<PAGE>



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

                                   FORM 10-QSB

(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, 2003
                                                 -------------

                                       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 2-81033

           Winthrop Residential Associates III, A Limited Partnership
           ----------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

               Maryland                                  04-2782016
-----------------------------------------  -------------------------------------
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
       incorporation or organization)

7 Bulfinch Place, Suite 500, Boston, MA                  02114-9507
-----------------------------------------  -------------------------------------
(Address of principal executive office)                  (Zip Code)

        Registrant's telephone number, including area code (617) 570-4600
                                                          ---------------


Indicate by check mark whether 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
                                      -----   -----



                                    1 of 20



<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>


ITEM 1.  FINANCIAL STATEMENTS.

CONSOLIDATED BALANCE SHEETS
                                                                                 JUNE 30, 2003             DECEMBER 31,
(IN THOUSANDS, EXCEPT UNIT DATA)                                                  (UNAUDITED)                  2002
                                                                              ---------------------    ---------------------
<S>                                                                           <C>                      <C>
Assets

Cash and cash equivalents                                                     $              2,899     $              3,038
Investments in Local Limited Partnerships                                                      301                      365
Other assets                                                                                   234                      133
Real estate (net of accumulated depreciation
      of $3,849 in 2003 and $3,749 in 2002)                                                  1,482                    1,582
                                                                              ---------------------    ---------------------

      Total Assets                                                            $              4,916     $              5,118
                                                                              =====================    =====================

Liabilities and Partners' Capital

Liabilities:

Accounts payable and accrued expenses                                          $               156     $                147
Distributions payable                                                                           54                      108
Mortgage payable                                                                             2,235                    2,273
Accrued interest - subordinated loan payable                                                   120                      114
Subordinated loan payable                                                                      133                      133
                                                                              ---------------------    ---------------------

      Total Liabilities                                                                      2,698                    2,775
                                                                              ---------------------    ---------------------

Partners' Capital:

Limited Partners -
   Units of Limited Partnership Interest,
   $1,000 stated value per unit; 25,005 units authorized,
   issued and outstanding                                                                    3,393                    3,509
General Partners' deficit                                                                   (1,175)                  (1,166)
                                                                              ---------------------    ---------------------

         Total Partners' Capital                                                             2,218                    2,343
                                                                              ---------------------    ---------------------

         Total Liabilities and Partners' Capital                               $             4,916     $              5,118
                                                                              =====================    =====================
</TABLE>




                See notes to consolidated financial statements.

                                     2 of 20

<PAGE>
           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003


CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(IN THOUSANDS, EXCEPT UNIT DATA)

<TABLE>
<CAPTION>
                                                                 FOR THE THREE MONTHS ENDED           FOR THE SIX MONTHS ENDED
                                                                  JUNE 30,         JUNE 30,          JUNE 30,          JUNE 30,
                                                                  2003               2002             2003               2002
                                                             ---------------   ---------------  ----------------  ----------------
<S>                                                          <C>               <C>               <C>               <C>
Income:

    Rental income                                            $          295    $          307    $          596    $          580
    Income from Local Limited Partnership cash distributions              -               125                 -               250
    Equity in losses of Local Limited Partnerships                      (30)              (24)              (32)              (19)
    Interest                                                              8                13                17                26
    Other                                                                21                13                38                22
                                                             ---------------   ---------------  ----------------  ----------------

      Total income                                                      294               434               619               859
                                                             ---------------   ---------------  ----------------  ----------------

Expenses:

    Operating                                                           247               228               445               413
    Interest                                                             45                47                91                94
    Depreciation                                                         50                50               100               100
    General and administrative                                           26                27                54                51
                                                             ---------------   ---------------  ----------------  ----------------

      Total expenses                                                    368               352               690               658
                                                             ---------------   ---------------  ----------------  ----------------

Net (loss) income                                            $          (74)   $           82    $          (71)   $          201
                                                             ===============   ===============  ================  ================

Net (loss) income allocated to General Partners              $           (5)   $            6    $           (5)   $           15
                                                             ===============   ===============  ================  ================

Net (loss) income allocated to Limited Partners              $          (69)   $           76    $          (66)   $          186
                                                             ===============   ===============  ================  ================

Net (loss) income per Unit of Limited Partnership Interest   $        (2.76)   $         3.04    $        (2.64)   $         7.44
                                                             ===============   ===============  ================  ================

Distributions per Unit of Limited Partnership Interest       $         1.00    $         1.00    $         2.00    $         2.00
                                                             ===============   ===============  ================  ================
</TABLE>













                See notes to consolidated financial statements.

