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, 1998
                                
                Commission file number:  0-18289
                                
                                
            AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)


      State of Minnesota                   41-1622463
(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 REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                                
                              INDEX
                                
                                
                                                     

PART I. Financial Information

 Item 1. Balance Sheet as of September 30, 1998 and  December 31, 1997 

          Statements for the Periods ended September 30, 1998  and 1997:

            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 REAL ESTATE FUND XVIII LIMITED PARTNERSHIP

                          BALANCE SHEET
                                
            SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
                                
                           (Unaudited)
                                
                             ASSETS
                                
                                                     1998          1997

CURRENT ASSETS:
  Cash and Cash Equivalents                      $   736,720    $ 4,213,283
  Receivables                                         49,582         20,547
                                                  -----------    -----------
      Total Current Assets                           786,302      4,233,830
                                                  -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                             5,742,748      3,970,611
  Buildings and Equipment                          8,956,631      8,160,729
  Construction in Progress                         1,407,424         43,208
  Property Acquisition Costs                          89,853         97,181
  Accumulated Depreciation                        (2,075,615)    (1,853,954)
                                                  -----------    -----------
                                                  14,121,041     10,417,775
  Real Estate Held for Sale                                0        372,980
                                                  -----------    -----------
     Net Investments in Real Estate               14,121,041     10,790,755
                                                  -----------    -----------
        Total Assets                             $14,907,343    $15,024,585
                                                  ===========    ===========


                      LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.           $    33,254    $    23,780
  Distributions Payable                              195,346        131,154
  Unearned Rent                                       68,100          5,000
                                                  -----------    -----------
      Total Current Liabilities                      296,700        159,934
                                                  -----------    -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                   (49,358)       (46,818)
  Limited Partners, $1,000 Unit Value;
   30,000 Units authorized; 22,783 Issued;
   21,127 and 21,487 Units outstanding in
   1998 and 1997, respectively                    14,660,001     14,911,469
                                                  -----------    -----------
      Total Partners' Capital                     14,610,643     14,864,651
                                                  -----------    -----------
        Total Liabilities and Partners' Capital  $14,907,343    $15,024,585
                                                  ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>                                
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                       STATEMENT OF INCOME
                                
               FOR THE PERIODS ENDED SEPTEMBER 30
                                
                           (Unaudited)
                                

                               Three Months Ended          Nine Months Ended
                              9/30/98      9/30/97       9/30/98       9/30/97

INCOME:
   Rent                     $  379,694   $  354,720    $1,083,020   $1,058,808
   Investment Income            56,680       42,784       174,133      129,390
                             ---------    ---------     ----------   ----------
        Total Income           436,374      397,504     1,257,153    1,188,198
                             ---------    ---------     ----------   ----------

EXPENSES:
   Partnership Administration - 
    Affiliates                  57,764       61,897       188,901      195,928
   Partnership Administration 
    and Property Management - 
    Unrelated Parties           16,588       46,728        51,017       96,475
   Depreciation                 75,423       83,649       221,661      244,188
                             ---------    ---------     ----------   ----------
        Total Expenses         149,775      192,274       461,579      536,591
                             ---------    ---------     ----------   ----------

OPERATING INCOME               286,599      205,230       795,574      651,607

GAIN (LOSS) ON SALE
  OF REAL ESTATE               (22,345)     468,544       (22,345)     845,006
                             ---------    ---------     ----------   ----------
NET INCOME                  $  264,254   $  673,774    $  773,229   $1,496,613
                             =========    =========     ==========   ==========

NET INCOME ALLOCATED:
   General Partners         $    2,642   $    6,738    $    7,732   $   14,966
   Limited Partners            261,612      667,036       765,497    1,481,647
                             ---------    ---------     ----------   ----------
                            $  264,254   $  673,774    $  773,229   $1,496,613
                             =========    =========     ==========   ==========

NET INCOME PER
 LIMITED PARTNERSHIP UNIT
 (21,127, 21,764, 21,314 and 
 21,764 weighted average Units 
 outstanding for the periods, 
 respectively)              $    12.38   $    30.65    $    35.92   $    68.08
                             =========    =========     ==========   ==========



