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:  September 30, 1999

                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.)


  1300 Minnesota World Trade Center, 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 September 30, 1999 and December 31, 1998

          Statements for the Periods ended September 30, 1999  and 1998:

           Income

           Cash Flows

           Changes in Partners' Capital

         Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

PART II.Other Information

 Item 1. Legal Proceedings

 Item 2. Changes in Securities

 Item 3. Defaults Upon Senior Securities

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

 Item 5. Other Information

 Item 6. Exhibits and Reports on Form 8-K

<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                          BALANCE SHEET

            SEPTEMBER 30, 1999 AND DECEMBER 31, 1998

                           (Unaudited)

                             ASSETS

                                                      1999            1998

CURRENT ASSETS:
  Cash and Cash Equivalents                       $   908,516     $   557,646
  Receivables                                               0          16,052
                                                   -----------     -----------
      Total Current Assets                            908,516         573,698
                                                   -----------     -----------
INVESTMENTS IN REAL ESTATE:
  Land                                              6,719,763       6,921,884
  Buildings and Equipment                          11,528,125      11,350,021
  Construction in Progress                                  0         289,014
  Property Acquisition Costs                                0          10,782
  Accumulated Depreciation                         (1,149,973)       (816,805)
                                                   -----------     -----------
      Net Investments in Real Estate               17,097,915      17,754,896
                                                   -----------     -----------
         Total Assets                             $18,006,431     $18,328,594
                                                   ===========     ===========


                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    33,301     $    54,136
  Distributions Payable                               390,971         451,171
                                                   -----------     -----------
      Total Current Liabilities                       424,272         505,307
                                                   -----------     -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                    (33,364)        (30,953)
  Limited Partners, $1,000 Unit Value;
   24,000 Units authorized and issued;
   23,829 Units outstanding                        17,615,523      17,854,240
                                                   -----------     -----------
      Total Partners' Capital                      17,582,159      17,823,287
                                                   -----------     -----------
        Total Liabilities and Partners' Capital   $18,006,431     $18,328,594
                                                   ===========     ===========

 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 SEPTEMBER 30

                           (Unaudited)


                               Three Months Ended         Nine Months Ended
                             9/30/99        9/30/98    9/30/99        9/30/98

INCOME:
   Rent                     $ 465,581     $ 452,922   $1,420,395    $1,247,467
   Investment Income            7,444        14,374       14,045       140,616
                             ---------     ---------   ----------    ----------
        Total Income          473,025       467,296    1,434,440     1,388,083
                             ---------     ---------   ----------    ----------

EXPENSES:
   Partnership Administration -
     Affiliates                57,109        58,163      175,086       187,294
   Partnership Administration
     and Property Management -
     Unrelated Parties         22,472        30,853       66,748        94,495
   Depreciation               127,276       123,898      384,696       324,522
                             ---------     ---------   ----------    ----------
        Total Expenses        206,857       212,914      626,530       606,311
                             ---------     ---------   ----------    ----------

OPERATING INCOME              266,168       254,382      807,910       781,772

GAIN ON SALE OF REAL ESTATE   163,463        65,440      163,463       235,377
                             ---------     ---------   ----------    ----------
NET INCOME                  $ 429,631     $ 319,822   $  971,373    $1,017,149
                             =========     =========   ==========    ==========

NET INCOME ALLOCATED:
   General Partners         $   4,296     $   3,198   $    9,714    $   10,171
   Limited Partners           425,335       316,624      961,659     1,006,978
                             ---------     ---------   ----------    ----------
                            $ 429,631     $ 319,822   $  971,373    $1,017,149
                             =========     =========   ==========    ==========

NET INCOME PER
 LIMITED PARTNERSHIP UNIT
 (23,829 weighted average
 Units outstanding in 1999
 and 1998)                  $   17.85     $   13.29   $    40.36    $    42.26
                             =========     =========   ==========    ==========


 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 SEPTEMBER 30

                           (Unaudited)

