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

                           FORM 10-QSB

           Quarterly Report Under Section 13 or 15(d)
             of The Securities Exchange Act of 1934

             For the Quarter Ended:  March 31, 2005

                Commission file number:  0-29274


           AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)


     State of Minnesota                    41-1789725
(State or other Jurisdiction of         (I.R.S. Employer
Incorporation or Organization)        Identification No.)


    30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
             (Address of Principal Executive Offices)

                       (651) 227-7333
                   (Issuer's telephone number)


                          Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)

Check  whether  the issuer (1) 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

         Transitional Small Business Disclosure Format:

                          Yes       No [X]


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP


                              INDEX




PART I. Financial Information

 Item 1. Balance Sheet as of March 31, 2005 and December 31, 2004

         Statements for the Periods ended March 31, 2005 and 2004:

            Income

            Cash Flows

            Changes in Partners' Capital

         Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

 Item 3. Controls and Procedures

PART II. Other Information

 Item 1. Legal Proceedings

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 Item 3. Defaults Upon Senior Securities

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

 Item 5. Other Information

 Item 6. Exhibits

         Signatures


<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                          BALANCE SHEET
              MARCH 31, 2005 AND DECEMBER 31, 2004

                           (Unaudited)

                             ASSETS

                                                    2005           2004
CURRENT ASSETS:
  Cash and Cash Equivalents                     $ 1,347,165    $ 5,295,303
  Receivables                                        18,809         18,809
                                                 -----------    -----------
      Total Current Assets                        1,365,974      5,314,112
                                                 -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                            6,782,311      5,560,626
  Buildings and Equipment                        12,313,949     10,191,754
  Accumulated Depreciation                       (1,307,543)    (1,193,144)
                                                 -----------    -----------
      Net Investments in Real Estate             17,788,717     14,559,236
                                                 -----------    -----------
          Total Assets                          $19,154,691    $19,873,348
                                                 ===========    ===========

                         LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.          $    35,309    $    36,234
  Distributions Payable                             405,897      1,011,957
  Unearned Rent                                      66,569              0
                                                 -----------    -----------
      Total Current Liabilities                     507,775      1,048,191
                                                 -----------    -----------
PARTNERS' CAPITAL:
  General Partners                                   24,036         25,818
  Limited Partners, $1,000 per Unit;
   24,000 Units authorized and issued;
   22,819 Units outstanding                      18,622,880     18,799,339
                                                 -----------    -----------
      Total Partners' Capital                    18,646,916     18,825,157
                                                 -----------    -----------
        Total Liabilities and Partners' Capital $19,154,691    $19,873,348
                                                 ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                       STATEMENT OF INCOME
                 FOR THE PERIODS ENDED MARCH 31

                           (Unaudited)

                                                       2005         2004

RENTAL INCOME                                     $   396,043    $   315,574

EXPENSES:
   Partnership  Administration  -  Affiliates          57,437         51,166
   Partnership Administration and Property
      Management - Unrelated Parties                    9,756          9,252
   Depreciation                                       114,399         88,363
                                                   -----------    -----------
        Total Expenses                                181,592        148,781
                                                   -----------    -----------

OPERATING INCOME                                      214,451        166,793

OTHER INCOME:
  Interest Income                                      16,399         13,141
  Gain on Sale of Real Estate                               0        137,068
                                                   -----------    -----------
      Total Other Income                               16,399        150,209
                                                   -----------    -----------

INCOME FROM CONTINUING OPERATIONS                     230,850        317,002

Income from Discontinued Operations                         0        169,584
                                                   -----------    -----------
NET INCOME                                        $   230,850    $   486,586
                                                   ===========    ===========
NET INCOME ALLOCATED:
   General Partners                               $     2,309    $     4,866
   Limited Partners                                   228,541        481,720
                                                   -----------    -----------
                                                  $   230,850    $   486,586
                                                   ===========    ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
  Continuing Operations                           $     10.02    $     13.70
  Discontinued Operations                                   0           7.33
                                                   -----------    -----------
      Total                                       $     10.02    $     21.03
                                                   ===========    ===========
Weighted Average Units Outstanding                     22,819         22,907
                                                   ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                     STATEMENT OF CASH FLOWS
                 FOR THE PERIODS ENDED MARCH 31