                                     3 of 20


<PAGE>


           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003



CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (UNAUDITED)

(IN THOUSANDS, EXCEPT UNIT DATA)

<TABLE>
<CAPTION>
                                          UNITS OF
                                           LIMITED              GENERAL                LIMITED                 TOTAL
                                         PARTNERSHIP           PARTNERS'              PARTNERS'              PARTNERS'
                                          INTEREST              DEFICIT                CAPITAL                CAPITAL
                                      ------------------   -------------------    -------------------   ---------------------
<S>                                    <C>                 <C>                    <C>                   <C>
Balance - January 1, 2003                        25,005    $           (1,166)    $            3,509    $              2,343

    Net loss                                          -                    (5)                   (66)                    (71)
    Distributions                                     -                    (4)                   (50)                    (54)
                                      ------------------   -------------------    -------------------   ---------------------

Balance - June 30, 2003                          25,005    $           (1,175)    $            3,393    $              2,218
                                      ==================   ===================    ===================   =====================
</TABLE>






















                See notes to consolidated financial statements.

                                     4 of 20


<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003


<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                                                        FOR THE SIX MONTHS ENDED
                                                                                    JUNE 30,                JUNE 30,
(IN THOUSANDS)                                                                        2003                    2002
                                                                              ---------------------    --------------------
<S>                                                                           <C>                      <C>
Cash Flows from Operating Activities:

Net (loss) income                                                             $                (71)    $               201
Adjustments to reconcile net (loss) income to net cash used in
    operating activities:
      Depreciation                                                                             100                     100
      Income from Local Limited Partnership cash distributions                                   -                    (250)
      Equity in losses of Local Limited Partnerships                                            32                      19
      Changes in assets and liabilities:
         (Increase) decrease in other assets                                                  (101)                      5
         Increase (decrease) in accounts payable
           and accrued expenses                                                                  9                    (250)
         Increase in accrued interest payable on
           subordinated loan                                                                     6                       7
                                                                              ---------------------    --------------------

      Net cash used in operating activities                                                    (25)                   (168)
                                                                              ---------------------    --------------------

Cash Flows From Investing Activities:

      Distributions received from Local Limited Partnerships                                    32                     261
                                                                              ---------------------    --------------------

      Cash provided by investing activities                                                     32                     261
                                                                              ---------------------    --------------------

Cash Flows From Financing Activities:

      Mortgage principal payments                                                              (38)                    (36)
      Distributions to partners                                                               (108)                   (108)
                                                                              ---------------------    --------------------

      Cash used in financing activities                                                       (146)                   (144)
                                                                              ---------------------    --------------------

Net decrease in cash and cash equivalents                                                     (139)                    (51)

Cash and cash equivalents, beginning of period                                               3,038                   2,902
                                                                              ---------------------    --------------------

Cash and cash equivalents, end of period                                      $              2,899     $             2,851
                                                                              =====================    ====================

Supplemental Disclosure of Cash Flow Information:

      Interest paid in cash                                                   $                 85     $                87
                                                                              =====================    ====================

Supplemental Disclosure of Non-Cash
      Investing Activities

      Accrued distributions to partners                                       $                 54     $                54
                                                                              =====================    ====================
</TABLE>




                 See notes to consolidated financial statements.

                                    5 of 20

<PAGE>



           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.           GENERAL

             The accompanying consolidated financial statements, footnotes and
             discussions should be read in conjunction with the consolidated
             financial statements, related footnotes and discussions contained
             in the Partnership's Annual Report on Form 10-KSB for the year
             ended December 31, 2002.

