<PAGE>
<PAGE>

                               UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                               ______________
      
                                 FORM 10-K

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)

                   OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1998   Commission file number 000-23037
                          -----------------                          ---------


                COMMUNITY INVESTMENT PARTNERS III L.P., LLLP
______________________________________________________________________________
           (Exact name of registrant as specified in its charter)


               MISSOURI                             43-1790352
______________________________________________________________________________
    (State or other jurisdiction of      (IRS Employer Identification No.)
    incorporation or organization)



        12555 Manchester Road
        St. Louis, Missouri                           63131
______________________________________________________________________________
(Address and principal executive office)            (Zip Code)

Registrant's telephone number, including area code   (314) 515-2000
                                                    ----------------  

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: None.

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 [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in part III of this
Form 10-K or any amendment to this form 10-K.   YES  [   ]   NO [ X ]

As of March 15, 1999, 48,440 units of limited partnership interest
(Units), representing net assets of $1,094,700 were held by non-
affiliates.  There is no established public market for such Units.


                              <PAGE>
<PAGE>

                   DOCUMENTS INCORPORATED BY REFERENCE


     Portions of the Prospectus of the Registrant dated January 9,
1998, filed with the Securities and Exchange Commission are incorporated
by reference in Part I, Part II and Part III hereof.

<PAGE>
<PAGE>
<TABLE>    
                COMMUNITY INVESTMENT PARTNERS III L.P., LLLP

                             TABLE OF CONTENTS
<CAPTION>
PART I                                                                        Page
                                                                              ----
<S>                                                                           <C>
      Item 1.        Business                                                   4

      Item 2.        Properties                                                 5

      Item 3.        Legal Proceedings                                          6

      Item 4.        Submission of Matters to a Vote of Security Holders        6

PART II

      Item 5.        Market for the Registrant's Common Equity and
                     Related Stockholder Matters                                7

      Item 6.        Selected Financial Data                                    8

      Item 7.        Management's Discussion and Analysis of
                     Financial Condition and Results of Operations              9

      Item 8.        Index to Financial Statements and
                     Supplementary Financial Data                              11

      Item 9.        Changes in and Disagreements with Accountants
                     on Accounting and Financial Disclosure                    24

PART III

      Item 10.       Directors and Executive Officers of the Registrant        25

      Item 11.       Executive Compensation                                    26

      Item 12.       Security Ownership of Certain Beneficial
                     Owners and Management                                     27

      Item 13        Certain Relationships and Related Transactions            27

Part IV

      Item 14.       Exhibits, Financial Statement Schedules and
                     Reports on Form 8-K                                       28

SIGNATURES                                                                     29

INDEX TO EXHIBITS                                                              30

</TABLE>
<PAGE>
<PAGE>

                               PART I


ITEM 1.  BUSINESS

     Community Investment Partners III L.P., LLLP (the "Partnership")
was formed to seek long-term capital appreciation by making investments
in companies and other special investment situations. The Partnership
will not engage in any other business or activity. The Partnership will
dissolve on December 31, 2012, subject to the right of the Individual
General Partners to extend the term for up to two additional two-year
periods.

     The Partnership has elected to be a business development company
under the Investment Company Act of 1940, as amended. As a business
development company, the Partnership is required to invest at least 70%
of its assets in qualifying investments as specified in the Investment
Company Act.

     The Partnership was formed on July 23, 1997, under the Missouri
Uniform Partnership Law and the Missouri Revised Uniform Limited
Partnership Law. CIP Management, L.P., LLLP, the Managing General
Partner, is a Missouri limited liability limited partnership originally
formed on October 10, 1989 as a Missouri limited partnership and
registered as a limited liability limited partnership on July 23, 1997.
The general partner of CIP Management, L.P., LLLP is CIP Management,
Inc., an indirect subsidiary of Edward D. Jones & Co., L.P.

     The Partnership participated in a public offering of its limited
partnership interests in the first quarter of 1998. The Partnership sold
54,340 Units of limited partnership interest and 549 Units of general
partnership interest for an aggregate price of $686,111. In the fourth
quarter, the Partnership executed a call to each partner for an
additional aggregate amount of $686,111. After offering expenses, the
Partnership received approximately $1,289,859 in proceeds available for
investment.

     The Managing General Partner is required to have invested the net
proceeds of the Partnership's offering (excluding amounts held in
reserve) within two years of the date of the capital call.

     The information set forth under the captions "Investment
Objectives and Policies" and "Regulation" in the Prospectus of the
Partnership dated January 9, 1998, filed with the Securities and
Exchange Commission pursuant to Rule 497(b) under the Securities Act of
1933, is incorporated herein by reference.

     RISKS OF UNIT OWNERSHIP

     The purchase and ownership of Units involve a number of
significant risks and other important factors. The portfolio company
investments of the Partnership involve a high degree of business and
financial risk that can result in substantial losses. Among these are
the risks associated with investment in companies with little operating
history, companies operating at a loss or with substantial variations in
operating results from period to period, companies with the need for
substantial additional capital to support expansion or achieve or
maintain a competitive position, companies which may be highly
leveraged, companies which may not be diversified and companies in which
the Partnership may be the sole or primary lender. The Partnership
intends to invest in only a few companies; therefore, a loss or other
problem with a single investment would have a material adverse effect on
the Partnership.