                           (Unaudited)

                                                      2005         2004
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                     $   230,850   $   486,586

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                     114,399       105,939
     Gain on Sale of Real Estate                            0      (265,704)
     Increase in Receivables                                0       (18,230)
     Decrease in Payable to
        AEI Fund Management, Inc.                        (925)      (97,785)
     Increase in Unearned Rent                         66,569        30,989
                                                   -----------   -----------
        Total Adjustments                             180,043      (244,791)
                                                   -----------   -----------
        Net Cash Provided By
            Operating Activities                      410,893       241,795
                                                   -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                      (3,343,880)   (1,992,154)
   Proceeds from Sale of Real Estate                        0     1,267,072
                                                   -----------   -----------
        Net Cash Used For
          Investing Activities                     (3,343,880)     (725,082)
                                                   -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                 (606,060)     (545,453)
   Distributions to Partners                         (409,091)     (409,092)
                                                   -----------   -----------
             Net Cash Used For
                 Financing Activities              (1,015,151)     (954,545)
                                                   -----------   -----------
NET DECREASE IN CASH
   AND CASH EQUIVALENTS                            (3,948,138)   (1,437,832)

CASH AND CASH EQUIVALENTS, beginning of period      5,295,303     6,018,352
                                                   -----------   -----------
CASH AND CASH EQUIVALENTS, end of period          $ 1,347,165   $ 4,580,520
                                                   ===========   ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
            STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                 FOR THE PERIODS ENDED MARCH 31

                           (Unaudited)


                                                                   Limited
                                                                 Partnership
                             General      Limited                   Units
                             Partners     Partners     Total     Outstanding


BALANCE, December 31, 2003  $ 28,987   $19,113,109   $19,142,096    22,907.49

  Distributions               (4,090)     (405,002)     (409,092)

  Net Income                   4,866       481,720       486,586
                             --------   -----------   -----------  ----------
BALANCE, March 31, 2004     $ 29,763   $19,189,827   $19,219,590    22,907.49
                             ========   ===========   ===========  ==========


BALANCE, December 31, 2004  $ 25,818   $18,799,339   $18,825,157    22,819.45

  Distributions               (4,091)     (405,000)     (409,091)

  Net Income                   2,309       228,541       230,850
                             --------   -----------   -----------  ----------
BALANCE, March 31, 2005     $ 24,036   $18,622,880   $18,646,916    22,819.45
                             ========   ===========   ===========  ==========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                         MARCH 31, 2005

                           (Unaudited)

(1)  The  condensed  statements included herein have been  prepared
     by  the Partnership, without audit, pursuant to the rules  and
     regulations  of  the Securities and Exchange  Commission,  and
     reflect   all  adjustments  which  are,  in  the  opinion   of
     management,  necessary to a fair statement of the  results  of
     operations for the interim period, on a basis consistent  with
     the  annual audited statements.  The adjustments made to these
     condensed   statements  consist  only  of   normal   recurring
     adjustments.   Certain information, accounting  policies,  and
     footnote    disclosures   normally   included   in   financial
     statements  prepared  in  accordance with  generally  accepted
     accounting principles have been condensed or omitted  pursuant
     to  such  rules  and  regulations,  although  the  Partnership
     believes  that  the  disclosures  are  adequate  to  make  the
     information  presented not misleading.  It is  suggested  that
     these  condensed financial statements be read  in  conjunction
     with  the  financial statements and the summary of significant
     accounting  policies  and  notes  thereto  included   in   the
     Partnership's latest annual report on Form 10-KSB.

(2)  Organization -

     AEI   Income   &   Growth   Fund  XXI  Limited   Partnership
     (Partnership)  was  formed to acquire and  lease  commercial
     properties   to   operating  tenants.    The   Partnership's
     operations  are  managed by AEI Fund  Management  XXI,  Inc.
     (AFM), the Managing General Partner.  Robert P. Johnson, the
     President and sole director of AFM, serves as the Individual
     General  Partner.  AFM is a wholly owned subsidiary  of  AEI
     Capital  Corporation of which Mr. Johnson  is  the  majority
     shareholder.  AEI Fund Management, Inc. (AEI), an  affiliate
     of  AFM, performs the administrative and operating functions
     for the Partnership.