                                                       1999          1998

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                       $   971,373   $ 1,017,149

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                       384,696       324,522
     Gain on Sale of Real Estate                       (163,463)     (235,377)
     Decrease in Receivables                             16,052       159,343
     Decrease in Payable to
        AEI Fund Management, Inc.                       (20,835)      (33,175)
     Increase in Unearned Rent                                0        24,200
                                                     -----------   -----------
        Total Adjustments                               216,450       239,513
                                                     -----------   -----------
        Net Cash Provided By
        Operating Activities                          1,187,823     1,256,662
                                                     -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                          (221,884)   (2,475,090)
   Proceeds from Sale of Real Estate                    657,632       862,718
                                                     -----------   -----------
        Net Cash Used For
        Investing Activities                            435,748    (1,612,372)
                                                     -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase (Decrease) in Distributions Payable         (60,200)      156,409
   Distributions to Partners                         (1,212,501)   (1,454,547)
                                                     -----------   -----------
        Net Cash Used For
         Financing Activities                        (1,272,701)   (1,298,138)
                                                     -----------   -----------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                 350,870    (1,653,848)

CASH AND CASH EQUIVALENTS, beginning of period          557,646     2,506,790
                                                     -----------   -----------
CASH AND CASH EQUIVALENTS, end of period            $   908,516   $   852,942
                                                     ===========   ===========

 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 SEPTEMBER 30

                           (Unaudited)

                                                                    Limited
                                                                  Partnership
                             General      Limited                    Units
                             Partners     Partners      Total     Outstanding


BALANCE, December 31, 1997   $(24,706)  $18,472,657   $18,447,951    23,828.87

  Distributions               (14,546)   (1,440,001)   (1,454,547)

  Net Income                   10,171     1,006,978     1,017,149
                              --------   -----------   -----------  ----------
BALANCE, September 30, 1998  $(29,081)  $18,039,634   $18,010,553    23,828.87
                              ========   ===========   ===========  ==========


BALANCE, December 31, 1998   $(30,953)  $17,854,240   $17,823,287    23,828.87

  Distributions               (12,125)   (1,200,376)   (1,212,501)

  Net Income                    9,714       961,659       971,373
                              --------   -----------   -----------  ----------
BALANCE, September 30, 1999  $(33,364)  $17,615,523   $17,582,159    23,828.87
                              ========   ===========   ===========  ==========

 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

                       SEPTEMBER 30, 1999

                           (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 of  the  Partnership.
     Robert  P.  Johnson, the President and sole  shareholder  of
     AFM,  serves  as  the  Individual  General  Partner  of  the
     Partnership.  An affiliate of AFM, AEI Fund Management, Inc.
     (AEI),  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
     Partnership    offering   terminated   when   the    maximum
     subscription  limit  of  24,000  Limited  Partnership  Units
     ($24,000,000) 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 the  operation
     of the Partnership, 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 the Partnership's 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  the  Partnership's
     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 the Partnership's 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.

        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(3)  Investments in Real Estate -

     On  December  21,  1995, the Partnership purchased  a  34.0%
     interest  in  a  Media Play retail store  in  Apple  Valley,
     Minnesota  for $1,414,060.  The property was leased  to  The
     Musicland Group, Inc. (MGI) under a Lease Agreement  with  a
     primary  term  of  18  years and annual rental  payments  of
     $139,587.

     In  December,  1996,  the Partnership  and  MGI  reached  an
     agreement in which MGI would buy out and terminate the Lease
     Agreement  by making a payment of $800,000, which was  equal
     to  approximately two years' rent.  The Partnership's  share
     of  such  payment was $272,000.  A specialist in  commercial
     property  leasing has been retained to locate a  new  tenant
     for  the  property.   While  the  property  is  vacant,  the
     Partnership  is  responsible for the real estate  taxes  and
     other costs required to maintain the property.

