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

                            FORM 10-Q

        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended:  March 31, 2011

               Commission File Number:  000-29274

           AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
     (Exact name of registrant 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
                 (Registrant's telephone number)

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

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.               [X] Yes   [ ] No

Indicate  by  check  mark  whether the registrant  has  submitted
electronically  and posted on its corporate  Web  site,  if  any,
every  Interactive Data File required to be submitted and  posted
pursuant  to Rule 405 of Regulation S-T (232.405 of this chapter)
during  the preceding 12 months (or for such shorter period  that
the registrant was required to submit and post such files).
                                                 Yes [ ]   No [ ]

Indicate  by  check  mark  whether  the  registrant  is  a  large
accelerated filer, an accelerated filer, a non-accelerated filer,
or  a  smaller reporting company.  See the definitions of  "large
accelerated  filer," "accelerated filer" and  "smaller  reporting
company" in Rule 12b-2 of the Exchange Act.

  Large accelerated filer [ ]       Accelerated filer [ ]

  Non-accelerated filer [ ]         Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).    [ ] Yes [X] No


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                              INDEX


Part I - Financial Information

 Item 1. Financial Statements (unaudited):

         Balance Sheet as of March 31, 2011 and December 31, 2010

         Statements for the Three Months ended March 31, 2011 and 2010:

           Income

           Cash Flows

           Changes in Partners' Capital

        Notes to Financial Statements

 Item 2. Management's Discussion and Analysis  of  Financial Condition
           and Results of Operations

 Item 3. Quantitative and Qualitative Disclosures About Market Risk

 Item 4. Controls and Procedures

Part II - Other Information

 Item 1. Legal Proceedings

 Item 1A. Risk Factors

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

 Item 3. Defaults Upon Senior Securities

 Item 5. Other Information

 Item 6. Exhibits

         Signatures

<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                          BALANCE SHEET
              MARCH 31, 2011 AND DECEMBER 31, 2010

                             ASSETS

                                                       2011         2010
CURRENT ASSETS:
  Cash                                            $ 1,458,724   $   514,889

INVESTMENTS IN REAL ESTATE:
  Land                                              4,413,700     4,413,700
  Buildings and Equipment                          12,286,382    12,286,382
  Accumulated Depreciation                         (2,079,749)   (1,956,885)
                                                   -----------   -----------
                                                   14,620,333    14,743,197
  Real Estate Held for Sale                           785,099     1,328,815
                                                   -----------   -----------
      Net Investments in Real Estate               15,405,432    16,072,012
                                                   -----------   -----------
          Total Assets                            $16,864,156   $16,586,901
                                                   ===========   ===========

                      LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    23,926   $    24,527
  Distributions Payable                               293,938       294,949
  Unearned Rent                                        62,820        27,010
                                                   -----------   -----------
      Total Current Liabilities                       380,684       346,486
                                                   -----------   -----------
PARTNERS' CAPITAL:
  General Partners                                      5,044         2,613
  Limited Partners, $1,000 per Unit;
   24,000 Units authorized and issued;
   22,674 Units outstanding                        16,478,428    16,237,802
                                                   -----------   -----------
      Total Partners' Capital                      16,483,472    16,240,415
                                                   -----------   -----------
        Total Liabilities and Partners' Capital   $16,864,156   $16,586,901
                                                   ===========   ===========


 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 THREE MONTHS ENDED MARCH 31


                                                       2011         2010

RENTAL INCOME                                     $   326,135   $   296,336

EXPENSES:
  Partnership Administration - Affiliates              56,798        56,694
  Partnership Administration and Property
     Management - Unrelated Parties                    12,274        11,928
  Depreciation                                        122,864       111,434
                                                   -----------   -----------
      Total Expenses                                  191,936       180,056
                                                   -----------   -----------

OPERATING INCOME                                      134,199       116,280

OTHER INCOME:
  Interest Income                                       1,088         2,374
                                                   -----------   -----------