     The   terms   of  the  Partnership  offering  call   for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced   operations  on  April  14,  1995  when   minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)  were  accepted.   On  January  31,  1997,  the
     offering  terminated when the maximum subscription limit  of
     24,000  Limited  Partnership Units was reached.   Under  the
     terms  of  the  Limited Partnership Agreement,  the  Limited
     Partners   and   General  Partners  contributed   funds   of
     $24,000,000 and $1,000, respectively.

     During operations, any Net Cash Flow, as defined, which  the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum.  Distributions to Limited Partners will be  made
     pro rata by Units.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(2)  Organization - (Continued)

     Any  Net  Proceeds  of Sale, as defined, from  the  sale  or
     financing of properties which the General Partners determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner: (i) first,  99%  to  the
     Limited  Partners and 1% to the General Partners  until  the
     Limited  Partners  receive an amount  equal  to:  (a)  their
     Adjusted  Capital Contribution plus (b) an amount  equal  to
     10%  of  their  Adjusted  Capital  Contribution  per  annum,
     cumulative  but not compounded, to the extent not previously
     distributed from Net Cash Flow;  (ii) any remaining  balance
     will  be distributed 90% to the Limited Partners and 10%  to
     the General Partners.  Distributions to the Limited Partners
     will be made pro rata by Units.

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated  first  in the same ratio in  which,  and  to  the
     extent,  Net  Cash Flow is distributed to the  Partners  for
     such year.  Any additional profits will be allocated in  the
     same  ratio  as  the  last  dollar  of  Net  Cash  Flow   is
     distributed.   Net losses from operations will be  allocated
     99% to the Limited Partners and 1% to the General Partners.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with the Partnership Agreement as  follows:  (i)
     first,  to  those  partners with deficit balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the Limited  Partners
     and  1%  to the General Partners until the aggregate balance
     in  the Limited Partners' capital accounts equals the sum of
     the Limited Partners' Adjusted Capital Contributions plus an
     amount  equal to 10% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated;  (iii)  third,  the  balance  of  any
     remaining  gain  will then be allocated 90% to  the  Limited
     Partners  and 10% to the General Partners.  Losses  will  be
     allocated 98% to the Limited Partners and 2% to the  General
     Partners.

     The  General Partners are not required to currently  fund  a
     deficit   capital   balance.   Upon   liquidation   of   the
     Partnership or withdrawal by a General Partner, the  General
     Partners will contribute to the Partnership an amount  equal
     to  the  lesser  of  the deficit balances in  their  capital
     accounts  or  1%  of  total Limited  Partners'  and  General
     Partners' capital contributions.

(3)  Reclassification -

     Certain items in the prior year's financial statements  have
     been  reclassified  to conform to 2005 presentation.   These
     reclassifications  had no effect on Partners'  capital,  net
     income or cash flows.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(4)  Investments in Real Estate -

     On  January 1, 2004, the Partnership owned 36.4787%  of  the
     Winn-Dixie store in Panama City, Florida.  During the  first
     quarter  of  2004,  the  Partnership sold  16.0762%  of  the
     property, in three separate transactions, to unrelated third
     parties.   The  Partnership received net  sale  proceeds  of
     $874,236,  which  resulted in a net gain of  $137,068.   The
     cost  and  related accumulated depreciation of the interests
     sold was $745,138 and $7,970, respectively.