             The financial information contained herein is unaudited. In the
             opinion of management, all adjustments necessary for a fair
             presentation of such financial information have been included. All
             adjustments are of a normal recurring nature. The balance sheet at
             December 31, 2002 was derived from audited financial statements at
             such date.

             The results of operations for the six months ended June 30, 2003
             and 2002 are not necessarily indicative of the results to be
             expected for the full year.

2.           CONSOLIDATION

             The accompanying financial statements have been prepared on a
             consolidated basis, including the accounts of Clear Creek Ltd. All
             significant intercompany transactions and balances have been
             eliminated.











                                    6 of 20
<PAGE>


           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

           The matters discussed in this Form 10-QSB contain certain
           forward-looking statements and involve risks and uncertainties
           (including changing market conditions, competitive and regulatory
           matters, etc.) detailed in the disclosure contained in this Form
           10-QSB and the other filings with the Securities and Exchange
           Commission made by the Partnership from time to time. The discussion
           of the Partnership's liquidity, capital resources and results of
           operations, including forward-looking statements pertaining to such
           matters, does not take into account the effects of any changes to the
           Partnership's operations. Accordingly, 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.

           This Item should be read in conjunction with the consolidated
           financial statements and other items contained elsewhere in the
           report.

           Liquidity and Capital Resources

           As of June 30, 2003, the Partnership retained an equity interest in
           five Local Limited Partnerships, each of which owns a single
           apartment complex. The Partnership also owns an 88.5% interest in
           Clear Creek Ltd. ("Clear Creek"), a partnership in which an affiliate
           of the Partnership's general partner is the managing general partner.
           The Partnership's primary sources of income are distributions from
           the Local Limited Partnerships and rental income from Clear Creek
           Apartments. The Partnership requires cash to pay the operating
           expenses and mortgage note of Clear Creek, for general and
           administrative expenses and to make capital contributions and/or
           loans to any of the Local Limited Partnerships which the managing
           general partner deems to be in the Partnership's best interest.

           To date, all cash requirements have been satisfied by interest income
           earned on short-term investments, rental income from Clear Creek and
           cash distributed to the Partnership by the Local Limited
           Partnerships. If the Partnership funds any operating deficits, it
           will use monies from its operating reserves. As of June 30, 2003, the
           Partnership had cash and cash equivalents of $2,899,000 as compared
           to $3,038,000 at December 31, 2002. The managing general partner's
           current policy is to maintain a reserve balance sufficient to provide
           the Partnership the flexibility to preserve its economic interest in
           the Local Limited Partnerships. Therefore, a lack of cash distributed
           by the Local Limited Partnerships to the Partnership in the future
           should not deplete the reserves, though it may restrict the
           Partnership from making distributions. The Partnership did not fund
           any operating deficits to Local Limited Partnerships during the six
           months ended June 30, 2003.

           The level of liquidity based on cash and cash equivalents
           experienced a $139,000 decrease at June 30, 2003 as compared to
           December 31, 2002. The Partnership's $25,000 of net cash used in
           operating activities and $146,000 of cash used in financing
           activities was partially offset by $32,000 of cash provided by
           investing activities. Cash used in financing activities consisted of
           $38,000 of mortgage principal payments and $108,000 of distributions
           to partners. Cash provided by investing activities consisted of
           $32,000 of distributions received from Local Limited Partnerships.
           For the six months ended June 30, 2003, the Partnership accrued
           distributions aggregating $50,000 ($2.00 per unit) to its limited
           partners and $4,000 to the general partners. The Partnership's
           present policy is to accrue distributions on a quarterly basis and
           to pay them on an annual basis.

                                    7 of 20
<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
           (CONTINUED)

           Liquidity and Capital Resources (Continued)

           The Partnership is not obligated to provide any additional funds to
           the Local Limited Partnerships to fund operating deficits. The
           Partnership determines on a case by case basis whether to fund any
           operating deficits. If a Local Limited Partnership sustains
           continuing operating deficits and has no other sources of funding,
           it is likely that it will eventually default on its mortgage
           obligations and risk a foreclosure on its property by the lender. If
           a foreclosure were to occur, the Local Limited Partnership would
           lose its investment in the property and would incur a tax liability
           due to the recapture of tax benefits taken in prior years. The
           Partnership, as an owner of the Local Limited Partnership, would
           share these consequences in proportion to its ownership interest in
           the Local Limited Partnership.