INCOME FROM CONTINUING OPERATIONS                     135,287       118,654

Income from Discontinued Operations                   401,708       117,140
                                                   -----------   -----------
NET INCOME                                        $   536,995   $   235,794
                                                   ===========   ===========
NET INCOME ALLOCATED:
  General Partners                                $     5,370   $     2,500
  Limited Partners                                    531,625       233,294
                                                   -----------   -----------
                                                  $   536,995   $   235,794
                                                   ===========   ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
  Continuing Operations                           $      5.91   $      5.16
  Discontinued Operations                               17.54          5.08
                                                   -----------   -----------
       Total                                      $     23.45   $     10.24
                                                   ===========   ===========
Weighted Average Units Outstanding - Basic and Diluted 22,674        22,779
                                                   ===========   ===========


 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 THREE MONTHS ENDED MARCH 31


                                                       2011          2010

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                      $   536,995   $   235,794

  Adjustments To Reconcile Net Income
  To Net Cash Provided By Operating Activities:
     Depreciation                                     122,864       111,479
     Gain on Sale of Real Estate                     (366,278)      (75,134)
     Decrease in Receivables                                0         9,325
     Decrease in Payable to
        AEI Fund Management, Inc.                        (601)       (7,877)
     Increase in Unearned Rent                         35,810        28,040
                                                   -----------   -----------
       Total Adjustments                             (208,205)       65,833
                                                   -----------   -----------
       Net Cash Provided By
           Operating Activities                       328,790       301,627
                                                   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from Sale of Real Estate                   909,994       648,999
                                                   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Distributions Paid to Partners                     (294,949)     (294,947)
                                                   -----------   -----------

NET INCREASE IN CASH                                  943,835       655,679

CASH, beginning of period                             514,889     1,008,743
                                                   -----------   -----------
CASH, end of period                               $ 1,458,724   $ 1,664,422
                                                   ===========   ===========


 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 THREE MONTHS ENDED MARCH 31


                                                                 Limited
                                                               Partnership
                             General     Limited                  Units
                             Partners    Partners     Total    Outstanding


BALANCE, December 31, 2009  $  1,319   $16,565,712  $16,567,031   22,779.11

  Distributions Declared      (2,950)     (291,998)    (294,948)

  Net Income                   2,500       233,294      235,794
                             --------   -----------  -----------  ----------
BALANCE, March 31, 2010     $    869   $16,507,008  $16,507,877   22,779.11
                             ========   ===========  ===========  ==========


BALANCE, December 31, 2010  $  2,613   $16,237,802  $16,240,415   22,673.61

  Distributions Declared      (2,939)     (290,999)    (293,938)

  Net Income                   5,370       531,625      536,995
                             --------   -----------  -----------  ----------
BALANCE, March 31, 2011     $  5,044   $16,478,428  $16,483,472   22,673.61
                             ========   ===========  ===========  ==========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                         MARCH 31, 2011

(1)  The  condensed  statements included herein have been  prepared
     by  the  registrant, 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  registrant
     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
     registrant's latest annual report on Form 10-K.

(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  called  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  related to discontinued  operations  in  the
     prior year's financial statements have been reclassified  to
     conform  to 2011 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  October  20,  2010,  the  Partnership  purchased  a  39%
     interest in a Scott & White Clinic in College Station, Texas
     for   $1,433,468.   The  Partnership  incurred  $31,422   of
     acquisition  expenses  related to  the  purchase  that  were
     expensed.   The  property  is  leased  to  Scott   &   White
     Healthcare under a Lease Agreement with a remaining  primary
     term  of  9.7 years (as of the date of purchase) and initial
     annual  rent  of  $120,120 for the interest purchased.   The
     remaining  interests in the property were purchased  by  AEI
     Net  Lease  Income & Growth Fund XX Limited Partnership  and
     AEI   Income  &  Growth  Fund  25  LLC,  affiliates  of  the
     Partnership.