     As  of  December  31, 1997, based on an analysis  of  market
     conditions in the area, it was determined the fair value  of
     the   Partnership's   interest  in  the   Media   Play   was
     approximately $748,000.  In the fourth quarter  of  1997,  a
     charge  to operations for real estate impairment of $580,200
     was  recognized,  which is the difference between  the  book
     value  at  December 31, 1997 of $1,328,200 and the estimated
     market  value of $748,000.  The charge was recorded  against
     the cost of the land, building and equipment.

     On  July 8, 1997, the Partnership purchased a parcel of land
     in  Livonia, Michigan for $1,074,384.  The land is leased to
     Champps  under a Lease Agreement with a primary term  of  20
     years  and  annual  rental payments of  $75,207.   Effective
     January  3, 1998, the annual rent was increased to $115,496.
     Simultaneously   with  the  purchase  of   the   land,   the
     Partnership  entered into a Development Financing  Agreement
     under  which  the Partnership advanced funds to Champps  for
     the  construction of a Champps Americana restaurant  on  the
     site.   Initially, the Partnership charged interest  on  the
     advances at a rate of 7.0%.  Effective January 3, 1998,  the
     interest  rate  was increased to 10.75%.  On May  19,  1998,
     after the development was completed, the Lease Agreement was
     amended  to  require  annual rental  payments  of  $429,135.
     Total  acquisition costs, including the cost  of  the  land,
     were $4,150,061.

     On August 28, 1998, the Partnership purchased a 25% interest
     in  a parcel of land in Centerville, Ohio for $462,747.  The
     land is leased to Americana Dining Corporation (ADC) under a
     Lease  Agreement with a primary term of 20 years and  annual
     rental  payments of $32,392.  Effective December  25,  1998,
     the  annual  rent was increased to $48,588.   Simultaneously
     with  the purchase of the land, the Partnership entered into
     a   Development   Financing  Agreement   under   which   the
     Partnership advanced funds to ADC for the construction of  a
     Champps  Americana restaurant on the site.   Initially,  the
     Partnership charged interest on the advances at  a  rate  of
     7%.   Effective  December 25, 1998, the  interest  rate  was
     increased  to  10.5%.   On  January  27,  1999,  after   the
     development  was completed, the Lease Agreement was  amended
     to   require  annual  rental  payments  of  $101,365.    The
     Partnership's   share  of  the  total   acquisition   costs,
     including the cost of the land, was $984,426.  The remaining
     interests in the Fund property are owned by AEI Real  Estate
     Fund  XVII  Limited Partnership, AEI Real Estate Fund  XVIII
     Limited  Partnership  and  AEI Income  &  Growth  Fund  XXII
     Limited Partnership, affiliates of the Partnership.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(3)  Investments in Real Estate - (Continued)

     Through December 31, 1998, the Partnership sold 40.7615%  of
     its   interest  in  the  Champps  Americana  restaurant   in
     Columbus,  Ohio, in six separate transactions  to  unrelated
     third  parties.   The Partnership received  total  net  sale
     proceeds of $1,383,508 which resulted in a total net gain of
     $341,928.    The   total   cost  and   related   accumulated
     depreciation  of  the  interests  sold  was  $1,087,502  and
     $45,922,  respectively.  For the nine months ended September
     30, 1998, the net gain was $235,377.

     During  the  three  months  ended September  30,  1999,  the
     Partnership  sold  63.4768% of its interest  in  the  Arby's
     restaurant in three separate transactions to unrelated third
     parties.   The Partnership received total net sale  proceeds
     of  $657,632 which resulted in a total net gain of $163,463.
     The  total cost and related accumulated depreciation of  the
     interest sold was $545,697 and $51,528, respectively.

     Subsequent  to September 30, 1999, the Partnership  sold  an
     additional 21.5614% of its interest in the ArbyOs restaurant
     to  an unrelated third party.  The Partnership received  net
     sale proceeds of approximately $224,000 which resulted in  a
     net gain of approximately $56,000.