     In February 2005, Winn-Dixie Montgomery, Inc., the lessee of
     the Winn-Dixie store in Panama City, Florida, and its parent
     company,  Winn-Dixie, Inc., filed for Chapter 11  bankruptcy
     reorganization.   Rents  are  current  and  the  Partnership
     expects to continue to receive all scheduled rents in future
     months  unless the Lease is rejected by Winn-Dixie.  If  the
     Lease  is  affirmed, Winn-Dixie must comply with  all  Lease
     terms.   If  the  Lease  is rejected,  Winn-Dixie  would  be
     required  to  return  possession  of  the  property  to  the
     Partnership  and  the Partnership would be  responsible  for
     real   estate   taxes  and  other  costs   associated   with
     maintaining the property.  The Partnership has evaluated the
     lease  and  property  value and decided  that  there  is  no
     impairment loss at this time.  At March 31, 2005,  the  book
     value of this property was $898,885.

     On  February  9,  2004,  the  Partnership  purchased  a  50%
     interest  in a Jared Jewelry store in Hanover, Maryland  for
     $1,989,135.   The  property is leased to  Sterling  Jewelers
     Inc. under a Lease Agreement with a primary term of 20 years
     and  annual  rental  payments of  $153,228.   The  remaining
     interest  in  the property was purchased by  AEI  Net  Lease
     Income & Growth Fund XX Limited Partnership, an affiliate of
     the Partnership.

     On  September  20,  2004, the Partnership  purchased  a  40%
     interest  in  an Eckerd drug store in Utica,  New  York  for
     $1,848,107.   The  property is leased to Eckerd  Corporation
     under a Lease Agreement with a primary term of 20 years  and
     annual  rental payments of $149,671.  The remaining interest
     in  the  property  was purchased by AEI Accredited  Investor
     Fund   2002  Limited  Partnership,  an  affiliate   of   the
     Partnership.

     On  January  14,  2005,  the  Partnership  purchased  a  40%
     interest  in a Jared Jewelry store in Auburn Hills, Michigan
     for $1,463,607.  The property is leased to Sterling Jewelers
     Inc.  under a Lease Agreement with a remaining primary  term
     of  15  years  and annual rental payments of $102,520.   The
     remaining  interest  in the property was  purchased  by  AEI
     Income   &  Growth  Fund  25  LLC,  an  affiliate   of   the
     Partnership.

     On  March 18, 2005, the Partnership purchased a 20% interest
     in  a CarMax auto superstore in Lithia Springs, Georgia  for
     $1,880,273.    The  property  is  leased  to   CarMax   Auto
     Superstores, Inc. under a Lease Agreement with  a  remaining
     primary  term  of 13.4 years and annual rental  payments  of
     $136,080.   The  remaining interests in  the  property  were
     purchased by AEI Income & Growth Fund 24 LLC, AEI  Income  &
     Growth Fund 25 LLC and AEI Private Net Lease Millennium Fund
     Limited Partnership, affiliates of the Partnership.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(5)  Payable to AEI Fund Management, Inc. -

     AEI  Fund  Management, Inc. performs the administrative  and
     operating functions for the Partnership.  The payable to AEI
     Fund   Management  represents  the  balance  due  for  those
     services.    This  balance  is  non-interest   bearing   and
     unsecured  and  is  to  be  paid in  the  normal  course  of
     business.

(6)  Discontinued Operations -

     On  January  13,  2004, the Partnership sold  its  remaining
     3.7372%  interest  in  the  Garden  Ridge  retail  store  in
     Pineville, North Carolina to an unrelated third party.   The
     Partnership  received net sale proceeds of  $392,836,  which
     resulted  in a net gain of $128,636.  At December 31,  2003,
     the  property  was classified as Real Estate Held  for  Sale
     with a book value of $264,200.

     In  June 2004, the Partnership entered into an agreement  to
     sell  the  Johnny  Carino's restaurant  in  Farmington,  New
     Mexico to an unrelated third party.  On October 6, 2004, the
     sale closed with the Partnership receiving net sale proceeds
     of $2,893,779, which resulted in a net gain of $786,594.  At
     the   time   of  sale,  the  cost  and  related  accumulated
     depreciation was $2,183,344 and $76,159, respectively.

     During  the  first  three  months  of  2005  and  2004,  the
     Partnership  distributed $63,841 and  $82,272  of  net  sale
     proceeds  to  the Limited and General Partners  as  part  of
     their quarterly distributions, which represented a return of
     capital  of  $2.77  and $3.56 per Limited Partnership  Unit,
     respectively.  The Partnership anticipates the remaining net
     sale  proceeds  will  either  be  reinvested  in  additional
     property or distributed to the Partners in the future.