<PAGE>
<PAGE>

     Other risks include the Partnership's ability to find suitable
investments for its funds because of competition from other entities
having similar investment objectives. Risks may arise due to the
significant period of time that may elapse before the Partnership has
completed the selection of its portfolio company investments and the
significant period of time (typically four to seven years or longer)
which will elapse before portfolio company investments have reached a
state of maturity such that disposition can be considered. It is
unlikely that any significant distributions of the proceeds from the
disposition of investments will be made until the later years of the
term of the Partnership.

     Portfolio companies may require additional funds. There can be no
assurance that the Partnership will have sufficient funds from reserves
or borrowing to make such follow-up investments which may have a
substantial negative impact on a portfolio company in need of additional
funds or may result in a missed opportunity to increase participation in
a successful operation.

     All decisions with respect to the management of the Partnership,
including identifying and making portfolio investments, are made
exclusively by the General Partners. Limited Partners must rely on the
abilities of the General Partners. The key personnel of the Managing
General Partner have considerable prior experience in investment banking
and in structuring investments similar to those which the Partnership
intends to pursue. In addition, they have prior experience in the
operation of Community Investment Partners, L.P. and Community
Investment Partners II, L.P., both business development companies with
similar investment strategies.

     Ownership of the Units also entails risk because Limited Partners
may not be able to liquidate their investment in the event of an
emergency or for any other reason due to the substantial restrictions on
transfers contained in the Partnership Agreement and the lack of a
market for the resale of Units.

     The information set forth under the captions "Risk and Other
Important Factors" (including the subsections "Risks of Investment,"
"Size of Partnership," "Ability to Invest Funds," "Time Required to
Maturity of Investments; Illiquidity of Investments," "Need for Follow-
on Investments," "Use of Leverage," "Unspecified Investments," "Reliance
on Management," "New Business," "No Market for Units," "Distributions in
Kind" and "Federal Income Tax Considerations") on pages 13 through 17 of
the Prospectus of Partnership dated January 9, 1998, filed with the
Securities and Exchange Commission pursuant to Rule 497(b) under the
Securities Act of 1933 on January 9, 1998, is incorporated herein by
this reference. (This information has been restated herein pursuant to
section 64(b) of the Investment Company Act of 1940).

     Partners should refer to the Partnership Agreement for more
detailed information.

EMPLOYEES

     The Partnership has no employees. The Managing General Partner
performs management and administrative services for the operation of the
Partnership. The Managing General Partner is paid an annual management
fee of 1.5% of total assets. The Managing General Partner is reimbursed
by the Partnership for out of pocket expenses in connection with
finding, evaluating, structuring, approving, monitoring and liquidating
the Partnership's portfolio investments.

ITEM 2.  PROPERTIES

     The Partnership does not own or lease any physical properties.


<PAGE>
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     The Partnership is not a party to any material pending legal
proceedings.

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

     No matters were submitted to a vote of security holders during the
period covered by this report.


                              <PAGE>
<PAGE>

                              PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS

     There is no established public trading market for the Limited
Partnership interests. As of March 15, 1999, the total number of holders
of units is 111. The number of limited partnership units outstanding is
54,340. The number of general partnership units outstanding is 549 as of
March 15, 1999.

     The information set forth under the captions "Partnership
Distributions and Allocations" and "Transferability of Units" in the
Prospectus of the Partnership dated January 9, 1998, filed with the
Securities and Exchange Commission pursuant to Rule 497(b) under the
Securities Act of 1933 is incorporated herein by reference.


<PAGE>
<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA,


<TABLE>
STATEMENTS OF FINANCIAL CONDITION:

<CAPTION>
                                                                          As of
                                                                       December 31,
                                                                 ----------------------


                                                                    1998          1997
                                                                 ----------      ------
<S>                                                              <C>             <C>
Net Assets                                                       $1,240,442      $1,100

Portfolio Investments at Fair Value                                 512,003           -


<CAPTION>
STATEMENTS OF INCOME:
                                                                     For the Years
                                                                   Ended December 31,
                                                                 ----------------------


                                                                    1998          1997
                                                                 ----------      ------
<S>                                                              <C>             <C>
Net Loss before Realized Gains
(Losses) and Unrealized Gains (Losses)                           $ (131,780)          -

Realized Gains (Losses)                                                   -           -

Unrealized Gains (Losses)                                                 -           -

Net Loss                                                           (131,780)          -

Per Unit of
Partnership Interest:

Net Asset Value                                                       22.60           -

Net Loss before Realized Gains
(Losses) and Unrealized Gains (Losses)                                (2.40)          -

Realized Gains (Losses)                                                   -           -

Unrealized Gains (Losses)                                                 -           -

Net Loss                                                              (2.40)          -

</TABLE>
<PAGE>
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

                   (FISCAL YEAR 1998 VERSUS 1997)

     Net loss for the year ended December 31, 1998, was $131,780.
Operating activities did not commence until 1998; only initial
contributions of $1,100 were made to establish the Partnership in 1997.
The net loss is attributable to $29,060 in professional fees incurred by
the Partnership and $19,813 in director and management fees. In
addition, $82,363 for organization costs were expensed during 1998.