           The mortgage note payable encumbering Clear Creek in the amount of
           $2,235,000 is self amortizing and is payable in monthly installments
           of approximately $20,000, including interest at 7.5% per annum,
           through October 2018, the date of maturity. The mortgage is
           collateralized by the rental property.

           The subordinated loan, in the amount of $133,000, is due to the
           former general partner of Clear Creek who also manages the property.
           The subordinated loan accrues interest at 10% and is due upon sale
           of the property.

           On June 19, 2003, the Partnership solicited the consent of its
           limited partners to extend the term of the Partnership from December
           31, 2003 to December 31, 2034. The requisite consent of limited
           partners was not obtained on July 31, 2003, the final date on which
           votes were accepted. Accordingly, the Partnership will be dissolved
           in accordance with the terms of its Partnership Agreement on December
           31, 2003. The General Partner will begin marketing the Partnership's
           assets for sale. To the extent all of the Partnership's assets are
           not sold prior to December 31, 2003, such assets will be liquidated
           in an orderly fashion following dissolution and/or be distributed in
           kind. In either event, after establishing sufficient reserves, the
           Partnership will distribute all of its cash upon dissolution. There
           can be no assurance that the Partnership will be successful in
           selling its assets or at what the price such assets can be sold.

           The Partnership's only significant critical accounting policy
           relates to the evaluation of the fair value of real estate and its
           investments in Local Limited Partnerships. The Partnership evaluates
           the need for an impairment loss on its real estate assets and
           investments when indicators of impairment are present and the
           undiscounted cash flows are not sufficient to recover the asset's
           carrying amount. The impairment loss is measured by comparing the
           fair value of the asset to its carrying amount. The evaluation of
           the fair value of real estate and its investments is an estimate
           that is susceptible to change and actual results could differ from
           those estimates.

           Results of Operations

           The Partnership's net loss for the six months ended June 30, 2003
           was $71,000, as compared to net income of $201,000 for the six
           months ended June 30, 2002. The decrease is due to a decrease in
           income of $240,000 and an increase in expenses of $32,000. The
           decrease in income is due to decreases in income from Local Limited
           Partnership cash distributions of $250,000, interest income of
           $9,000 and $32,000 of



                                    8 of 20
<PAGE>

          WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                           FORM 10-QSB JUNE 30, 2003

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

          Results of Operations (Continued)

          equity in losses of Local Limited Partnerships for the six months
          ended June 30, 2003 as compared to $19,000 of equity in losses of
          Local Limited Partnerships for the six months ended June 30, 2002,
          which were partially offset by increases in rental income of $16,000
          and other income of $16,000. The increase in rental income is a
          result of an increase in occupancy at the Clear Creek property.
          During the six months ended June 30, 2003, the Partnership did not
          receive any cash distributions from the Local Limited Partnerships.
          During the six months ended June 30, 2002, the Partnership received
          $250,000 of cash distributions from Village Square Associates Limited
          Partnership. The increase in expenses is due to an increase in
          various operating expenses of $32,000 and an increase in general and
          administrative expenses of $3,000, which were partially offset by a
          decrease in interest expense of $3,000.

          Recently Issued Accounting Standards

          In April 2002, the Financial Accounting Standards Board ("FASB")
          issued Statement of Financial Accounting Standard ("SFAS") No. 145,
          "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
          Statement No. 13 and Technical Corrections," which updates, clarifies
          and simplifies existing accounting pronouncements. This statement
          rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment
          of Debt." FASB No. 145 is effective for fiscal years beginning after
          May 15, 2002. Upon adoption, enterprises must reclassify prior period
          items that do not meet the extraordinary item classification criteria
          in Accounting Principles Board Opinion No. 30. This statement had no
          effect on the Partnership's consolidated financial statements.