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the three months ended March 31:

                                                2005       2004

     Rental Income                          $       0   $   59,004
     Property Management Expenses                   0         (480)
     Depreciation                                   0      (17,576)
     Gain on Disposal of Real Estate                0      128,636
                                             ---------   ----------
       Income from Discontinued Operations  $       0   $  169,584
                                             =========   ==========

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        The Management's Discussion and Analysis contains various
"forward  looking  statements"  within  the  meaning  of  federal
securities  laws  which  represent management's  expectations  or
beliefs  concerning future events, including statements regarding
anticipated  application of cash, expected  returns  from  rental
income,  growth  in revenue, taxation levels, the sufficiency  of
cash to meet operating expenses, rates of distribution, and other
matters.  These, and other forward looking statements made by the
Partnership,  must be evaluated in the context  of  a  number  of
factors that may affect the Partnership's financial condition and
results of operations, including the following:

    Market  and  economic conditions which affect the  value
    of  the  properties the Partnership owns and  the  cash
    from rental income such properties generate;

    the  federal  income tax consequences of rental  income,
    deductions,  gain  on  sales and other  items  and  the
    affects of these consequences for the Partners;

    resolution  by  the General Partners of  conflicts  with
    which they may be confronted;

    the   success  of  the  General  Partners  of   locating
    properties with favorable risk return characteristics;

    the effect of tenant defaults; and

    the  condition of the industries in which the  tenants  of
    properties owned by the Partnership operate.


The Application of Critical Accounting Policies

        The preparation of the Partnership's financial statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses  to  the  Partnership as opposed  to  other  funds  they
manage.

        The Partnership purchases properties and records them  in
the  financial  statements  at the lower  of  cost  or  estimated
realizable   value.   The  Partnership  initially   records   the
properties  at cost (including capitalized acquisition expenses).
The Partnership is required to periodically evaluate the carrying
value  of properties to determine whether their realizable  value
has  declined.   For  properties the Partnership  will  hold  and
operate, management determines whether impairment has occurred by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

       AEI Fund Management Inc. allocates expenses to each of the
funds  they manage primarily on the basis of the number of  hours
devoted  by  their employees to each fund's affairs.   They  also
allocate  expenses at the end of each month that are not directly
related to a fund's operations based upon the number of investors
in the fund and the fund's capitalization relative to other funds
they  manage.  The Partnership reimburses these expenses  subject
to detailed limitations contained in the Partnership Agreement.

         Management   of  the  Partnership  has   discussed   the
development  and selection of the above accounting estimates  and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.

Results of Operations

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  recognized rental income from continuing  operations
of  $396,043 and $315,574, respectively.  In 2005, rental  income
increased  due  to  additional rent received from  four  property
acquisitions  in  2004  and  2005 and  a  rent  increase  on  one
property.

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  incurred  Partnership administration  expenses  from
affiliated  parties of $57,437 and $51,166, respectively.   These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.   During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $9,756  and  $9,252, respectively.   These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct  administrative costs, outside audit costs,  taxes,
insurance and other property costs.

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  recognized interest income of $16,399  and  $13,141,
respectively.

       For the three months ended March 31, 2004, the Partnership
recognized gain on sale of real estate from continuing operations
of  $137,068  from the sale of the Winn-Dixie store.   Since  the
Partnership  retains an ownership interest in the  property,  the
operating  results  and  gain on sale of the  property  were  not
classified as discontinued operations.