 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                     STATEMENT OF CASH FLOWS
                                
               FOR THE PERIODS ENDED SEPTEMBER 30
                                
                           (Unaudited)
                                
                                                         1998           1997
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                       $   773,229    $ 1,496,613

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                       221,661        244,188
     (Gain) Loss on Sale of Real Estate                  22,345       (845,006)
     (Increase) Decrease in Receivables                 (29,035)        10,522
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                         9,474        (66,681)
     Decrease in Security Deposit                             0           (665)
     Increase in Unearned Rent                           63,100         47,266
                                                     -----------    -----------
        Total Adjustments                               287,545       (610,376)
                                                     -----------    -----------
        Net Cash Provided By
        Operating Activities                          1,060,774        886,237
                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                        (3,924,927)    (1,445,445)
   Proceeds from Sale of Real Estate                    350,635      3,196,982
                                                     -----------    -----------
        Net Cash Provided By (Used For)
        Investing Activities                         (3,574,292)     1,751,537
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase (Decrease) in Distributions Payable          64,192           (395)
   Distributions to Partners                           (735,965)    (1,000,615)
   Redemption Payments                                 (291,272)             0
                                                     -----------    -----------
        Net Cash Used For
        Financing Activities                           (963,045)    (1,001,010)
                                                     -----------    -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                 (3,476,563)     1,636,764

CASH AND CASH EQUIVALENTS, beginning of period        4,213,283      2,359,926
                                                     -----------    -----------
CASH AND CASH EQUIVALENTS, end of period            $   736,720    $ 3,996,690
                                                     ===========    ===========
                                
                                
                                
                                
 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>                                
         AEI REAL ESTATE FUND XVIII 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, 1996  $ (49,658)   $14,630,232   $14,580,574    21,764.38

  Distributions               (10,006)      (990,609)   (1,000,615)

  Net Income                   14,966      1,481,647     1,496,613
                             ---------    -----------   -----------  ----------
BALANCE, September 30, 1997 $ (44,698)   $15,121,270   $15,076,572    21,764.38
                             =========    ===========   ===========  ==========


BALANCE, December 31, 1997  $ (46,818)   $14,911,469   $14,864,651    21,487.28

  Distributions                (7,360)      (728,605)     (735,965)

  Redemption Payments          (2,912)      (288,360)     (291,272)     (360.00)

  Net Income                    7,732        765,497       773,229
                             ---------    -----------   -----------  ----------
BALANCE, September 30, 1998 $ (49,358)   $14,660,001   $14,610,643    21,127.28
                             =========    ===========   ===========  ==========



 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                                
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                       SEPTEMBER 30, 1998
                                
                           (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 Real Estate Fund XVIII Limited Partnership (Partnership)
     was  formed  to  acquire and lease commercial properties  to
     operating tenants.  The Partnership's operations are managed
     by  AEI  Fund  Management XVIII, 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.,   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 February  15,  1989  when  minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)  were  accepted.   The  Partnership's  offering
     terminated  December  4,  1990 when  the  extended  offering
     period expired.  The Partnership received subscriptions  for
     22,783.05 Limited Partnership Units ($22,783,050).
     
     Under  the  terms of the Limited Partnership Agreement,  the
     Limited  Partners and General Partners contributed funds  of
     $22,783,050, 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 REAL ESTATE FUND XVIII 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 6% of their Adjusted Capital  Contribution
     per  annum, cumulative but not compounded, to the extent not
     previously distributed from Net Cash Flow; (ii) next, 99% to
     the  Limited  Partners and 1% to the General Partners  until
     the Limited Partners receive an amount equal to 14% of their
     Adjusted Capital Contribution per annum, cumulative but  not
     compounded, to the extent not previously distributed;  (iii)
     next, to the General Partners until cumulative distributions
     to the General Partners under Items (ii) and (iii) equal 15%
     of cumulative distributions to all Partners under Items (ii)
     and (iii).  Any remaining balance will be distributed 85% to
     the  Limited  Partners  and  15% 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 90% to the Limited Partners and 10% to the General
     Partners.   In the event no Net Cash Flow is distributed  to
     the  Limited  Partners,  90% of  each  item  of  Partnership
     income,  gain  or credit for each respective year  shall  be
     allocated to the Limited Partners, and 10% of each such item
     shall be allocated to the General Partners.  Net losses from
     operations will be allocated 98% to the Limited Partners and
     2% 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 14% of  their  Adjusted  Capital
     Contributions  per annum, cumulative but not compounded,  to
     the  extent  not previously allocated; (iii) third,  to  the
     General Partners until cumulative allocations to the General
     Partners equal 15% of cumulative allocations.  Any remaining
     balance  will  be allocated 85% to the Limited Partners  and
     15%  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 REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate -

