PART I. FINANCIAL INFORMATION


                                  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              June 30, 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 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  |_|



The total number of pages in this document is 10.









                                       1
<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)
                                                     June 30,      December 31,
                                                       2001            2000
                                                   ------------    ------------

<S>                                                <C>             <C>
Multi-family apartment communities, net of
 accumulated depreciation of $7,975,323 and
 $15,671,250, respectively                         $  3,737,374    $  7,766,297
Multi-family apartment communities available for
 sale (Note 6)                                        3,650,276            -
Cash and cash equivalents                               246,635         456,851
Cash restricted for tenant security deposits             28,022          27,800
Replacement reserve escrow                               77,043          56,043
Due from affiliates (Note 5)                             45,234          31,115
Prepaid expenses and other assets (Note 1)              327,235         476,014
Investment in securities (Note 2)                        65,340          65,340
Deferred expenses, net of accumulated amortization
 of $223,467 and $210,020, respectively                  92,185         105,632

                                                   ------------    ------------
Total assets                                       $  8,269,344    $  8,985,092
                                                   ============    ============

LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
Mortgage notes payable (Note 3)                    $ 10,047,550    $ 10,107,446
Accrued expenses and other liabilities                  621,134         717,537

                                                   ------------    ------------
Total liabilities                                    10,668,684      10,824,983

Partners' deficit (Note 4):
Investor Limited Partners (27,184 units
 outstanding)                                        (1,475,198)       (946,178)
Original Limited Partner                               (592,006)       (569,931)
General Partners                                       (332,136)       (323,782)

                                                   ------------    ------------
Total partners' deficit                              (2,399,340)     (1,839,891)

                                                   ------------    ------------
Total liabilities and partners' deficit            $  8,269,344    $  8,985,092
                                                   ============    ============
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                       2
<PAGE>



             KRUPP REALTY LIMITED PARTNERSHIP - VII AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (Unaudited)


<TABLE>
<CAPTION>
                       For the Three Months Ended     For the Six Months Ended
                                June 30,                      June 30,
                       --------------------------    --------------------------
                           2001           2000           2001           2000
                       -----------    -----------    -----------    -----------
<S>                    <C>            <C>            <C>            <C>
Revenue:
   Rental              $ 1,051,531    $ 1,039,290    $ 2,109,834    $ 2,074,302
   Interest income           2,225          3,693          5,594          8,503

                       -----------    -----------    -----------    -----------
       Total revenue     1,053,756    $ 1,042,983      2,115,428      2,082,805

Expenses:
   Operating (Note 5)      287,630        252,346        587,155        499,127
   Maintenance             102,575        103,510        190,022        168,124
   Real estate taxes       118,951         93,494        226,954        204,251
   General and
    administrative
    (Note 5)                58,759         66,208        158,578        101,089
   Management fees
    (Note 5)                45,189         60,587         92,301        115,509
   Depreciation and
    amortization           344,409        352,793        684,810        707,327
   Interest                218,010        217,868        459,119        436,324

                       -----------    -----------    -----------    -----------
       Total expenses    1,175,523      1,146,806      2,398,939      2,231,751

                       -----------    -----------    -----------    -----------
Net loss               $  (121,767)   $  (103,823)   $  (283,511)   $  (148,946)
                       ===========    ===========    ===========    ===========

Allocation of net loss (Note 4):

   Investor Limited
    Partners (27,184
    units outstanding):
       Net loss        $  (120,549)   $  (102,785)   $  (280,676)   $  (147,457)
                       ===========    ===========    ===========    ===========

   Investor Limited
    Partners, Per Unit:
       Net loss        $     (4.43)   $     (3.78)   $    (10.33)   $     (5.42)
                       ===========    ===========    ===========    ===========

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

   General Partners:
       Net loss        $    (1,218)   $    (1,038)   $    (2,835)   $    (1,489)
                       ===========    ===========    ===========    ===========
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                       3
<PAGE>



             KRUPP REALTY LIMITED PARTNERSHIP - VII AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     For the Six Months Ended
                                                             June 30,
                                                     ------------------------
                                                        2001          2000
                                                     ----------    ----------

<S>                                                  <C>           <C>
Cash flows from operating activities:
  Net loss                                           $ (283,511)   $ (148,946)
  Adjustment to reconcile net loss to net cash
   provided by operating activities:
    Interest earned on replacement reserve escrow          -             (219)
    Depreciation and amortization                       684,810       707,327
    Changes in assets and liabilities:
      Increase in restricted cash for tenant
       security deposits                                   (222)      (27,704)
      Decrease in prepaid expenses and other
       assets                                           134,660       251,352
      Decrease in accrued expenses and other
       liabilities                                      (98,749)      (95,529)
                                                     ----------    ----------
      Net cash provided by operating activities         436,988       686,281
                                                     ----------    ----------

Cash flows from investing activities:
  Deposits to replacement reserve escrow                (21,000)      (25,200)
  Withdrawals from replacement reserve escrow              -           67,522
  Fixed asset additions                                (292,716)     (180,835)
  Increase (decrease) in accrued expenses and other
   liabilities related to fixed assets additions          2,346        (2,204)
                                                     ----------    ----------
      Net cash used in investing activities            (311,370)     (140,717)
                                                     ----------    ----------

Cash flows from financing activities:
  Principal payments on mortgage notes payable          (59,896)      (55,099)
  Distributions                                        (275,938)     (276,029)
                                                     ----------    ----------
      Net cash used in financing activities            (335,834)     (331,128)
                                                     ----------    ----------

Net (decrease) increase in cash and cash equivalent    (210,216)      214,436

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

                                                     ----------    ----------
Cash and cash equivalents, end of period             $  246,635    $  334,961
                                                     ==========    ==========
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                       4
<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 June 30, 2001, its
     results of  operation  for the three and six months ended June 30, 2001 and
     2000, and its cash flows for the six months ended June 30, 2001 and 2000.