(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 -

     During 2010, the Partnership sold 33.6699% of the KinderCare
     daycare  center  in  Ballwin, Missouri,  in  three  separate
     transactions,  to unrelated third parties.  The  Partnership
     received total net sale proceeds of $674,196, which resulted
     in a net gain of $265,907.  The cost and related accumulated
     depreciation   of  the  interests  sold  was  $511,034   and
     $102,745,  respectively.  For the three months  ended  March
     31, 2010, the net gain was $87,118.

     On  March  25,  2011,  the Partnership  sold  its  remaining
     44.5116%  interest  in  the  KinderCare  daycare  center  in
     Ballwin,   Missouri,  in  two  separate   transactions,   to
     unrelated third parties.  The Partnership received total net
     sale  proceeds of $902,133, which resulted in a net gain  of
     $362,374.  The cost and related accumulated depreciation  of
     the  interests sold was $675,587 and $135,828, respectively.
     At  December 31, 2010, the property was classified  as  Real
     Estate Held for Sale with a carrying value of $539,759.

     In  December 2009, the Partnership entered into an agreement
     to  sell the Tumbleweed restaurant in Fort Wayne, Indiana to
     an  unrelated  third  party.  On March 12,  2010,  the  sale
     closed  with the Partnership receiving net sale proceeds  of
     $428,016, which resulted in a net loss of $11,984.   At  the
     time  of sale, the cost and related accumulated depreciation
     was $727,476 and $287,476, respectively.

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

(6)  Discontinued Operations - (Continued)

     On  January  19,  2011, the Partnership sold  its  remaining
     .1534%  interest  in  the  Champps Americana  restaurant  in
     Livonia,   Michigan  to  an  unrelated  third  party.    The
     Partnership  received  net sale proceeds  of  $7,861,  which
     resulted  in  a  net gain of $3,904.  The cost  and  related
     accumulated depreciation of the interest sold was $6,366 and
     $2,409,  respectively.  At December 31, 2010,  the  property
     was  classified as Real Estate Held for Sale with a carrying
     value of $3,957.

     The  Partnership is attempting to sell its 20.4025% interest
     in  the Winn-Dixie store in Panama City, Florida.  At  March
     31,  2011 and December 31, 2010, the property was classified
     as  Real  Estate  Held  for Sale with a  carrying  value  of
     $785,099.

     During  the  first  three months of  2010,  the  Partnership
     distributed net sale proceeds of $22,808 to the Limited  and
     General  Partners as part of their quarterly  distributions,
     which  represented a return of capital of $0.99 per  Limited
     Partnership Unit.  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:


                                                2011          2010

     Rental Income                           $  35,430      $  50,121
     Property Management Expenses                    0         (8,070)
     Depreciation                                    0            (45)
     Gain on Disposal of Real Estate           366,278         75,134
                                              ---------      ---------
     Income from Discontinued Operations     $ 401,708      $ 117,140
                                              =========      =========

(7)  Fair Value Measurements -

     As  of  March  31, 2011, the Partnership had  no  assets  or
     liabilities measured at fair value on a recurring  basis  or
     nonrecurring basis.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS.

        This  section contains "forward-looking statements" 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, the
sufficiency  of  cash  to  meet  operating  expenses,  rates   of
distribution,  and  other  matters.  These,  and  other  forward-
looking  statements,  should 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
    effects 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.

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
investments  in  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 cost  (not  including  acquisition
expenses).    The   Partnership  tests  long-lived   assets   for
recoverability  when events or changes in circumstances  indicate
that  the  carrying value may not be recoverable.  For properties
the  Partnership  will  hold and operate,  management  determines
whether  impairment  has  occurred by  comparing  the  property's
probability-weighted  future  undiscounted  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  net
realizable  value, an impairment loss is recorded to  reduce  the
carrying  value  of  the  property to its net  realizable  value.
Changes  in  these  assumptions or analysis  may  cause  material
changes in the carrying value of the properties.