          In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
          Associated with Exit or Disposal Activities." SFAS No. 146 requires
          companies to recognize costs associated with exit or disposal
          activities when they are incurred rather than at the date of a
          commitment to an exit or disposal plan. Examples of costs covered by
          the standard include lease termination costs and certain employee
          severance costs that are associated with a restructuring,
          discontinued operation, plant closing or other exit or disposal
          activity. SFAS No. 146 is effective prospectively for exit and
          disposal activities after December 31, 2002. This statement had no
          effect on the Partnership's consolidated financial statement.

          In November 2002, the FASB issued Interpretation No. 45, "Guarantors'
          Accounting and Disclosure Requirements for Guarantees, Including
          Indirect Guarantees of Indebtedness of Others." The interpretation
          elaborates on the disclosures to be made by a guarantor in its
          financial statements about its obligations under certain guarantees
          that it has issued. It also clarifies that a guarantor is required to
          recognize, at the inception of a guarantee, a liability for the fair
          value of the obligation undertaken in issuing the guarantee. This
          interpretation does not prescribe a specific approach for
          subsequently measuring the guarantor's recognized liability over the
          term of the related guarantee. The disclosure provisions of this
          interpretation were effective for the Partnership's December 31, 2002
          consolidated financial statements. The initial recognition and
          initial measurement provisions of this interpretation are applicable
          on a prospective basis to guarantees issued or modified after
          December 31, 2002. This interpretation had no effect on the
          Partnership's consolidated financial statements.


                                    9 of 20
<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

           Recently Issued Accounting Standards (Continued)

           In January 2003, the FASB issued Interpretation No. 46,
           "Consolidation of Variable Interest Entities." This interpretation
           clarifies the application of existing accounting pronouncements to
           certain entities in which equity investors do not have the
           characteristics of a controlling financial interest or do not have
           sufficient equity at risk for the entity to finance its activities
           without additional subordinated financial support from other parties.
           The provisions of the interpretation are effective for all variable
           interests in variable interest entities created after January 31,
           2003, and the Partnership will need to apply its provisions to any
           existing variable interests in variable interest entities no later
           than December 31, 2004. The Partnership does not expect that this
           interpretation will have an impact on the Partnership's consolidated
           financial statements.

           In April 2003, the FASB issued SFAS No. 149, "Amendment of SFAS No.
           133 on Derivative Instruments and Hedging Activities." This statement
           amends and clarifies financial accounting and reporting for
           derivative instruments, including certain derivative instruments
           embedded in other contracts (collectively referred to as derivatives)
           and for hedging activities under SFAS No. 133, "Accounting for
           Derivative Instruments and Hedging Activities." The changes in this
           statement improve financial reporting by requiring that contracts
           with comparable characteristics be accounted for similarly. In
           particular, this statement (1) clarifies under what circumstances a
           contract with an initial net investment meets the characteristic of a
           derivative discussed in SFAS No. 133, (2) clarifies when a derivative
           contains a financing component, (3) amends the definition of an
           underlying that is related to an asset, liability or equity security
           to conform it to language used in FASB Interpretation No. 45, and (4)
           amends certain other existing pronouncements. Those changes will
           result in more consistent reporting of contracts as either
           derivatives or hybrid instruments. This statement is effective for
           contracts entered into or modified after June 30, 2003, and for
           hedging relationships designated after June 30, 2003. The guidance
           should be applied prospectively. The provisions of this statement
           that relate to SFAS No. 133 implementation issues that have been
           effective for fiscal quarters that began prior to June 15, 2003,
           should continue to be applied in accordance with their respective
           effective dates. In addition, certain provisions relating to forward
           purchases or sales of when-issued securities or other securities that
           do not yet exist, should be applied to existing contracts as well as
           new contracts entered into after June 30, 2003. The Partnership does
           not expect that this statement will have an impact on the
           Partnership's consolidated financial statements.