     The Partnership participated in a public offering of its limited
partnership interests in  the first quarter of 1998. The Partnership
sold 54,340 Units of limited partnership interest and 549 Units of
general partnership interest for an aggregate price of $686,111. In the
fourth quarter, the Partnership executed a call to each partner for an
additional aggregate amount of $686,111. After offering expenses, the
Partnership received approximately $1,289,859 in proceeds available for
investment.

     The Partnership has made several initial investments totaling
$512,003 in its first year of operations (Note 6). The Partnership made
no distributions during 1998. The future income or loss of the
Partnership is contingent upon the performance of the portfolio
investments.

<PAGE>
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     Total capital for the Partnership as of December 31, 1998, was
$1,240,442. This consisted of $1,228,038 in Limited Partner capital and
$12,404 in General Partner capital.

     Net loss of $131,780 for 1998 was allocated in the amount of
$130,462 to the Limited Partners and in the amount of $1,318 to the
General Partner.

     The Partnership is actively reviewing potential portfolio
investments. Until the Partnership finishes investing in portfolio
investments, it intends to invest its cash balances in a money market
account. Due to their short-term nature, such investments provide the
Partnership with the liquidity necessary for investments as
opportunities arise. At December 31, 1998, the Partnership had $742,439
in cash and cash equivalents.

SUBSEQUENT EVENTS

     None

YEAR 2000 ISSUE

     Although the Partnership has no Year 2000 issues that would result
from its own information systems, the Partnership has investments in
publicly and privately placed securities and loans. The Partnership may
be exposed to credit risk to the extent that the related borrowers are
materially adversely impacted by the Year 2000 issue.

<PAGE>
<PAGE>

Item 8.  INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY
         FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                              Page
                                                                              ----
<S>                                                                          <C>
      Report of Independent Accountants                                        12

      Schedule of Portfolio Investments as of
      December 31, 1998 and 1997                                               13

      Statements of Financial Condition as of December 31, 1998 and 1997       16

      Statements of Income for the Years Ended
      December 31, 1998 and 1997.                                              17

      Statements of Cash Flows for the Years Ended
      December 31, 1998 and 1997.                                              18

      Statements of Changes in Partnership Capital for the
      Years Ended December 31, 1998 and 1997.                                  19

      Notes to Financial Statements.                                           20
</TABLE>


Financial Statement Schedules:

All financial statement schedules are omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.


                              <PAGE>
<PAGE>

                 REPORT OF INDEPENDENT ACCOUNTANTS



To the Partners of
Community Investment Partners III L.P., LLLP

In our opinion, the accompanying Statements of Financial Condition,
including the Schedule of Portfolio Investments, and the related
Statements of Income, of Cash Flows and of Changes in Partnership
Capital present fairly, in all material respects, the financial
position of Community Investment Partners III L.P., LLLP (the
"Partnership") at December 31, 1998 and 1997, and the results of
its operations, its cash flows and the changes in Partnership
Capital for each of the two years in the period ended December 31,
1998, in confomity with generally accepted accounting principles.
These financial statements are the responsibility of the
Partnership's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we
plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included
confirmation of portfolio investments owned at December 31, 1998,
provide a reasonable basis for the opinion expressed above.

As explained in Note 3, the financial statements include securities
valued at $512,003 (41 percent of net assets), whose values have
been estimated by the Managing General Partner in the absence of
readily ascertainable market values.  Those estimated values may
differ significantly from the values that would have been used had
a ready market for the investments existed, and the differences
could be material.


PRICEWATERHOUSECOOPERS LLP

St. Louis, Missouri
March 12, 1999


                              <PAGE>
<PAGE>
<TABLE>
                          COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                                SCHEDULE OF PORTFOLIO INVESTMENTS
                                     As of December 31, 1998
<CAPTION>
-----------------------------------------------------------------------------------------------------

Company                       Nature of Business                                         Fair Value
Investment Date               Investment                                   Cost           (Note 3)

-----------------------------------------------------------------------------------------------------
<S>                           <C>                                        <C>               <C>
IMPLEMED, INC.                Develops polymers that are
                              used to coat medical and other
                              devices where infection is a
                              serious problem

      April 6, 1998           10,000 shares of Series D
                              Convertible Preferred Stock                $100,000          $100,000

LIPOMED, INC.                 A diagnostic testing and
                              analytical company that is
                              pioneering new medical applications
                              of nuclear magnetic resonance
                              (NMR) spectroscopy.

      June 16, 1998           16,667 shares of Series B
                              Convertible Preferred Stock                 100,002           100,002

OPTIMARK TECHNOLOGIES, INC.   Developed and patented a
                              computer-based method for structuring
                              auction markets that significantly
                              improves liquidity and efficiency,
                              lowering transaction costs in the process.