     In   September,  1999,  the  Partnership  entered  into   an
     agreement  to sell the Caribou Coffee store to an  unrelated
     third party.  On October 26, 1999, the sale closed with  the
     Partnership  receiving  net sale proceeds  of  approximately
     $1,575,000 for its interest in the property, which  resulted
     in a net gain of approximately $323,000.

     During  the  first  nine  months  of  1999  and  1998,   the
     Partnership distributed $19,895 and $348,252 of the net sale
     proceeds  to  the Limited and General Partners  as  part  of
     their  regular  quarterly distributions which represented  a
     return   of   capital  of  $0.83  and  $14.47  per   Limited
     Partnership Unit, respectively.

(4)  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.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

      For the nine months ended September 30, 1999 and 1998,  the
Partnership   recognized   rental  income   of   $1,420,395   and
$1,247,467,   respectively.   During  the   same   periods,   the
Partnership  earned  investment income of $14,045  and  $140,616,
respectively.   In 1999, rental income increased primarily  as  a
result of rent received from the Champps Americana restaurants in
Livonia, Michigan and Centerville, Ohio.  The increase in  rental
income  was  partially offset by a decrease in investment  income
earned on subscription and sale proceeds prior to the purchase of
the properties.

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

        Musicland Group, Inc. (MGI), the lessee of the Media Play
retail  store  in  Apple Valley, Minnesota experienced  financial
difficulties and was aggressively restructuring its organization.
As  part of the restructuring, the Partnership and MGI reached an
agreement  in  December, 1996 in which  MGI  would  buy  out  and
terminate  the Lease Agreement by making a payment  of  $800,000,
which   is   equal  to  approximately  two  years'   rent.    The
Partnership's share of such payment was $272,000.   A  specialist
in  commercial property leasing has been retained to locate a new
tenant  for  the  property.  While the property  is  vacant,  the
Partnership  is responsible for the real estate taxes  and  other
costs required to maintain the property.

        As  of  December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value  of  the
Partnership's  interest  in  the  Media  Play  was  approximately
$748,000.   In the fourth quarter of 1997, a charge to operations
for  real estate impairment of $580,200 was recognized, which  is
the  difference between the book value at December  31,  1997  of
$1,328,200  and  the  estimated market value  of  $748,000.   The
charge  was  recorded against the cost of the land, building  and
equipment.

        During the nine months ended September 30, 1999 and 1998,
the  Partnership  paid  Partnership  administration  expenses  to
affiliated parties of $175,086 and $187,294, 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  $66,748 and $94,495, respectively.   These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct administrative costs, outside audit and  accounting
costs,  taxes, insurance and other property  costs.  The decrease
in  these expenses in 1999, when compared to 1998, is the  result
of  expenses incurred in 1998 related to the Media Play situation
discussed above.

         As   of  September  30,  1999,  the  Partnership's  cash
distribution rate was 6.5% on an annualized basis.  Distributions
of  Net Cash Flow to the General Partners are subordinated to the
Limited Partners as required in the Partnership Agreement.  As  a
result, 99% of distributions and income were allocated to Limited
Partners and 1% to the General Partners.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   The  Leases contain cost of living increases  which
will result in an increase in rental income over the term of  the
Leases.   Inflation also may cause the Partnership's real  estate
to  appreciate in value.  However, inflation and changing  prices
may  also have an adverse impact on the operating margins of  the
properties' tenants which could impair their ability to pay  rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.

       The Year 2000 issue is the result of computer systems that
use  two  digits rather than four to define the applicable  year,
which  may prevent such systems from accurately processing  dates
ending  in  the  Year  2000 and beyond.   This  could  result  in
computer  system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or  receive  electronic data, or to engage  in  routine  business
activities.

        AEI  Fund  Management, Inc. (AEI) performs all management
services  for  the  Partnership.   In  1998,  AEI  completed   an
assessment of its computer hardware and software systems and  has
replaced or upgraded certain computer hardware and software using
the  assistance  of  outside vendors.  AEI has  received  written
assurance  from  the equipment and software manufacturers  as  to
Year  2000  compliance.   The  costs associated  with  Year  2000
compliance have not been, and are not expected to be, material.