     The  Partnership  owned  a 4.1022%  interest  in  a  Sizzler
     restaurant  in  Cincinnati, Ohio, a 93.2478% interest  in  a
     Sizzler  restaurant in Springboro, Ohio, and a 100% interest
     in  a  Sizzler restaurant in Fairfield, Ohio.  In  November,
     1993,  after  reviewing the lessee's operating results,  the
     Partnership  determined that the lessee would be  unable  to
     operate  the  restaurants in a manner capable of  maximizing
     the  restaurants' sales.  Consequently, at the direction  of
     the  Partnership,  a multi-unit restaurant operator  assumed
     operation of the restaurants while the Partnership  reviewed
     the available options.  In January, 1994 and June, 1994, the
     Partnership   closed  the  restaurants  in  Cincinnati   and
     Springboro, respectively, and listed them for sale or lease.
     While  the  properties  were  vacant,  the  Partnership  was
     responsible  for  the  real estate  taxes  and  other  costs
     required to maintain the properties.
     
     No  rents were collected from the Sizzler restaurants in the
     first  nine  months of 1998 and 1997.  The total  amount  of
     rent  not  collected  in  1998 and  1997  was  $101,715  and
     $293,173,  respectively,  for the three  properties.   These
     amounts were not accrued for financial reporting purposes.
     
     On  January  23, 1997, the Partnership sold its interest  in
     the  Cincinnati restaurant to an unrelated third party.  The
     Partnership  received net sales proceeds of  $19,867,  which
     resulted in a net loss of $31,700, which was recognized as a
     real estate impairment in 1996.
     
     In  December,  1996,  the Partnership,  in  order  to  avoid
     additional property management expenses, decided to sell the
     Sizzler  properties in Springboro and Fairfield rather  than
     to  continue  to attempt to re-lease the properties.   As  a
     result,  the  properties were reclassified  on  the  balance
     sheet  to Real Estate Held for Sale.  In addition, based  on
     an  analysis  of  market conditions  in  the  area,  it  was
     determined that a sale of the properties would result in net
     proceeds of approximately $800,000.  The Partnership's share
     of  the  proceeds would be approximately $773,000.  A charge
     to  operations  for  real  estate impairment  of  $1,654,600
     ($693,500 for the Springboro Sizzler, and $961,100  for  the
     Fairfield  Sizzler) was recognized in the fourth quarter  of
     1996, which is the difference between book value at December
     31,  1996  of  $2,427,600  ($1,066,500  for  the  Springboro
     Sizzler  and $1,361,100 for the Fairfield Sizzler)  and  the
     estimated  market  value  of  $773,000  ($373,000  for   the
     Springboro Sizzler and $400,000 for the Fairfield  Sizzler).
     The  charge  was  recorded against the  cost  of  the  land,
     building and equipment.
     
     On  September  22,  1997, the Partnership sold  the  Sizzler
     restaurant  in Fairfield, Ohio to an unrelated third  party.
     The  Partnership  received net sale  proceeds  of  $528,476,
     which  is in excess of the book value of the property  after
     the recognition of the real estate impairment.  As a result,
     the Partnership recognized a net gain of $128,498.
     
