**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION **

**WASHINGTON,      D.C. 20549 **

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**FORM      10-Q**

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**(Mark      One) **

| **x** | **QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE                ACT OF 1934** |
|-------|------------------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended September 30, 2008 **

| ** ̈** | **TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE                ACT OF 1934** |
|------------|-------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from **
**            **
**      to **
**            **

**Commission      file number:**
**333-141521**

**City      Language Exchange Incorporated**

| **Delaware**                                        | **20-5433090**           |
|-----------------------------------------------------|--------------------------|
| (State or Other Jurisdiction of | (I.R.S. Employer    |
| Incorporation or Organization)            | Identification No.) |

**6021      Roxton Road, Halifax, Nova Scotia, Canada B3H 1H4**

**                                               **

**902)      478-5065                                               **

**                                                                                                                                          **

|   | Large accelerated filer |  ̈ | Accelerated filer              |  ̈ |
|--------|-----------------------------------|--------|-------------------------------------|--------|
|   | Non-accelerated filer        |  ̈ | Smaller reporting company | x      |

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**TABLE      OF CONTENTS**

| **PART I - FINANCIAL INFORMATION**                                                                                                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Item 1.  Financial Statements                                                                                                     | 3      |
| Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of |   |
| Operations                                                                                                                                            | 8      |
| Item 3.  Quantitative and Qualitative Analysis About Market Risk                                         | 10     |
| Item 4T.  Controls and Procedures                                                                                            | 11     |
| **PART II - OTHER INFORMATION**                                                                                                   |   |
| Item 1.  Legal Proceedings                                                                                                        | 12     |
| Item 1A.  Risk Factors                                                                                                            | 12     |
| Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                           | 12     |
| Item 3.  Defaults Upon Senior Securities.                                                                               | 12     |
| Item 4.  Submission of Matters to a Vote of Security Holders.                                  | 12     |
| Item 5.  Other Information.                                                                                                       | 12     |
| Item 6.  Exhibits                                                                                                                      | 12     |
| SIGNATURES                                                                                                                                            | 14     |

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**PART      I - FINANCIAL INFORMATION**

**CITY      LANGUAGE EXCHANGE INCORPORATED**

|                                                                                                                                                                                                               |   | September30, 2008 |    | December 31,2007 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|-----------------------|--------|
|                                                                                                                                                                                                               |   |                   |    |                  |   |
| ASSETS                                                                                                                                                                                                             |   |                   |    |                  |   |   |   |
| Current                Assets                                                                                                                                                                                      |   |                   |    |                  |   |   |   |
| Cash                                                                                                                                                                                                               |   | $                      | 7       |                  | $      | 1,254 |   |
| Due                from related party                                                                                                                                                                              |   |                   | 165     |                  |   | - |   |
| Total                Current Assets                                                                                                                                                                                |   |                   | 172     |                  |   | 1,254 |   |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| Equipment,                net of accumulated depreciation of $885 and $633                                                                                                                                         |   |                   | 586     |                  |   | 837 |   |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| Total                Assets                                                                                                                                                                                        |   | $                      | 758     |                  | $      | 2,091 |   |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ DEFICIT                                                                                                                                                         |   |                   |    |                  |   |   |   |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| Current                Liabilities                                                                                                                                                                                 |   |                   |    |                  |   |   |   |
| Accrued                expenses                                                                                                                                                                                    |   | $                      | 955     |                  | $      | 5,700 |   |
| Total                Current Liabilities                                                                                                                                                                           |   |                   | 955     |                  |   | 5,700 |   |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| Commitments                and contingencies                                                                                                                                                                       |   |                   | -       |                  |   |   |   |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| Stockholders’                Equity (Deficit)                                                                                                                                                                |   |                   |    |                  |   |   |   |
| Preferred                stock, $.0001, 20,000,000 shares                                                                                                                                                          |   |                   |    |                  |   |   |   |
| authorized,                none issued and outstanding                                                                                                                                                             |   |                   | -       |                  |   |   |   |
| Common                stock, $.0001 par value, 100,000,000 shares authorized, 35,945,000                shares                issued and outstanding as of September 30, 2008 and December 31,                2007 |   |                   | 3,595   |                  |   | 3,595 |   |
| Additional                paid-in capital                                                                                                                                                                          |   |                   | 62,931  |                  |   | 53,931 |   |
| Deficit                accumulated during development stage                                                                                                                                                        |   |                   | (66,723 | )                     |   | (61,135 | ) |
| Total                Stockholders’ Equity (Deficit)                                                                                                                                                          |   |                   | (197    | )                     |   | (3,609 | ) |
|                                                                                                                                                                                                               |   |                   |    |                  |   |   |   |
| Total                Liabilities and Stockholders’ Equity (Deficit)                                                                                                                                          |   | $                      | 758     |                  | $      | 2,091 |   |

