Depreciation and amortization                      340,401       354,534
     Changes in assets and liabilities:
       Increase in restricted cash for tenant securit        (193)         (148)
       Decrease in prepaid expenses and other assets      156,386       234,418
       Decrease in accrued expenses and other liabili    (104,190)     (120,510)

                                                      -----------    ----------
         Net cash provided by operating activities        230,660       422,992
                                                      -----------    ----------

Cash flows from investing activities:
     Deposits to replacement reserve escrow                (8,400)      (12,600)
     Withdrawals from replacement reserve escrow             -           67,522
     Additions to fixed assets                            (72,714)      (86,111)
     Decrease in accrued expenses and other liabilities
      related to fixed assets additions                      -           (2,204)

                                                      -----------    ----------
         Net cash used in investing activities            (81,114)      (33,393)
                                                      -----------    ----------

Cash flows from financing activities:
     Principal payments on mortgage notes payable         (29,565)      (27,255)
     Distributions                                       (275,938)     (276,029)

                                                      -----------    ----------
         Net cash used in financing activities           (305,503)     (303,284)
                                                      -----------    ----------

Net (decrease) increase in cash and cash equivalents     (155,957)       86,315

Cash and cash equivalents, beginning of period            456,851       120,525

                                                      -----------    ----------
Cash and cash equivalents, end of period              $   300,894    $  206,840
                                                      ===========    ==========

</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
     principals  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, 2000 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 March 31, 2001 and
     its results of  operation  and cash flows for the three  months ended March
     31, 2001 and 2000.

     The results of operations for the three months ended March 31, 2001 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' Deficit

     A summary of changes in Partners'  deficit for the three months ended March
     31, 2001 is as follows:

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

<S>                    <C>            <C>            <C>            <C>
Balance at
 December 31, 2000     $  (946,178)   $  (569,931)   $  (323,782)   $(1,839,891)

Net loss                  (160,127)          --           (1,617)      (161,744)

Distributions             (248,344)       (22,075)        (5,519)      (275,938)

                       -----------    -----------    -----------    -----------
Balance at
 March 31, 2001        $(1,354,649)   $  (592,006)   $  (330,918)   $(2,277,573)
                       ===========    ===========    ===========    ===========
</TABLE>




(3)  Investment in Securities

     On October 5, 2000,  the  Partnership,  as a member of an alliance of major
     multi-family  real  estate  companies,  executed a master  lease  agreement
     ("MLA") with a provider of high-speed internet, video and voice services to
     multi-family communities.  Pursuant to the MLA, the Partnership granted the
     provider  preferred  lease,  license  and  access  rights to  provide  data
     services,  consisting of  high-speed  broadband  internet  access and video
     services,  to the residents at some of its  multi-family  communities for a
     ten-year  period.  In exchange for these rights,  the Partnership  received
     250,843  shares of common  stock  which were  valued at $.2285 per share or
     $57,341.  In  addition,  the  Partnership  will  receive  7.5% of the gross
     revenues that the provider obtains from providing its services as well as a
     fixed amount for each  resident that  executes a subscriber  agreement.  In
     conjunction  with  the  execution  of the  MLA,  the  Partnership  made  an
     investment  of $5,751 in exchange  for 25,164  additional  shares of common
     stock  also  valued  at  $.2285  per  share.   The   Partnership   incurred
     approximately  $2,248 in closing  costs related to the  acquisition  by the
     Partnership  and the closing costs  incurred were recorded as an investment
     in securities in the financial statements as of December 31, 2000.

(4)  Mortgage Notes Payable

     On April 27, 2001, the General  Partners signed an agreement  extending the
     mortgage  notes payable on Windsor  Apartments,  under the original  terms,
     until May 1, 2002.  The  Partnership  paid an extension  fee of $24,962 for
     this privilege.

(5)  Related Party Transactions

     The  Partnership  pays  property  management  fees to an  affiliate  of the
     General  Partners  for  management  services.  Pursuant  to the  management
     agreements,  management  fees are payable  monthly at a rate of 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 administrative expenses.