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

        The  Partnership intends to monitor and communicate  with
tenants regarding Year 2000 compliance, although there can be  no
assurance  that the systems of the various tenants will  be  Year
2000 compliant.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  1999,  the
Partnership's cash balances increased $350,870 mainly as a result
of  proceeds  received  from  the sale  of  property.   Net  cash
provided  by  operating activities decreased from  $1,256,662  in
1998  to  $1,187,823  in 1999 mainly as a result  of  net  timing
differences  in the collection of payments from the  lessees  and
the  payment  of  expenses, which were  partially  offset  by  an
increase in income and a decrease in expenses in 1999.

        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 nine  months  ended
September  30,  1999 and 1998, the Partnership expended  $221,884
and  $2,475,090,  respectively,  to  invest  in  real  properties
(inclusive  of  acquisition expenses).  During the same  periods,
the  Partnership generated cash flow from the sale of real estate
of $657,632 and $862,718, respectively.

        On  July  8, 1997, the Partnership purchased a parcel  of
land in Livonia, Michigan for $1,074,384.  The land is leased  to
Champps  under a Lease Agreement with a primary term of 20  years
and  annual  rental  payments of $75,207.  Effective  January  3,
1998,  the annual rent was increased to $115,496.  Simultaneously
with  the  purchase of the land, the Partnership entered  into  a
Development  Financing  Agreement  under  which  the  Partnership
advanced  funds  to  Champps for the construction  of  a  Champps
Americana  restaurant  on the site.  Initially,  the  Partnership
charged  interest on the advances at a rate of  7.0%.   Effective
January  3, 1998, the interest rate was increased to 10.75%.   On
May  19,  1998,  after the development was completed,  the  Lease
Agreement  was  amended  to  require annual  rental  payments  of
$429,135.   Total acquisition costs, including the  cost  of  the
land, were $4,150,061.

        On  August  28,  1998, the Partnership  purchased  a  25%
interest  in a parcel of land in Centerville, Ohio for  $462,747.
The land is leased to Americana Dining Corporation (ADC) under  a
Lease Agreement with a primary term of 20 years and annual rental
payments  of  $32,392.  Effective December 25, 1998,  the  annual
rent  was increased to $48,588.  Simultaneously with the purchase
of the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to  ADC  for
the  construction of a Champps Americana restaurant on the  site.
Initially, the Partnership charged interest on the advances at  a
rate  of 7%.  Effective December 25, 1998, the interest rate  was
increased  to 10.5%.  On January 27, 1999, after the  development
was  completed, the Lease Agreement was amended to require annual
rental  payments  of $101,365.  The Partnership's  share  of  the
total  acquisition costs, including the cost  of  the  land,  was
$984,426.  The remaining interests in the Fund property are owned
by AEI Real Estate Fund XVII Limited Partnership, AEI Real Estate
Fund  XVIII Limited Partnership and AEI Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.

        Through  December 31, 1998, the Partnership sold 40.7615%
of  its interest in the Champps Americana restaurant in Columbus,
Ohio,  in  six separate transactions to unrelated third  parties.
The  Partnership received total net sale proceeds  of  $1,383,508
which  resulted in a total net gain of $341,928.  The total  cost
and  related accumulated depreciation of the interests  sold  was
$1,087,502 and $45,922, respectively.  For the nine months  ended
September 30, 1998, the net gain was $235,377.


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

        During  the  three months ended September 30,  1999,  the
Partnership  sold  63.4768%  of  its  interest  in   the   Arby's
restaurant  in  three separate transactions  to  unrelated  third
parties.   The  Partnership received total net sale  proceeds  of
$657,632  which  resulted in a total net gain of  $163,463.   The
total  cost and related accumulated depreciation of the  interest
sold was $545,697 and $51,528, respectively.