      September 23, 1998      10,000 shares of Series B
                              Convertible Participating
                              Preferred Stock                             100,000           100,000

PROTEIN DELIVERY INC.         Drug delivery company specializing
                              in proprietary polymer-based systems
                              for the delivery and stabilization of
                              protein and peptide drugs.

      April 6, 1998           44,445 shares of Series D
                              Preferred Stock                             100,001           100,001
      December 23, 1998       10% Bridge Note, due 4/1/99
                              and a Warrant to purchase
                              shares of Common Stock,
                              expiring 12/31/04                            12,000            12,000


                                                  <PAGE>
<PAGE>
<CAPTION>
                           COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                            SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D.)
                                      As of December 31, 1998

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

Company                       Nature of Business                                         Fair Value
Investment Date               Investment                                   Cost           (Note 3)

-----------------------------------------------------------------------------------------------------
<S>                           <C>                                        <C>               <C>
UNITED THERAPEUTICS           Develops innovative pharmaceutical
CORPORATION                   and biotechnological therapies for
                              the treatment of life threatening
                              diseases.

      March 31, 1998          100,000 shares of Common Stock              100,000           100,000
                                                                         --------          --------


                              TOTAL INVESTMENTS                          $512,003          $512,003
                                                                         ========          ========



                             The accompanying notes are an integral
                               part of these financial statements.


</TABLE>
                                         <PAGE>
<PAGE>

<TABLE>
                          COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                                SCHEDULE OF PORTFOLIO INVESTMENTS
                                     As of December 31, 1997
<CAPTION>
-----------------------------------------------------------------------------------------------------

Company                       Nature of Business                                         Fair Value
Investment Date               Investment                                   Cost           (Note 3)

-----------------------------------------------------------------------------------------------------
<S>                           <C>                                        <C>               <C>

No investments were made  in 1997



           The accompanying notes are an integral part of these financial statements.

</TABLE>                                         <PAGE>
<PAGE>

<TABLE>
                      COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                            STATEMENTS OF FINANCIAL CONDITION

                                         ASSETS
                                         ------

<CAPTION>
                                                                           December 31,
                                                                 ----------------------------


                                                                    1998                1997
                                                                 ----------            ------
<S>                                                              <C>                   <C>
Investments at Fair Value (Note 3)
   (cost $512,003 and $0 respectively)                           $  512,003            $    -
Cash and Cash Equivalents                                           742,439             1,100
Deferred Organizational Costs (Note 3)                                    -             8,532
                                                                 ----------            ------


TOTAL ASSETS                                                     $1,254,442            $9,632
                                                                 ==========            ======


<CAPTION>
                           LIABILITIES AND PARTNERSHIP CAPITAL
                           -----------------------------------

                                                                           December 31,
                                                                 ----------------------------


                                                                    1998                1997
                                                                 ----------            ------
<S>                                                              <C>                   <C>

Liabilities:

Accounts Payable and Accrued Expenses                            $   14,000            $    -
Payable to Affiliates (Note 5)                                            -             8,532
                                                                 ----------            ------

   TOTAL LIABILITIES                                                 14,000             8,532
                                                                 ----------            ------

Partnership Capital:

Capital - Limited Partners                                        1,228,038               100
Capital - General Partners                                           12,404             1,000
                                                                 ----------            ------

   TOTAL PARTNERSHIP CAPITAL                                      1,240,442             1,100
                                                                 ----------            ------

TOTAL LIABILITIES AND
   PARTNERSHIP CAPITAL                                           $1,254,442            $9,632
                                                                 ==========            ======



                     The accompanying notes are an integral
                       part of these financial statements.

</TABLE>                                 <PAGE>
<PAGE>

<TABLE>
                        COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                                    STATEMENTS OF INCOME
<CAPTION> 
                                                                      For the Years Ended
                                                                           December 31,
                                                                  ---------------------------


                                                                     1998                1997
                                                                  ---------             -----
<S>                                                               <C>                  <C>

                                           INCOME
                                           ------

Interest Income                                                   $     119             $   -
                                                                  ---------             -----


      TOTAL INCOME                                                      119                 -
                                                                  ---------             -----


                                          EXPENSES
                                          --------


Management Fees (Note 5)                                              7,813                 -
Organization Costs (Note 3)                                          82,363                 -
Professional Fees                                                    29,060                 -
Independent General Partners' Fees                                   12,000                 -
Other                                                                   663                 -
                                                                  ---------             -----


      TOTAL EXPENSES                                                131,899                 -
                                                                  ---------             -----

Net Loss before Net Realized Gains
   (Losses) and Unrealized Gains (Losses)                          (131,780)                -

Net Realized Gains (Losses)
   on Sales of Investments                                                -                 -

Net Unrealized Gains (Losses)
   on Investments                                                         -                 -
                                                                  ---------             -----


      NET LOSS                                                    $(131,780)            $   -
                                                                  =========             =====




                     The accompanying notes are an integral
                       part of these financial statements.