        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.


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

         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, 2011 and 2010,  the
Partnership  recognized rental income from continuing  operations
of  $326,135 and $296,336, respectively.  In 2011, rental  income
increased  mainly  due  to  additional  rent  received  from  one
property  acquisition in 2010.  Based on the scheduled  rent  for
the  properties  owned  as  of April 30,  2011,  the  Partnership
expects to recognize rental income from continuing operations  of
approximately $1,312,000 in 2011.

        For  the three months ended March 31, 2011 and 2010,  the
Partnership  incurred  Partnership administration  expenses  from
affiliated  parties of $56,798 and $56,694, respectively.   These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and communication with the Limited Partners.  During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $12,274 and $11,928, 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, 2011 and 2010,  the
Partnership  recognized interest income  of  $1,088  and  $2,374,
respectively.   In 2011, interest income decreased primarily  due
to  the  Partnership having less money invested in a money market
account due to a property acquisition in October 2010.

        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  of  the  property  to  discontinued
operations.   For  the  three months ended March  31,  2011,  the
Partnership  recognized  income from discontinued  operations  of
$401,708,  representing rental income of $35,430 and  a  gain  on
disposal of real estate of $366,278.  For the three months  ended
March   31,   2010,  the  Partnership  recognized   income   from
discontinued  operations of $117,140, representing rental  income
less property management expenses and depreciation of $42,006 and
a gain on disposal of real estate of $75,134.

         During  2010,  the  Partnership  sold  33.6699%  of  the
KinderCare daycare center in Ballwin, Missouri, in three separate
transactions,  to  unrelated  third  parties.   The   Partnership
received total net sale proceeds of $674,196, which resulted in a
net   gain   of  $265,907.   The  cost  and  related  accumulated
depreciation  of  the interests sold was $511,034  and  $102,745,
respectively.  For the three months ended March 31, 2010, the net
gain was $87,118.

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

        On  March  25,  2011, the Partnership sold its  remaining
44.5116%  interest in the KinderCare daycare center  in  Ballwin,
Missouri,  in  two  separate  transactions,  to  unrelated  third
parties.   The  Partnership received total net sale  proceeds  of
$902,133, which resulted in a net gain of $362,374.  The cost and
related  accumulated  depreciation  of  the  interests  sold  was
$675,587  and $135,828, respectively.  At December 31, 2010,  the
property  was  classified as Real Estate Held  for  Sale  with  a
carrying value of $539,759.

         In  December  2009,  the  Partnership  entered  into  an
agreement  to  sell  the  Tumbleweed restaurant  in  Fort  Wayne,
Indiana to an unrelated third party.  On March 12, 2010, the sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$428,016, which resulted in a net loss of $11,984.  At  the  time
of  sale,  the  cost  and  related accumulated  depreciation  was
$727,476 and $287,476, respectively.

        On  January 19, 2011, the Partnership sold its  remaining
..1534%  interest in the Champps Americana restaurant in  Livonia,
Michigan  to an unrelated third party.  The Partnership  received
net  sale  proceeds of $7,861, which resulted in a  net  gain  of
$3,904.   The  cost and related accumulated depreciation  of  the
interest  sold was $6,366 and $2,409, respectively.  At  December
31,  2010,  the property was classified as Real Estate  Held  for
Sale with a carrying value of $3,957.

        The  Partnership  is  attempting  to  sell  its  20.4025%
interest  in  the Winn-Dixie store in Panama City,  Florida.   At
March 31, 2011 and December 31, 2010, the property was classified
as Real Estate Held for Sale with a carrying value of $785,099.

         Management  believes  inflation  has  not  significantly
affected  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.  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,  2011,  the
Partnership's  cash balances increased $943,835 as  a  result  of
cash  generated from the sale of property and cash generated from
operating  activities  in  excess of distributions  paid  to  the
Partners.   During  the three months ended March  31,  2010,  the
Partnership's  cash balances increased $655,679 as  a  result  of
cash  generated from the sale of property and cash generated from
operating  activities  in  excess of distributions  paid  to  the
Partners.