     Amounts  accrued  or  paid  to the  General  Partners'  affiliates  were as
     follows:

<TABLE>
<CAPTION>
                                           For the Three Months Ended
                                                   March 31,
                                        --------------------------------
                                              2001             2000
                                        ---------------  ---------------
<S>                                     <C>              <C>
         Property management fees       $        47,112  $        54,922

         Expenses reimbursement                 117,687           41,734

                                        ---------------  ---------------
            Charged to operations       $       164,799  $        96,656
                                        ===============  ===============
</TABLE>


     Expense  reimbursements  due from  affiliates  of $28,062 and $31,115  were
     included in due from  affiliates  at March 31, 2001 and  December 31, 2000,
     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  improvements,  debt service and other 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.

     Over the past several years,  real estate markets in general have improved,
     and the  General  Partners  feel it is an  opportune  time to  formulate  a
     liquidation  strategy for the  Partnership.  As previously  disclosed,  the
     General  Partners have begun the process of more  thoroughly  assessing the
     real estate sales market in the Partnership's market areas and developing a
     disposition  strategy  which  will  yield the  highest  value to  investors
     through an efficient and orderly liquidation of the Partnership. In keeping
     with this  strategy,  the General  Partners  have  extended the term of the
     mortgage loan which would have matured in the next 2 months with  financing
     that leaves flexibility for the property sales.

     Assuming market conditions do not change, the assessment of the real estate
     sales market is consistent with the General Partners' expectations,  and an
     acceptable disposition plan can be implemented, the General Partners expect
     to complete the liquidation process over the next 12 months. However, there
     can be no assurance that such a liquidation will occur, or what amounts may
     be realized by the Partnership.

     On April 27, 2001, the General  Partners signed an agreement  extending the
     mortgage  notes payable on Windsor  Apartments,  under the original  terms,
     until May 1, 2002.  The  Partnership  paid an extension  fee of $24,962 for
     this privilege.

     The General  Partners,  on an ongoing basis,  assess the current and future
     liquidity needs in determining  the level of working  capital  reserves the
     Partnership  should maintain.  Adjustments to  distributions  are made when
     appropriate to reflect such  assessment.  The current  annual  distribution
     rate is $18.28 per Investor Limited Partner Unit, and is paid semi-annually
     in February and August.

     Operations

     The following  discussion  relates to the operations of the Partnership and
     its properties  (Courtyards  Village and Windsor  Apartments) for the three
     months ended March 31, 2001 and 2000.

     Net loss  increased  during  the three  months  ended  March 31,  2001 when
     compared to same period in 2000, as the increase in total expenses exceeded
     the increase in total revenue.  The increase in total revenue was primarily
     a result of rental rate increases  implemented at all of the  Partnership's
     properties at the end of the first quarter of 2000.
<PAGE>
             KRUPP REALTY LIMITED PARTNERSHIP - VII AND SUBSIDIARIES

     Total  expenses for the three months  ended March 31, 2001  increased  when
     compared to the three  months  ended  March 31,  2000.  Operating  expenses
     increased  as a result of  increases  in  payroll,  utilities  and  rubbish
     removal costs. Maintenance expenses increased due to increases in recurring
     repair and  maintenance  costs.  General and  administrative  expenses also
     increased  as a  result  of  increases  in  investor  communications  costs
     including  the annual  look-back  adjustment  which  totaled  approximately
     $43,000.  Depreciation expense decreased as fixed asset additions purchased
     in the previous years became fully depreciated.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


     The Partnership's  future earnings,  cash flows and fair values relevant to
     financial  instruments  are dependent upon prevalent  market rates.  Market
     risk is the risk of loss from adverse changes in market prices and interest
     rates. The Partnership  manages its market risk by matching  projected cash
     inflows from  operating  activities,  investing  activities  and  financing
     activities   with   projected   cash   outflows  to  fund  debt   payments,
     acquisitions,   capital   expenditures,   distributions   and  other   cash
     requirements.  All of the  Partnership's  debt  (maturing at various  times
     through 2007) has a fixed interest rate,  which minimizes the interest rate
     risk.

     A detailed  analysis of quantitative and qualitative  market risk exposures
     was provided in the in the Partnership's Annual Report on Form 10-K for the
     year ended December 31, 2000. There have been no material changes in market
     risk subsequent to that date



<PAGE>


                           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 it's  behalf by the
undersigned, thereunto duly authorized.

                                            Krupp Realty Limited Partnership-VII
                                            ------------------------------------
                                                     (Registrant)

                                       BY:  /s/ David C. Quade
                                            ------------------------------------
                                            David C. Quade
                                            Treasurer  (Principal Financial and
                                             Accounting Officer) of The Krupp
                                             Corporation, a General Partner


DATE:  May 15, 2001