</TABLE>
                                 <PAGE>
<PAGE>
<TABLE>
                  COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                            STATEMENTS OF CASH FLOWS

<CAPTION> 
                                                               For the Years Ended December 31,
                                                                  ---------------------------


                                                                     1998               1997
                                                                  ---------           -------
<S>                                                               <C>                  <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:

   Net loss                                                       $(131,780)          $     -
   Adjustments to reconcile net loss
      to net cash used by operating activities:
   Decrease (increase) in deferred organization costs                 8,532            (8,532)
   Increase in accounts payable and accrued expenses                 14,000                 -
   (Decrease) increase in payable to affiliates                      (8,532)            8,532
   Purchase of portfolio investments                               (512,003)                -
                                                                  ---------           -------


      Net cash used in operating activities                        (629,783)                -
                                                                  ---------           -------


CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:

   Capital Contributions                                          1,371,122             1,100
                                                                  ---------           -------


      Net cash provided by financing activities                   1,371,122             1,100
                                                                  ---------           -------


      Net increase in cash and cash equivalents                     741,339             1,100

CASH AND CASH EQUIVALENTS:

   Beginning of year                                                  1,100                 -
                                                                  ---------           -------


   End of year                                                    $ 742,439           $ 1,100
                                                                  =========           =======



                     The accompanying notes are an integral
                      part of these financial statements.

</TABLE>
                                 <PAGE>
<PAGE>

<TABLE>

                      COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP

                      STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL

                     For the Years Ended December 31, 1998 and 1997



<CAPTION>
                                               -------------------------------------------
                                                LIMITED          GENERAL
                                                PARTNERS         PARTNERS         TOTAL
                                               ----------        --------       ----------
<S>                                            <C>               <C>            <C>

Balance, December 31, 1997                     $      100        $ 1,000        $    1,100

Contributions                                   1,358,400         12,722         1,371,122

Net Loss                                         (130,462)        (1,318)         (131,780)
                                               ----------        -------        ----------

Balance, December 31, 1998                     $1,228,038        $12,404        $1,240,442
                                               ==========        =======        ==========






                         The accompanying notes are an integral
                           part of these financial statements.

</TABLE>
                                         <PAGE>
<PAGE>

            COMMUNITY INVESTMENT PARTNERS III L.P., LLLP

                   NOTES TO FINANCIAL STATEMENTS


1.   GENERAL

     Partnership Organization
     ------------------------

          Community Investment Partners III L.P., LLLP (the
     "Partnership") was formed on July 23, 1997, under the Missouri
     Uniform Partnership Law and the Missouri Revised Uniform Limited
     Partnership Law. CIP Management, L.P., LLLP, the Managing General
     Partner, is a Missouri limited liability limited partnership
     originally formed on October 10, 1989 as a Missouri limited
     partnership and elected to register as a limited liability limited
     partnership on July 23, 1997. The general partner of CIP
     Management, L.P., LLLP is CIP Management, Inc., an indirect
     subsidiary of Edward D. Jones & Co., L.P.

     Business
     --------

          The Partnership elected to be a business development company
     under the Investment Company Act of 1940, as amended. As a
     business development company, the Partnership is required to
     invest at least 70% of its assets in qualifying investments as
     specified in the Investment Company Act. The Managing General
     Partner is responsible for making the Partnership's investment
     decisions.

          The Partnership will seek long-term capital appreciation by
     making investments in companies and other special investment
     situations. The Partnership is not permitted to engage in any
     other business or activity. The Partnership will dissolve on
     December 31, 2012, subject to the right of the Individual General
     Partners to extend the term for up to two additional two-year
     periods.

          The Managing General Partner expects to invest the net
     proceeds of the Partnership's offering (including amounts held in
     reserve) within two years of the date of the commencement of the
     offering.

     Risk of Ownership
     -----------------

          The purchase and ownership of Partnership Units involve a
     number of significant risks and other important factors. The
     portfolio company investments of the Partnership involve a high
     degree of business and financial risk that can result in
     substantial losses. Among these are the risks associated with
     investing in companies with little operating history, companies
     operating at a loss or with substantial variations in operating
     results from period to period, companies with the need for
     substantial additional capital to support expansion or achieve or
     maintain a competitive position, companies which may be highly
     leveraged, companies which may not be diversified and companies in
     which the Partnership may be the sole or primary lender. The
     Partnership intends to invest in only a few companies; therefore,
     a loss or other problem with a single investment would have a
     material adverse effect on the Partnership.


<PAGE>
<PAGE>

2.   ALLOCATION OF PARTNERSHIP PROFITS AND LOSSES

          Generally, profits will be allocated 99% to the Limited
     Partners and 1% to the General Partners until the Partners'
     Capital Accounts equal their undistributed Capital Contributions.
     Thereafter, profits will be allocated 90% to the Limited Partners
     and 10% to the General Partners in an amount sufficient to cause
     their Capital Accounts to equal an amount equal to (i) two times
     their Capital Contributions less (ii) cumulative distributions
     pursuant to paragraph 4.1 and paragraph 9.2.2 of the Partnership
     Agreement, at which time profits will be allocated 80% to the
     Limited Partners and 20% to the General Partners.