        On January 1, 2004, the Partnership owned 36.4787% of the
Winn-Dixie  store  in  Panama City, Florida.   During  the  first
quarter  of 2004, the Partnership sold 16.0762% of the  property,
in  three separate transactions, to unrelated third parties.  The
Partnership  received  net  sale  proceeds  of  $874,236,   which
resulted  in  a  net  gain of $137,068.   The  cost  and  related
accumulated  depreciation of the interests sold was $745,138  and
$7,970, respectively.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        In February 2005, Winn-Dixie Montgomery, Inc., the lessee
of  the  Winn-Dixie store in Panama City, Florida, and its parent
company,  Winn-Dixie,  Inc.,  filed  for  Chapter  11  bankruptcy
reorganization.  Rents are current and the Partnership expects to
continue  to receive all scheduled rents in future months  unless
the  Lease  is rejected by Winn-Dixie.  If the Lease is affirmed,
Winn-Dixie  must comply with all Lease terms.  If  the  Lease  is
rejected,  Winn-Dixie would be required to return  possession  of
the  property  to  the Partnership and the Partnership  would  be
responsible for real estate taxes and other costs associated with
maintaining  the  property.  The Partnership  has  evaluated  the
lease  and property value and decided that there is no impairment
loss  at  this time.  At March 31, 2005, the book value  of  this
property was $898,885.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Partnership  includes  the operating  results  and  sale  of  the
property   in   discontinued  operations.    In   addition,   the
Partnership reclassifies the prior periods operating results  and
any  partial  sales  of the property to discontinued  operations.
For  the  three  months  ended March 31,  2004,  the  Partnership
recognized  income  from  discontinued  operations  of  $169,584,
representing rental income less property management expenses  and
depreciation  of $40,948 and gain on disposal of real  estate  of
$128,636.

        On  January 13, 2004, the Partnership sold its  remaining
3.7372%  interest in the Garden Ridge retail store in  Pineville,
North  Carolina  to  an unrelated third party.   The  Partnership
received net sale proceeds of $392,836, which resulted in  a  net
gain  of  $128,636.   At  December 31,  2003,  the  property  was
classified  as  Real Estate Held for Sale with a  book  value  of
$264,200.

       In June 2004, the Partnership entered into an agreement to
sell the Johnny Carino's restaurant in Farmington, New Mexico  to
an  unrelated third party.  On October 6, 2004, the  sale  closed
with  the  Partnership receiving net sale proceeds of $2,893,779,
which  resulted in a net gain of $786,594.  At the time of  sale,
the  cost and related accumulated depreciation was $2,183,344 and
$76,159, respectively.

        In  2004, the Partnership realized significant gains from
the  sale  of property.  While the real estate market is expected
to  remain  attractive for sellers of property, there can  be  no
assurance the Partnership will be able to achieve a similar level
of   sales  activity  or  sales  profitability  in  2005  due  to
unforeseen  changes in the real estate market.   In addition,  it
is likely the Partnership will curtail its selling activity as it
is  becoming more difficult to find attractive property in  which
to reinvest the proceeds from property sales.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   In addition, leases may contain  rent  clauses
which  entitle  the  Partnership to receive  additional  rent  in
future  years  if gross receipts for the property exceed  certain
specified  amounts.  Increases in sales volumes of  the  tenants,
due to inflation and real sales growth, may result in an increase
in rental income over the term of the leases.  Inflation also may
cause the real estate to appreciate in value.  However, inflation
and  changing prices may have an adverse impact on the  operating
margins  of  the  properties' tenants, which could  impair  their
ability  to  pay rent and subsequently reduce the Net  Cash  Flow
available for distributions.

Liquidity and Capital Resources

        During  the  three  months  ended  March  31,  2005,  the
Partnership's cash balances decreased $3,948,138 as a  result  of
cash  used  to purchase property and distributions  paid  to  the
Partners  in  excess of cash generated from operating activities.
During  the  three months ended March 31, 2004, the Partnership's
cash  balances decreased $1,437,832 as a result of cash  used  to
purchase  property  and distributions paid  to  the  Partners  in
excess  of  cash generated from operating activities, which  were
partially offset by cash generated from the sale of property.

        Net  cash provided by operating activities increased from
$241,795  in 2004 to $410,893 in 2005 as a result of an  increase
in  total  rental  and  interest income in 2005  and  net  timing
differences  in the collection of payments from the  lessees  and
the  payment  of  expenses, which were  partially  offset  by  an
increase  in  Partnership administration and property  management
expenses in 2005.