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|                                            |   | Three Months Ended |       | Nine Months Ended |   |
|-------------------------------------------------|--------|------------------------------|------------|-----------------------------|--------|
|                                            |   | September 30,           |       | September 30,          |   |
|                                            |   | 2008                         |       | 2007                        |   | 2008 |   | 2007 |   |
|                                            |   |                         |       |                        |   |   |   |   |   |
| REVENUE                                         |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| Translation                service income       |   | $                            | -          |                        | $      | 30 |   | $ | 156 |   | $ | 2,530 |   |
| Total                revenue                    |   |                         | -          |                        |   | 30 |   |   | 156 |   |   | 2,530 |   |
|                                            |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| EXPENSES                                        |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| General                & administrative     |   |                         | 955        |                        |   | 4,958 |   |   | 5,493 |   |   | 41,846 |   |
| Depreciation                expense             |   |                         | 84         |                        |   | 140 |   |   | 252 |   |   | 420 |   |
| Total                expenses                   |   |                         | 1,039      |                        |   | 5,098 |   |   | 5,745 |   |   | 42,266 |   |
|                                            |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| Net                loss                         |   | $                            | (1,039     | )                           | $      | (5,068 | ) | $ | (5,589 | ) | $ | (39,736 | ) |
|                                            |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| Net                loss per share – basic |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| and                diluted                      |   | $                            | 0.00       |                        | $      | 0.00 |   | $ | (0.00 | ) | $ | (0.01 | ) |
|                                            |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| Weighted                average share           |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| outstanding                – basic and    |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| diluted                                         |   |                         | 35,945,000 |                        |   | 35,945,000 |   |   | 35,945,000 |   |   | 35,526,155 |   |

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|                                                         |   | September 30,2008 |    | September 30,2007 |   |
|--------------------------------------------------------------|--------|------------------------|---------|------------------------|--------|
| Cash                Flows From Operating Activities:         |   |                   |    |                   |   |   |   |
| Net                loss                                 |   | $                      | (5,589  | )                      | $      | (39,736 | ) |
|                                                         |   |                   |    |                   |   |   |   |
| Adjustments                to reconcile net loss             |   |                   |    |                   |   |   |   |
| to                net cash provided by operating activities: |   |                   |    |                   |   |   |   |
| Depreciation                                                 |   |                   | 252     |                   |   | 420 |   |
| Changes                in:                                   |   |                   |    |                   |   |   |   |
| Accrued                Expenses                              |   |                   | (4,745  | )                      |   | (1,746 | ) |
| Net                Cash Used In Operating                    |   |                   |    |                   |   |   |   |
| Activities                                                   |   |                   | (10,082 | )                      |   | (41,062 | ) |
|                                                         |   |                   |    |                   |   |   |   |
| Cash                Flows From Investing Activities:         |   |                   |    |                   |   |   |   |
| Advance                to officer                            |   |                   | (165    | )                      |   | - |   |
| Net                Cash Used in Investing Activities         |   |                   | (165    | )                      |   | - |   |
|                                                         |   |                   |    |                   |   |   |   |
| Cash                Flows From Financing Activities:         |   |                   |    |                   |   |   |   |
| Proceeds                from sale of common stock            |   |                   | -       |                   |   | 18,900 |   |
| Contributed                capital by owner                  |   |                   | 9,000   |                   |   | 22,280 |   |
| Net                Cash Provided By Financing                |   |                   |    |                   |   |   |   |
| Activities                                                   |   |                   | 9,000   |                   |   | 41,180 |   |
|                                                         |   |                   |    |                   |   |   |   |
| Net                increase (decrease) in cash               |   |                   | (1,247  | )                      |   | 118 |   |
| Cash                at beginning of period                   |   |                   | 1,254   |                   |   | 5,081 |   |
| Cash                at end of period                         |   | $                      | 7       |                   | $      | 5,199 |   |
|                                                         |   |                   |    |                   |   |   |   |
| Supplemental                Information:                     |   |                   |    |                   |   |   |   |
| Interest                paid                                 |   | $                      | -       |                   | $      | - |   |
| Income                taxes paid                        |   | $                      | -       |                   | $      | - |   |