          Generally, losses will be allocated 99% to the Limited
     Partners and 1% to the General Partners;  provided, however, that
     losses will be allocated 80% to the Limited Partners and 20% to
     the General Partners to the extent of any prior allocation of
     profits which were made to the Partners on an 80%/20% basis. Next,
     losses will be allocated 90% to the Limited Partners and 10% to
     the General Partners to the extent any prior allocations of
     profits were made to the Partners on an 90%/10% basis. Thereafter,
     losses, if any, will be allocated to those Partners who bear the
     economic risk of loss.

          Partners should refer to the information set forth under the
     caption "Partnership Distributions and Allocations" in the
     Prospectus of the Partnership dated January 9, 1998, filed with
     the Securities and Exchange Commission pursuant to Rule 497(b)
     under the Securities Act of 1933, for more specific information.

<PAGE>
<PAGE>

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Cash and Cash Equivalents
     -------------------------

          All short-term investments with original maturities of three
     months or less are considered to be cash equivalents.

     Investment Transactions
     -----------------------

          All portfolio investments are carried at cost until
     significant developments affecting an investment provide a basis
     for revaluation. Thereafter, portfolio investments will be carried
     at fair value as obtained from outside sources or at a value
     determined quarterly by the Managing General Partner under the
     supervision of the Independent General Partners. Due to the
     inherent uncertainty of valuation, those estimated values for
     portfolio investments carried at cost may differ significantly
     from the values that would have been used had a ready market for
     the investment existed, and the differences could be material to
     the financial statements. Investments in securities traded on a
     national securities exchange will be valued at the latest reported
     sales price on the last business day of the period. If no sale has
     taken place, the securities will be valued at the last bid price.
     If no bid price has been reported, or if no exchange quotation is
     available, the securities will be valued at the quotation obtained
     from an outside broker. Investment transactions are recorded on a
     trade date basis. Income is recorded on an accrual basis.

     Use of Estimates
     ----------------

          The preparation of financial statements in conformity with
     generally accepted accounting principles requires management to
     make estimates and assumptions that affect the reported amounts of
     assets and liabilities and disclosure of contingent assets and
     liabilities as of the date of the financial statements and the
     reported amounts of revenues and expenses during the reporting
     period. Actual results could differ from those estimates.

     Organizational Costs
     --------------------

          Total organizational and offering expenses for the
     Partnership totaled $213,052, of which, $130,689 were paid by an
     affiliate. The remaining $82,363 of organization costs were
     expensed in accordance with AICPA Statement of Position 98-5,
     "Reporting on the Costs of Start-up Activities."

     Income Taxes
     ------------

          Income taxes have not been provided for as the Partnership
     is a limited partnership and each partner is liable for its own
     tax payments. Allocation of Partnership profits and losses for tax
     purposes is based upon taxable income which may differ from net
     income for financial reporting primarily due to differences
     between book and tax accounting for portfolio investments.

     Distributions
     -------------

          When excess cash, if any, becomes available, it is the
     Partnership's intent to make distributions on an annual basis. It
     is not anticipated that any investments will be sold until the
     later years of the Partnership. Accordingly, it is unlikely that
     any significant distributions of the proceeds from the disposition
     of investments will be made until the later years of the
     Partnership. No distributions were made for 1998 and distributions
     are unlikely during 1999.

<PAGE>
<PAGE>

4.   PER UNIT INFORMATION

          There is no market for the Limited Partnership interests.
     Per Unit Information is as follows:

<TABLE>
<CAPTION>
                                   For the Year Ended December 31, 1998
                                   ------------------------------------
<S>                                             <C>
      Number of unit holders                          111
                                                  =======

      Limited partnership units                    54,340

      General partnership units                       549
                                                  -------

      Total units outstanding                      54,889
                                                  =======

      Net asset value per unit                    $ 22.60
                                                  =======

      Net loss per unit                           $ (2.40)
                                                  =======
</TABLE>



5.   RELATED PARTY TRANSACTIONS

          The Partnership is furnished with certain non-reimbursed
     management and accounting services by affiliates, which are not
     reflected in the accompanying financial statements.

          The Managing General Partner performs management and
     administrative services for the operation of the Partnership. The
     Managing General Partner is paid an annual management fee of 1.5%
     of total assets, this fee for 1998 was $7,813. The Managing
     General Partner is also reimbursed by the Partnership for out of
     pocket expenses in connection with finding, evaluating,
     structuring, approving, monitoring and liquidating the
     Partnership's portfolio investments.

          Total offering expenses for the Partnership amounted to
     $213,052, of which, $130,689 were paid by an affiliate.

          The Partnership may place its General Partners on Boards of
     Directors of portfolio companies.

          The Managing General Partner of the Partnership is also the
     managing general partner of Community Investment Partners, L.P.
     and Community Investment Partners II, L.P., both business
     development companies.


<PAGE>
<PAGE>

6.   INVESTMENT TRANSACTIONS

          Following is a summary of portfolio investment transactions
     for the year ended December 31, 1998.