        The  major components of the Partnership's cash flow from
investing activities are investments in real estate and  proceeds
from  the  sale  of real estate.  During the three  months  ended
March 31, 2004, the Partnership generated cash flow from the sale
of  real  estate  of $1,267,072.  During the three  months  ended
March 31, 2005 and 2004, the Partnership expended $3,343,880  and
$1,992,154, respectively, to invest in real properties (inclusive
of  acquisition  expenses)  as  the Partnership  reinvested  cash
generated from property sales.

        On  February  9,  2004, the Partnership purchased  a  50%
interest  in  a  Jared  Jewelry store in  Hanover,  Maryland  for
$1,989,135.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental payments of $153,228.  The remaining  interest  in
the  property was purchased by AEI Net Lease Income & Growth Fund
XX Limited Partnership, an affiliate of the Partnership.

        On  September 20, 2004, the Partnership purchased  a  40%
interest  in  an  Eckerd  drug  store  in  Utica,  New  York  for
$1,848,107.  The property is leased to Eckerd Corporation under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $149,671.  The remaining interest in the property was
purchased   by   AEI  Accredited  Investor  Fund   2002   Limited
Partnership, an affiliate of the Partnership.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        On  January  14,  2005, the Partnership purchased  a  40%
interest  in a Jared Jewelry store in Auburn Hills, Michigan  for
$1,463,607.   The  property is leased to Sterling  Jewelers  Inc.
under a Lease Agreement with a remaining primary term of 15 years
and  annual rental payments of $102,520.  The remaining  interest
in the property was purchased by AEI Income & Growth Fund 25 LLC,
an affiliate of the Partnership.

        On  March  18,  2005,  the Partnership  purchased  a  20%
interest  in a CarMax auto superstore in Lithia Springs,  Georgia
for   $1,880,273.   The  property  is  leased  to   CarMax   Auto
Superstores,  Inc.  under  a  Lease Agreement  with  a  remaining
primary  term  of  13.4  years  and  annual  rental  payments  of
$136,080.  The remaining interests in the property were purchased
by  AEI Income & Growth Fund 24 LLC, AEI Income & Growth Fund  25
LLC   and   AEI   Private  Net  Lease  Millennium  Fund   Limited
Partnership, affiliates of the Partnership.

        The  Partnership's primary use of cash flow,  other  than
investment   in  real  estate,  is  distribution  and  redemption
payments  to  Partners.   The Partnership  declares  its  regular
quarterly distributions before the end of each quarter  and  pays
the  distribution in the first ten days after  the  end  of  each
quarter.    The  Partnership  attempts  to  maintain   a   stable
distribution  rate from quarter to quarter.  Redemption  payments
are  paid  to  redeeming Partners in the fourth quarter  of  each
year.

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  declared  distributions of  $409,091  and  $409,092,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of $405,000 and $405,002 and the General  Partners
received  distributions  of $4,091 and $4,090  for  the  periods,
respectively.   In  December  2004, the  Partnership  declared  a
special  distribution  of $606,061 of net  sale  proceeds,  which
resulted in a higher distribution payable at December 31, 2004.

        During  the  first  three months of 2005  and  2004,  the
Partnership distributed $63,841 and $82,272 of net sale  proceeds
to  the  Limited and General Partners as part of their  quarterly
distributions, which represented a return of capital of $2.77 and
$3.56   per   Limited   Partnership  Unit,   respectively.    The
Partnership  anticipates the remaining  net  sale  proceeds  will
either be reinvested in additional property or distributed to the
Partners in the future.