     The results of operations  for the three and six months ended June 30, 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)  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 June 30, 2001 and December
     31, 2000.

(3)  Mortgage Notes Payable

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

                                    Continue





                                       5
<PAGE>



             KRUPP REALTY LIMITED PARTNERSHIP - VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

(4)  Changes in Partners' Deficit

     A summary of changes in Partners' deficit for the six months ended June 30,
     2001 is as follows:

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

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

     Net loss                (280,676)         -           (2,835)     (283,511)

     Distributions           (248,344)      (22,075)       (5,519)     (275,938)
                          -----------   -----------   -----------   -----------
     Balance at
       June 30, 2001      $(1,475,198)  $  (592,006)  $  (332,136)  $(2,399,340)
                          ===========   ===========   ===========   ===========
</TABLE>

(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:

                           For the Three Months Ended   For the Six Months Ended
                                    June 30,                    June 30,
                           --------------------------   ------------------------
                               2001          2000           2001         2000
                           -----------   ------------   -----------  -----------

   Property management
    fees                   $    45,189   $     60,587   $    92,301  $   115,509

   Expenses reimbursement       67,900         53,947       185,587       95,681

                           -----------   ------------   -----------  -----------
   Charged to operations   $   113,089   $    114,534   $   277,888  $   211,190
                           ===========   ============   ===========  ===========

     Expense  reimbursements  due from  affiliates  of $45,234 and $31,115  were
     included in due from  affiliates  at June 30, 2001 and  December  31, 2000,
     respectively.

(6)  Multi-Family Apartment Communities Available For Sale

     The  Partnership  classifies  assets as available for sale upon the General
     Partners committing to a formal plan of disposal.

     On June 12, 2001, the General Partners signed a purchase and sale agreement
     on Courtyards Village Apartments,  for a price of $12,768,000.  The sale is
     subject  to the  assumption  of the  current  mortgage  by the buyer and is
     expected to close in August  2001.  The  property  has a carrying  value of
     approximately  $3,650,000 on the books of the  Partnership at June 30, 2001
     and is classified as available for sale.



                                       6
<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 a mortgage  loan which would  otherwise  have
matured with financing that leaves flexibility for the property sale.

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 9 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.

On June 12, 2001, the General  Partners  signed a purchase and sale agreement on
Courtyards Village Apartments,  for a price of $12,768,000.  The sale is subject
to the assumption of the current  mortgage by the buyer and is expected to close
in August 2001. The property has a carrying value of approximately $3,650,000 on
the books of the Partnership at June 30, 2001.

The  General  Partners,  on an  ongoing  basis,  assess the  current  and future
liquidity  needs  to  determine  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.




                                       7
<PAGE>

             KRUPP REALTY LIMITED PARTNERSHIP - VII AND SUBSIDIARIES

Operations

The following  discussion  relates to the operations of the  Partnership and its
properties  (Courtyards  Village and Windsor  Apartments)  for the three and six
months ended June 30, 2001 and 2000.

Net loss  increased  during  the three and six months  ended June 30,  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 2001.

Total  expenses for the three months ended June 30, 2001 increased when compared
to the three  months  ended June 30,  2000.  Operating  expenses  increased as a
result of increases in payroll,  leasing and utilities costs.  Real estate taxes
increased due to an increase in the monthly accrual  resulting from reassessment
of property values by local taxing authorities.  Depreciation  expense decreased
as  fixed  asset  additions   purchased  in  the  previous  years  became  fully
depreciated.

Total expenses for the six months ended June 30, 2001 increased when compared to
the same period in 2000.  Operating expenses and real estate taxes increased due
to the reasons  discussed above.  Maintenance  expense and interest expense also
increased when compared to 2000. General and  administrative  expenses increased
as a result of increases in investor  communication  costs  including the annual
look-back adjustment which totaled  approximately  $43,000,  recorded during the
three months ended March 31, 2001.

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  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.




                                       8
<PAGE>


             KRUPP REALTY LIMITED PARTNERSHIP - VII AND SUBSIDIARIES

                           PART II - OTHER INFORMATION



Item 1.           Legal Proceedings
                    None

Item 2.           Changes in Securities
                    None

Item 3.           Defaults upon Senior Securities
                    None

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

Item 5.           Other information
                    None

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




                                       9
<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/ David C. Quade
                                         ---------------------------------------
                                          David C. Quade
                                          Treasurer   (Principal  Financial  and
                                           Accounting   Officer)  of  The  Krupp
                                           Corporation, a General Partner


DATE:  August 14, 2001