<TABLE>
<CAPTION>
                        Type of                                                              Realized
Company                 Investment                             Cost          Proceeds       Gain (Loss)
-------                 ----------                             ----          --------       -----------
<S>                     <C>                                 <C>              <C>            <C>
PURCHASES:

United Therapeutics
Corporation             Common Stock                         $100,000

Implemed, Inc.          Series D Convertible
                        Preferred Stock                       100,000

Protein Delivery Inc.   Series D Preferred Stock              100,001

                        10% Bridge Note, due
                        4/1/99 and One Warrant                 12,000

LipoMed, Inc.           Series B Convertible
                        Preferred stock                       100,002

OptiMark
Technologies, Inc.      Series B Convertible
                        Participating Preferred stock         100,000
                                                             --------

   TOTAL PURCHASES                                           $512,003
                                                             ========
</TABLE>




ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURES

     None

                                                 <PAGE>
<PAGE>

                              PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     There are two Independent General Partners and one Managing
General Partner of the Partnership. These Independent General Partners
and the Managing General Partner are responsible for the management and
administration of the Partnership. The General Partners are "interested
persons" of the Partnership as defined by the Investment Company Act,
but the Partnership has obtained an exemptive order from the Securities
and Exchange Commission permitting them to be considered disinterested
persons. The Independent General Partners provide overall guidance and
supervision with respect to the operation of the Partnership and perform
the various duties imposed on the directors of a business development
company by the Investment Company Act. In addition to general fiduciary
duties, the Independent General Partners supervise the management and
underwriting arrangement of the Partnership, the custody arrangement
with respect to portfolio securities, the selection of accountants,
fidelity bonding and transactions with affiliates.

Specific Information regarding the Independent General Partners:

     Thomas A. Hughes, 55, is the Assistant Vice President, Associate
General Counsel and Manager-Legal of The Detroit Edison Company, the
utility subsidiary of DTE Energy Company. He also serves as the
Associate General Counsel of DTE Energy Company. Headquartered in
Detroit, Michigan, Detroit Edison is Michigan's largest electric utility
serving two million customers in Southeastern Michigan. Prior to joining
Detroit Edison in 1978, Mr. Hughes served as General Counsel of the
Missouri Public Service Commission. Mr. Hughes has served as a Trustee
of the Detroit Metropolitan Bar Association Foundation, and as a member
of the Michigan State Bar Association Administrative Law Section Council
and is currently serving as a member of the Board of Directors of the
Michigan Chapter of the American Corporate Counsel Association. Mr.
Hughes does not own any units.

     Ralph G. Kelly, 42, joined Charter Communications, Inc. in 1993 as
Vice President -- Finance, a position he held until early 1994, when he
became Chief Financial Officer of CableMaxx, Inc., a wireless cable
television operator. Mr. Kelly returned as Senior Vice President --
Treasurer of Charter Communications, Inc. in February 1996, and has
responsibility for treasury operations, investor relations and financial
reporting. Mr. Kelly has worked in the cable industry since 1984 when he
joined Cencom Cable Associates, Inc. as Controller. Mr. Kelly was
promoted to Treasurer of Cencom Cable Associates, Inc. in 1989 and was
responsible for treasury management, loan compliance, budget
administration, supervision of internal audit and SEC reporting. Mr.
Kelly is a Certified Public Accountant and was in the audit division of
Arthur Andersen LLC from 1979 to 1984. Mr. Kelly owns 100 Units.

     CIP Management, L.P., LLLP (the "Managing General Partner") is the
Managing General Partner of Community Investment Partners III L.P.,
LLLP. The Managing General Partner is also managing general partner of
Community Investment Partners, L.P. and Community Investment Partners
II, L.P., both business development companies. The General Partners of
the Managing General Partner are CIP Management, Inc., a Missouri
corporation and a wholly-owned subsidiary of Edward D. Jones & Co.,
L.P., and Daniel A. Burkhardt.


<PAGE>
<PAGE>

The Directors and Officers of CIP Management's, Inc. are as follows:

     Daniel A. Burkhardt, 51, President, Treasurer and Director of CIP
Management, Inc. since October, 1989 and general partner of CIP
Management, L.P., LLLP since February 1990. He is a general partner of
The Jones Financial Companies, L.L.L.P., the parent company of Edward D.
Jones & Co., L.P., where he has specialized in investment banking and
structuring investments since 1980. He is also a director of St. Joseph
Light & Power Co. and SEMCO Energy, Inc. Mr. Burkhardt currently owns
2,000 Units.

     Ray A. Robbins, Jr., 54, Vice President and Director of CIP
Management, Inc. since October 1989. He is a general partner of The
Jones Financial Companies, L.L.L.P., the parent company of Edward D.
Jones & Co., L.P., where he has specialized in securities analysis since
1984, and where he was responsible for municipal bond transactions from
1975 to 1983. Mr. Robbins is Co-Chairman of the Edward D. Jones & Co.,
L.P. Investment Policy Committee. Mr. Robbins currently owns 1,000
Units.

     Marilyn A. Gaffney, 40, Secretary of CIP Management, Inc. since
October, 1989. She is a Limited Partner of The Jones Financial
Companies, L.L.L.P., the parent company of Edward D. Jones & Co., L.P.,
where she has been a senior investment adviser in investment banking
since 1980. Ms. Gaffney currently owns 100 Units.