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**FORWARD      LOOKING STATEMENTS **

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

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**Results      of Operations – Nine Months ended September 30, 2008 and September 30,      2007**

|                                      |   | September 30, 2008 |   | September 30, 2007 |   |
|-------------------------------------------|--------|------------------------------|--------|------------------------------|--------|
|                                      |   |                         |   |                         |   |
| Revenues:                                 |   |                         |   |                         |   |   |   |
|                                      |   |                         |   |                         |   |   |   |
| Translation                service income |   | $                            | 156    |                         | $      | 2,530 |   |
|                                      |   |                         |   |                         |   |   |   |
| Total                Revenue              |   | $                            | 156    |                         | $      | 2,530 |   |

| General                and administrative expenses |   | $ | 5,493 |   | $ | 41,846 |   |
|----------------------------------------------------|--------|---|-------|--------|---|--------|--------|

| Depreciation                expense |   | $ | 252 |   | $ | 420 |   |
|-------------------------------------|--------|---|-----|--------|---|-----|--------|

| Total                  expenses |   | $      | 5,745  |   | $      | 42,266  |   |
|---------------------------------|--------|--------|--------|--------|--------|---------|--------|
|                            |   |   |   |   |   |    |   |
| Net                  loss       |   | $      | (5,589 | )      | $      | (39,736 | )      |

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**Liquidity      and Capital Resources**

**Impact      of Inflation**

**Seasonality**

**Off-Balance      Sheet Arrangements**

**Item      3.**
**      Quantitative and Qualitative Analysis About Market Risk**

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**Item      4T. Controls and Procedures**

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

**Item      5. Other Information.**

**Item      6. Exhibits**

|   | Exhibit                3.1  | Certificate                of Incorporation (1).                                                                                                                                                                                           |
|--------|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                        |                                                                                                                                                                                                                                       |
|   | Exhibit                3.2  | Bylaws                (1).                                                                                                                                                                                                                 |
|   |                        |                                                                                                                                                                                                                                       |
|   | Exhibit                3.3  | Certificate                of Amendment of the Certificate of Incorporation (2).                                                                                                                                                           |
|   |                        |                                                                                                                                                                                                                                       |
|   | Exhibit                4.1  | Form                of Common Stock Certificate of City Language Exchange Incorporated                (1).                                                                                                                                 |
|   |                        |                                                                                                                                                                                                                                       |
|   | Exhibit                11.1 | Statement                re computation of per share earnings (see Note 1 to Financial Statements                on page 5).                                                                                                               |
|   |                        |                                                                                                                                                                                                                                       |
|   | Exhibit                31.1 | Certification                as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of                2002 by                Chief Executive Officer and Chief Financial Officer.                                                 |
|   |                        |                                                                                                                                                                                                                                       |
|   | Exhibit                32.1 | Certification                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002 by Chief Executive Officer and Chief                Financial Officer. |

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|   | (1) | Incorporated              by reference to the exhibits included with our Registration Statement              on              Form SB-2, File No. 333-141521, filed with the U.S. Securities and              Exchange Commission on March 22, 2007.  |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|
|   | (2) | Incorporated                by reference to the exhibits included with our Current Report on                Form 8-K,                dated June 23, 2008, and filed with the U.S. Securities and Exchange                Commission on June 27, 2008. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

|                                        | **CITY LANGUAGE EXCHANGE INCORPORATED** |
|---------------------------------------------|--------------------------------------------------------|
|                                        |                                                   |
| Date:  November 7, 2008 | By:                                               | /s/  Jonny White |   |
|                                        |                                                   | Jonny White |
|                                        |                                                   | President, Chief |
|                                        |                                                   | Executive Officer and Chief Financial Officer |
|                                        |                                                   | (principal executive officer, and |
|                                        |                                                   | principal financial and accounting officer) |

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