        Net  cash provided by operating activities increased from
$301,627  in 2010 to $328,790 in 2011 as a result of an  increase
in  total  rental  and  interest income in 2011,  a  decrease  in
Partnership  administration and property management  expenses  in
2011  and  net timing differences in the collection  of  payments
from the tenants and the payment of expenses.

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

        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, 2011 and 2010, the Partnership generated cash flow from
the sale of real estate of $909,994 and $648,999, respectively.

        On  October  20,  2010, the Partnership purchased  a  39%
interest in a Scott & White Clinic in College Station, Texas  for
$1,433,468.   The property is leased to Scott & White  Healthcare
under  a  Lease Agreement with a remaining primary  term  of  9.7
years  (as  of the date of purchase) and initial annual  rent  of
$120,120 for the interest purchased.  The remaining interests  in
the property were purchased by AEI Net Lease Income & Growth Fund
XX  Limited  Partnership and AEI Income &  Growth  Fund  25  LLC,
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 week 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, 2011 and 2010,  the
Partnership  declared  distributions of  $293,938  and  $294,948,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of $290,999 and $291,998 and the General  Partners
received  distributions  of $2,939 and $2,950  for  the  periods,
respectively.

        During  the  first three months of 2010, the  Partnership
distributed  net  sale proceeds of $22,808  to  the  Limited  and
General Partners as part of their quarterly distributions,  which
represented  a return of capital of $0.99 per Limited Partnership
Unit.   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.

       During the first three months of 2011, the Partnership did
not  redeem  any Units from the Limited Partners.  On October  1,
2010,  six Limited Partners redeemed a total of 105.5 Partnership
Units  for  $34,800 in accordance with the Partnership Agreement.
The  Partnership acquired these Units using Net  Cash  Flow  from
operations.   In  prior  years, a total of  60  Limited  Partners
redeemed   1,220.89   Partnership  Units   for   $958,469.    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 $351 in 2010.


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

       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.

The Economy and Market Conditions

       The impact of conditions in the current economy, including
the  turmoil  in the credit markets, has adversely affected  many
real  estate investment funds.  However, the absence of  mortgage
financing on the Partnership's properties eliminates the risks of
foreclosure and debt-refinancing that can negatively  impact  the
value  and  distributions  of leveraged  real  estate  investment
funds.  Nevertheless, a prolonged economic downturn may adversely
affect the operations of the Partnership's tenants and their cash
flows.  If a tenant were to default on its lease obligations, the
Partnership's  income  would decrease,  its  distributions  would
likely be reduced and the value of its properties might decline.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

       Not required for a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES.

       (a)  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  our  disclosure
controls  and procedures (as defined in Rule 13a-15(e) under  the
Securities  Exchange  Act of 1934 (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, our disclosure controls  and
procedures  were effective in ensuring that information  required
to be disclosed by us in the reports that we file or submit under
the  Exchange Act is recorded, processed, summarized and reported
within  the time periods specified in applicable rules and  forms
and  that  such  information is accumulated and  communicated  to
management,  including the President and Chief Financial  Officer
of  the  Managing General Partner, in a manner that allows timely
decisions regarding required disclosure.

       (b)  Changes in Internal Control Over Financial Reporting.

        During  the  most recent period covered by  this  report,
there  has  been no change in our internal control over financial
reporting  (as defined in Rule 13a-15(f) under the Exchange  Act)
that  has  materially  affected,  or  is  reasonably  likely   to
materially affect, our 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 1A.  RISK FACTORS.

       Not required for a smaller reporting company.

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

       (a) None.

       (b) Not applicable.

        (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 5.   OTHER INFORMATION.

       None.

ITEM 6.   EXHIBITS.

    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

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


Dated:  May 12, 2011          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)