     On  July 21, 1998, the Partnership sold its interest in  the
     Sizzler restaurant in Springboro, Ohio to an unrelated third
     party.   The  Partnership  received  net  sale  proceeds  of
     $350,635,  which  resulted in a net  loss  on  the  sale  of
     $22,345.
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     In  August,  1995, the lessee of the two Rally's  properties
     filed  for  reorganization.  After reviewing  the  operating
     results  of the lessee, the Partnership agreed to amend  the
     Leases  of the two properties.  Effective December 1,  1995,
     the Partnership amended the Leases to reduce the annual base
     rent  from $47,498 and $48,392 to $15,000 for each property.
     The  Partnership could receive additional rent in the future
     equal  to 6.75% of the amount by which gross receipts exceed
     $275,000.   In 1997, the Leases, as amended, were  confirmed
     as  part of the reorganization plan.  The lessee has  agreed
     to  pay  all  pre-petition and post-petition  rents  due  of
     $75,775  and  the  Partnership's related administrative  and
     legal  expenses.  However, the Partnership has not collected
     any  of  these  amounts  and,  due  to  the  uncertainty  of
     collection,  has  not  accrued them for financial  reporting
     purposes.
     
     As  of  December  31, 1997, based on an analysis  of  market
     conditions in the area, it was determined the fair value  of
     the  Rally's properties was approximately $270,000.  In  the
     fourth  quarter  of  1997, a charge to operations  for  real
     estate  impairment of $220,500 was recognized, which is  the
     difference  between the book value at December 31,  1997  of
     $490,500  and  the  estimated fair value of  $270,000.   The
     charge  was  recorded against the cost of the  building  and
     equipment.
     
     In February, 1996, the Partnership called a letter of credit
     for  $109,393  related  to  the Taco  Cabana  restaurant  in
     Brownsville,  Texas.  The Partnership applied the  funds  to
     satisfy  1996 rent income and real estate taxes  due  and  a
     portion of the real estate taxes due in 1997.  In 1997,  the
     Partnership  took possession of the property and  listed  it
     for  sale  or  lease.   The  Partnership  was  scheduled  to
     receive, but did not collect, $89,134 and $85,706 in rent in
     the first nine months of 1998 and 1997, respectively.  These
     amounts  were not accrued for financial reporting  purposes.
     While the property is vacant, the Partnership is responsible
     for  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 Brownsville property was approximately $466,600.  In the
     fourth  quarter  of  1997, a charge to operations  for  real
     estate  impairment of $239,600 was recognized, which is  the
     difference  between the book value at December 31,  1997  of
     $706,200  and  the  estimated fair value of  $466,600.   The
     charge  was  recorded  against the  cost  of  the  land  and
     building.
     
     Through December 31, 1997, the Partnership sold 94.1709%  of
     the  Applebee's  restaurant  in  Destin,  Florida  in  seven
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received total net sale proceeds of  $1,413,627
     which  resulted in a total net gain of $481,379.  The  total
     cost  and  related accumulated depreciation of the interests
     sold  was  $1,053,565 and $121,317, respectively.   For  the
     nine  months  ended September 30, 1997,  the  net  gain  was
     $320,171.
     
     Through December 31, 1997, the Partnership sold 90.6301%  of
     a  Taco  Cabana  restaurant in San Antonio, Texas  in  seven
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received total net sale proceeds of  $1,520,182
     which  resulted in a total net gain of $562,654.  The  total
     cost  and  related accumulated depreciation of the interests
     sold was $1,043,983 and $86,455, respectively.  For the nine
     months ended September 30, 1997, the net gain was $172,591.
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     Through December 31, 1997, the Partnership sold 77.4842%  of
     its  interest  in  the  Tractor Supply Company  in  Bristol,
     Virginia  in seven separate transactions to unrelated  third
     parties.   The Partnership received total net sale  proceeds
     of  $1,189,572  which  resulted  in  a  total  net  gain  of
     $217,301.    The   total   cost  and   related   accumulated
     depreciation of the interests sold was $997,602 and $25,331,
     respectively.  For the nine months ended September 30, 1997,
     the net gain was $72,607.
     