           In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
           Financial Instruments with Characteristics of both Liabilities and
           Equity." The statement improves the accounting for certain financial
           instruments that under previous guidance, issuers could account for
           as equity. The new statement requires that those instruments be
           classified as liabilities in statements of financial position. SFAS
           No. 150 affects the issuer's accounting for three types of
           freestanding financial instruments. One type is mandatorily
           redeemable shares, which the issuing company is obligated to buy back
           in exchange for cash or other assets. A second type, which includes
           put options and forward purchase contracts, involves instruments that
           do or may require the issuer to buy back some of its shares in
           exchange for cash or other assets. The third type of instruments that
           are liabilities under this statement is obligations that can be
           settled with shares, the monetary value of which is fixed, tied
           solely or predominantly to a variable such as




                                    10 of 20
<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

           Recently Issued Accounting Standards (Continued)

           a market index, or varies inversely with the value of the issuers'
           shares. SFAS No. 150 does not apply to features embedded in a
           financial instrument that is not a derivative in its entirety. In
           addition to its requirements for the classification and measurement
           of financial instruments in its scope, SFAS No. 150 also requires
           disclosures about alternative ways of settling the instruments and
           the capital structure of entities, all of whose shares are
           mandatorily redeemable. Most of the guidance in SFAS No. 150 is
           effective for all financial instruments entered into or modified
           after May 31, 2003, and otherwise is effective at the beginning of
           the first interim period beginning after June 15, 2003. The
           Partnership does not expect that this statement will have an impact
           on the Partnership's consolidated financial statements.

           Quantitative and Qualitative Disclosures of Market Risk

           The Partnership does not have any financial instruments that would
           expose it to market risk associated with the risk of loss arising
           from adverse changes in market rates and prices. The Partnership's
           mortgage note payable at June 30, 2003 is at a fixed rate of
           interest.

ITEM 3.    CONTROLS AND PROCEDURES

           The Partnership's principal executive officer and principal financial
           officer have, within 90 days of the filing date of this quarterly
           report, evaluated the effectiveness of the Partnership's disclosure
           controls and procedures (as defined in Exchange Act Rules 13a -
           14(c)) and have determined that such disclosure controls and
           procedures are adequate. There have been no significant changes in
           the Partnership's internal controls or in other factors that could
           significantly affect such internal controls since the date of
           evaluation. Accordingly, no corrective actions have been taken with
           regard to significant deficiencies or material weaknesses.








                                    11 of 20
<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003


PART II -  OTHER INFORMATION

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

           On June 19, 2003, the Partnership solicited the consent of its
           limited partners to extend the term of the Partnership from December
           31, 2003 to December 31, 2034. The requisite consent of limited
           partners was not obtained on July 31, 2003, the final date on which
           votes were accepted.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

           (a)  Exhibits:

                31   Certifications Pursuant to Section 302 of the Sarbanes-
                     Oxley Act of 2002.

                32   Certification Pursuant to Section 906 of the Sarbanes-Oxley
                     Act of 2002.

                99.1 Supplementary Information Required Pursuant to Section 9.4
                     of the Partnership Agreement.

            (b)  Reports on Form 8-K:

                 No reports on Form 8-K were filed during the period ended June
                 30, 2003.




















                                    12 of 20
<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

                                   SIGNATURES

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


                                       WINTHROP RESIDENTIAL ASSOCIATES III,
                                       A LIMITED PARTNERSHIP


                                       BY: TWO WINTHROP PROPERTIES, INC.
                                           Managing General Partner



                                       BY: /s/ Michael L. Ashner
                                           ---------------------------------
                                           Michael L. Ashner
                                           Chief Executive Officer



                                       BY: /s/ Thomas C. Staples
                                           ---------------------------------
                                           Thomas C. Staples
                                           Chief Financial Officer


                                           Dated: August 19, 2003





                                    13 of 20
<PAGE>

           WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
                            FORM 10-QSB JUNE 30, 2003

Exhibit Index

         Exhibits                                                       Page No.
         --------                                                       --------

31       Certifications Pursuant to Section 302 of the                   15 - 18
         Sarbanes-Oxley Act of 2002.

32       Certification Pursuant to Section 906 of the Sarbanes-             19
         Oxley Act of 2002.

99.1     Supplementary Information Required Pursuant to                     20
         Section 9.4 of the Partnership Agreement.




                                    14 of 20