ITEM 11.  EXECUTIVE COMPENSATION

     Each Independent General Partner will receive an annual fee of
$6,000 from the Partnership once the Partnership commences business
operations, a fee of $1,000 for each meeting attended, and all out-of-
pocket expenses relating to attendance at meetings of the Individual
General Partners. Independent General Partner fees totaled $12,000
during 1998.

     The information set forth under the caption "Partnership
Distributions and Allocations" in the Prospectus of the Partnership
dated January 9, 1998, filed with the Securities and Exchange Commission
pursuant to Rule 497(b) under the Securities Act of 1933, is
incorporated herein by reference.


<PAGE>
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT

     The information concerning the security ownership of the General
Partner, Independent General Partners and the Officers and Directors of
CIP Management, Inc., described in Part I, Item 1 and Part III, Item 10,
is herein incorporated by reference.

     The Managing General Partner has a 1% General Partner (549 units)
interest and a 4.97% (2,700 units) Limited Partner interest.

     As of March 15, 1999, no parties are known by the Partnership to
be the beneficial owners of more than 5% of the Units.

     The Partnership is not aware of any arrangement which may, at a
subsequent date, result in a change of control of the Partnership.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Certain relationships and related transactions, described in Part
III, Items 10 and 12, are herein incorporated by reference.

                              <PAGE>
<PAGE>

                              PART IV



ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
          ON FORM 8-K

     a.   The following documents are filed as part of this report:

          1.   Financial Statements:
               ---------------------

               See Index to Financial Statements and Supplementary
               Data contained in Item 8 of this Form 10-K.

          2.   Financial Statement Schedules:
               ------------------------------

               All financial statement schedules are omitted because
               they are not applicable, or the required information
               is included in the balance sheet or notes thereto.

          3.   Exhibits:
               ---------

               (3)  Amended and Restated Agreement of Limited
                    Partnership dated as of July 23, 1997. <F**>

               (4)  Form of Unit Certificate. <F*>

               (10) Management Agreement dated January 9, 1998,
                    between the Partnership and CIP Management,
                    L.P., LLLP.<F**>

               (28) Prospectus of the Partnership dated January 9,
                    1998, filed with the Securities and Exchange
                    Commission in connection with Registration
                    Statement No. 333-34363 on Form N-2 under the
                    Securities Act of 1933. <F**>

               [FN]
               <F*> Incorporated by reference to Exhibit A of the
                    Prospectus of the Partnership dated January 9,
                    1998 filed with the Securities and Exchange
                    Commission pursuant to Rule 497(b) under the
                    Securities Act of 1933.

               <F**>Incorporated by reference to the Partnership's
                    Registration Statement No. 333-34363 on Form N-2
                    under the Securities Act of 1933.

     b.   No reports on Form 8-K were filed during the quarter ended
          December 31, 1998.

     c.   Exhibits filed as part of this report are included in Item
          (14) (a)(3) above.

     d.   All financial statement schedules are omitted because they
          are not applicable, or the required information is included
          in the balance sheet or notes thereto.

                              <PAGE>
<PAGE>

                             SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) 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, on this 22nd day of March, 1999.


                       Community Investment Partners III L.P., LLLP
                       By:  CIP Management, L.P., LLLP, its
                            Managing General Partner

                       By:  CIP Management, Inc., its
                            Managing General Partner

                       /s/  Daniel A. Burkhardt, President
                       --------------------------------------
                       By:  Daniel A. Burkhardt, President


     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated.



/s/ Daniel A. Burkhardt
-----------------------------    General Partner of CIP Management
    Daniel A. Burkhardt          L.P., LLLP, President, Treasurer and
                                 Director of CIP Management, Inc.


/s/ Ray L. Robbins
-----------------------------    Vice President and Director of CIP
    Ray L. Robbins               Management, Inc.



/s/ Thomas A. Hughes
-----------------------------    Individual General Partner,
    Thomas A. Hughes             Community Investment Partners III L.P.,
                                 LLLP



/s/ Ralph G. Kelly
-----------------------------    Individual General Partner,
    Ralph G. Kelly               Community Investment Partners III L.P.,
                                 LLLP




                              <PAGE>
<PAGE>
<TABLE>
                         INDEX TO EXHIBITS

<CAPTION>
Exhibit
Number      Description of Exhibit                                    Page
------      ----------------------                                    ----
<C>         <S>                                                       <C>
(3)         Amended and Restated Certificate and Agreement
            of Limited Liability Limited Partnership dated
            as of January 9, 1998                                     <F*>

(4)         Form of Unit Certificate                                  <F*>

(10)        Management Agreement dated January 9, 1998,
            between the Partnership and CIP Management,
            L.P., LLLP                                                <F*>

(28)        Prospectus of the Partnership dated January 9, 1998,
            filed with the Securities and Exchange Commission
            in connection with Registration Statement
            No. 333-34363 on Form N-2 under the Securities Act
            of 1933                                                   <F*>




<FN>
______________________

<F*>Incorporated by reference

</TABLE>