     Through December 31, 1997, the Partnership sold 26.0312%  of
     its   interest  in  the  Champps  Americana  restaurant   in
     Columbus,  Ohio in three separate transactions to  unrelated
     third  parties.   The Partnership received  total  net  sale
     proceeds of $807,777 which resulted in a total net  gain  of
     $151,139.    The   total   cost  and   related   accumulated
     depreciation of the interests sold was $667,813 and $11,175,
     respectively.  For the nine months ended September 30, 1997,
     the net gain was $151,139.
     
     During  the  first  nine  months of  1997,  the  Partnership
     distributed $104,820 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
     $4.77 per Limited Partnership Unit.
     
     On  July  30, 1997, the Partnership purchased a Fuddrucker's
     restaurant  in  Thornton,  Colorado  for  $1,405,771.    The
     property  is  leased  to Fuddrucker's, Inc.  under  a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments of $148,387.
     
     On  December  23, 1997, the Partnership purchased  a  23.95%
     interest in a parcel of land in Troy, Michigan for $361,889.
     The  land is leased to Champps Entertainment, Inc. (Champps)
     under a Lease Agreement with a primary term of 20 years  and
     annual rental payments of $25,332.  Effective June 20, 1998,
     the  annual  rent was increased to $37,998.   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 June 20, 1998, the interest  rate  was
     increased  to  10.50%.   On September  3,  1998,  after  the
     development  was completed, the Lease Agreement was  amended
     to   require  annual  rental  payments  of  $122,605.    The
     Partnership's   share  of  the  total   acquisition   costs,
     including  the  cost  of  the  land,  was  $1,175,806.   The
     remaining  interests in the property are owned by  AEI  Real
     Estate  Fund  XV Limited Partnership, AEI Real  Estate  Fund
     XVII  Limited Partnership and AEI Net Lease Income &  Growth
     Fund XIX Limited Partnership, affiliates of the Partnership.
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     In  January, 1998, the Partnership entered into an agreement
     to  purchase  a  45% interest in a Tumbleweed restaurant  in
     Chillicothe,  Ohio.   On  April 13,  1998,  the  Partnership
     purchased its share of the land for $216,915.  The  land  is
     leased  to  Tumbleweed, LLC (TLLC) under a  Lease  Agreement
     with  a  primary term of 15 years and annual rental payments
     of  $18,438.  Effective August 10, 1998, the annual rent was
     increased  to $22,234.  Simultaneously with the purchase  of
     the   land,  the  Partnership  entered  into  a  Development
     Financing Agreement under which the Partnership will advance
     funds   to   TLLC  for  the  construction  of  a  Tumbleweed
     restaurant  on  the site.  Through September 30,  1998,  the
     Partnership  had  advanced $300,558 for the construction  of
     the property and was charging interest on the advances at  a
     rate  of 8.5%.  Effective August 10, 1998, the interest rate
     was  increased to 10.25%.  The Partnership's  share  of  the
     total  purchase price, including the cost of the land,  will
     be   approximately  $610,650.   After  the  construction  is
     complete,  the  Lease Agreement will be amended  to  require
     annual  rental  payments  of  approximately  $62,600.    The
     remaining  interests  in  the  property  are  owned  by  the
     Individual General Partner and AEI Net Lease Income & Growth
     Fund XIX Limited Partnership, affiliates of the Partnership.
     
     In April, 1998, the Partnership entered into an agreement to
     purchase a Tumbleweed restaurant in Columbus, Ohio.  On  May
     1,  1998,  the Partnership purchased the land for  $503,832.
     The  land is leased to TLLC under a Lease Agreement  with  a
     primary  term  of  15  years and annual rental  payments  of
     $42,826.   Effective August 28, 1998, the  annual  rent  was
     increased  to $51,643.  Simultaneously with the purchase  of
     the   land,  the  Partnership  entered  into  a  Development
     Financing Agreement under which the Partnership will advance
     funds   to   TLLC  for  the  construction  of  a  Tumbleweed
     restaurant  on  the site.  Through September 30,  1998,  the
     Partnership  had  advanced $595,824 for the construction  of
     the property and was charging interest on the advances at  a
     rate  of 8.5%.  Effective August 28, 1998, the interest rate
     was   increased  to  10.25%.   The  total  purchase   price,
     including  the  cost  of  the land,  will  be  approximately
     $1,490,000.  After the construction is complete,  the  Lease
     Agreement will be amended to require annual rental  payments
     of approximately $153,000.
     