        Subsequent to September 30, 1999, the Partnership sold an
additional  21.5614% of its interest in the ArbyOs restaurant  to
an  unrelated  third party.  The Partnership  received  net  sale
proceeds  of approximately $224,000 which resulted in a net  gain
of approximately $56,000.

        In  September,  1999,  the Partnership  entered  into  an
agreement to sell the Caribou Coffee store to an unrelated  third
party.  On October 26, 1999, the sale closed with the Partnership
receiving net sale proceeds of approximately $1,575,000  for  its
interest  in  the  property, which resulted  in  a  net  gain  of
approximately $323,000.

        During  the  first  nine months of  1999  and  1998,  the
Partnership  distributed $19,895 and $348,252  of  the  net  sale
proceeds  to  the Limited and General Partners as part  of  their
regular  quarterly distributions which represented  a  return  of
capital  of  $0.83  and  $14.47  per  Limited  Partnership  Unit,
respectively.

         After   completion   of  the  acquisition   phase,   the
Partnership's  primary  use  of cash  flow  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 week after the end of each
quarter.    The  Partnership  attempts  to  maintain   a   stable
distribution  rate  from  quarter  to  quarter.   The  redemption
payments  generally are funded with cash that would  normally  be
paid  as  part  of  the  regular quarterly distributions.   As  a
result,  total  distributions  and  distributions  payable   have
fluctuated  from year to year due to cash used to fund redemption
payments.    Effective   January  1,  1999,   the   PartnershipOs
distribution rate was reduced from 7.5% to 7.0%.  Effective April
1,   1999,   the  rate  was  reduced  to  6.5%.   As  a   result,
distributions were higher during 1998 when compared to  the  same
period in 1999.

        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 is not obligated  to
purchase  in  any  year  more than 5%  of  the  number  of  Units
outstanding at the beginning of the 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.

        On October 1, 1999, ten Limited Partners redeemed a total
of  280.37 Partnership Units for $239,479 in accordance with  the
Partnership  Agreement.   The Partnership  acquired  these  Units
using  Net  Cash  Flow from operations.  In  prior  years,  three
Limited Partners redeemed a total of 171.1 Partnership Units  for
$154,021.    The  redemptions  increase  the  remaining   Limited
Partners' ownership interest in the Partnership.

       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.


                   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.CHANGES IN SECURITIES

      None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None

ITEM 5.OTHER INFORMATION

      None.

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

      a. Exhibits -
                           Description

         10.1  Purchase Agreement dated  August  4,
               1999  between  the  Partnership  and   VTA
               Building  Company relating to the property
               at 2719 Zelda Road, Montgomery, Alabama.

         10.2  Co-Tenancy Agreement dated August  6,
               1999  between  the  Partnership  and   VTA
               Building  Company relating to the property
               at 2719 Zelda Road, Montgomery, Alabama.

         10.3  Purchase  Agreement dated  September
               20,  1999  between  the  Partnership,  AEI
               Institutional Net Lease Fund  '93  Limited
               Partnership   and  Boulevard   East,   LLC
               relating  to  the property  at  1531  East
               Boulevard, Charlotte, North Carolina.

         10.4  Purchase  Agreement dated  September
               29,  1999 between the Partnership and  The
               Barrett  Family  Trust  relating  to   the
               property  at  2719 Zelda Road, Montgomery,
               Alabama.

         10.5  Co-Tenancy Agreement  dated  October
               22,  1999 between the Partnership and  The
               Barrett  Family  Trust  relating  to   the
               property  at  2719 Zelda Road, Montgomery,
               Alabama.

          27   Financial Data Schedule  for  period
               ended September 30, 1999.

      b.    Reports filed on Form  8-K  -  None.


                           SIGNATURES

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


Dated:  November 8, 1999      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/  Mark E. Larson
                                       Mark E. Larson
                                       Chief Financial Officer
                                       (Principal Accounting Officer)