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be acquired at a discount.  The Partnership will not be obligated
to purchase in any year any number of Units that, when aggregated
with  all  other transfers of Units that have occurred since  the
beginning   of  the  same  calendar  year  (excluding   Permitted
Transfers as defined in the Partnership Agreement), would  exceed
5%  of the total number of Units outstanding on January 1 of such
year.  In no event shall the Partnership be obligated to purchase
Units if, in the sole discretion of the Managing General Partner,
such  purchase  would  impair the capital  or  operation  of  the
Partnership.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        During  2004, five Limited Partners redeemed a  total  of
88.04  Partnership  Units  for $53,859  in  accordance  with  the
Partnership  Agreement.   The Partnership  acquired  these  Units
using Net Cash Flow from operations.  In prior years, a total  of
49  Limited  Partners  redeemed 1,092.51  Partnership  Units  for
$885,943.    The  redemptions  increase  the  remaining   Limited
Partners' ownership interest in the Partnership.  As a result  of
these   redemption  payments  and  pursuant  to  the  Partnership
Agreement, the General Partners received distributions of $544 in
2004.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations on both a short-term and long-term basis.

ITEM 3. CONTROLS AND PROCEDURES.

       (a) Evaluation of disclosure controls and procedures

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the  Managing  General Partner of the Partnership  evaluated  the
effectiveness  of  the  design and operation  of  its  disclosure
controls  and procedures (as defined in Rule 13a-14(c) under  the
Exchange  Act).   Based upon that evaluation, the  President  and
Chief Financial Officer of the Managing General Partner concluded
that,  as  of  the end of the period covered by this report,  the
disclosure  controls  and  procedures  of  the  Partnership   are
adequately  designed to ensure that information  required  to  be
disclosed  by  us  in  the reports we file or  submit  under  the
Exchange  Act  is recorded, processed, summarized  and  reported,
within the time periods specified in applicable rules and forms.

       (b)  Changes in internal controls

         There   were   no  significant  changes  made   in   the
Partnership's  internal controls during the  most  recent  period
covered  by  this  report that have materially affected,  or  are
reasonably   likely  to  materially  affect,  the   Partnership's
internal control over financial reporting.


                    PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

       There  are no material pending legal proceedings to  which
  the  Partnership  is  a  party or of  which  the  Partnership's
  property is subject.

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS

        (a)  During  the  period  covered  by  this  report,  the
Partnership  did  not  sell any equity securities  that  are  not
registered under the Securities Act of 1933.

       (b) Not applicable.

                    PART II - OTHER INFORMATION
                           (Continued)

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS  (Continued)

        (c) Pursuant to Section 7.7 of the Partnership Agreement,
each  Limited  Partner  has the right to  present  Units  to  the
Partnership  for  purchase by submitting notice to  the  Managing
General  Partner  during September of each  year.   The  purchase
price  of  the  Units  is  based on a formula  specified  in  the
Partnership  Agreement.  Units tendered to  the  Partnership  are
redeemed  on  October 1st of each year subject to  the  following
limitations.  The Partnership will not be obligated  to  purchase
in  any  year any number of Units that, when aggregated with  all
other  transfers of Units that have occurred since the  beginning
of  the  same  calendar  year (excluding Permitted  Transfers  as
defined  in the Partnership Agreement), would exceed  5%  of  the
total number of Units outstanding on January 1 of such year.   In
no event shall the Partnership be obligated to purchase Units if,
in  the  sole  discretion of the Managing General  Partner,  such
purchase   would   impair  the  capital  or  operation   of   the
Partnership.   During  the period covered  by  this  report,  the
Partnership did not purchase any Units.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None

ITEM 5.OTHER INFORMATION

      None.

ITEM 6.EXHIBITS

                           Description

    31.1  Certification  of Chief Executive  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2  Certification  of Chief Financial  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    32    Certification  of  Chief Executive  Officer  and  Chief
    Financial Officer of General Partner pursuant to Section  906
    of the Sarbanes-Oxley Act of 2002.


                           SIGNATURES

        In  accordance with the requirements of the Exchange Act,
the  registrant caused this report to be signed on its behalf  by
the undersigned, thereunto duly authorized.


Dated:  May 6, 2005           AEI Income & Growth Fund XXI
                              Limited Partnership
                              By:  AEI Fund Management XXI, Inc.
                              Its: Managing General Partner



                              By: /s/ Robert P Johnson
                                      Robert P. Johnson
                                      President
                                      (Principal Executive Officer)



                              By: /s/ Patrick W Keene
                                      Patrick W. Keene
                                      Chief Financial Officer
                                      (Principal Accounting Officer)