     In April, 1998, the Partnership entered into an Agreement to
     purchase  an Old Country Buffet restaurant to be constructed
     in  Northlake,  Illinois.  On May 18, 1998, the  Partnership
     purchased  the  land for $330,000.  The Partnership  charged
     interest  on  the land at a rate of 10% until September  27,
     1998.  On September 28, 1998, the tenant began paying annual
     rent  of  $130,000.  On September 30, 1998, the  Partnership
     advanced  $370,000  for the construction  of  the  property.
     After the construction is complete, the Partnership will pay
     $639,000  of  additional  construction  costs.   The   total
     purchase  price  will  be  approximately  $1,339,000.    The
     property is leased to OCB Realty Co. under a Lease Agreement
     with a primary term of 20 years.
     
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     On August 28, 1998, the Partnership purchased a 38% interest
     in  a parcel of land in Centerville, Ohio for $703,376.  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  $49,236.   Simultaneously  with   the
     purchase  of  the  land,  the  Partnership  entered  into  a
     Development  Financing Agreement under which the Partnership
     will  advance funds to ADC for the construction of a Champps
     Americana  restaurant  on the site.  Through  September  30,
     1998,   the  Partnership  had  advanced  $141,042  for   the
     construction  of the property and was charging  interest  on
     the  advances at a rate of 7%.  The Partnership's  share  of
     the  total  purchase price, including the cost of the  land,
     will be approximately $1,609,300.  After the construction is
     complete,  the  Lease Agreement will be amended  to  require
     annual  rental  payments  of  approximately  $166,000.   The
     remaining  interests in the property are owned by  AEI  Real
     Estate  Fund XVII Limited Partnership, AEI Income  &  Growth
     Fund  XXI  Limited Partnership and AEI Income & Growth  Fund
     XXII Limited Partnership, affiliates of the Partnership.
     
     During  1997  and  the  first  nine  months  of  1998,   the
     Partnership  incurred net costs of $100,294 related  to  the
     review  of potential property acquisitions.  Of these costs,
     $10,441  have  been  capitalized  and  allocated  to   land,
     building and equipment.  The remaining costs of $89,853 have
     been   capitalized  and  will  be  allocated   to   property
     acquisitions in future periods.

(4)  Payable to AEI Fund Management  -

     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, 1998 and 1997, the
Partnership   recognized   rental  income   of   $1,083,020   and
$1,058,808,   respectively.   During  the   same   periods,   the
Partnership  earned investment income of $174,133  and  $129,390,
respectively.  In 1998, rental income increased as  a  result  of
the  additional  rent received from six property acquisitions  in
1997  and  1998  and  rent increases on  eight  properties.   The
increase  in  rental income was partially offset by the  property
sales   discussed   below.   In  1998,  the  Partnership   earned
additional  investment  income  on  the  net  proceeds  from  the
property sales.


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

        The  Partnership owned a 4.1022% interest  in  a  Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a  Sizzler
restaurant in Springboro, Ohio, and a 100% interest in a  Sizzler
restaurant   in  Fairfield,  Ohio.   In  November,  1993,   after
reviewing   the  lessee's  operating  results,  the   Partnership
determined  that  the  lessee would  be  unable  to  operate  the
restaurants  in  a manner capable of maximizing the  restaurants'
sales.   Consequently,  at the direction of  the  Partnership,  a
multi-unit   restaurant  operator  assumed   operation   of   the
restaurants while the Partnership reviewed the available options.
In  January,  1994  and  June, 1994, the Partnership  closed  the
restaurants  in  Cincinnati  and  Springboro,  respectively,  and
listed them for sale or lease.  While the properties were vacant,
the  Partnership  was responsible for the real estate  taxes  and
other costs required to maintain the properties.

        No  rents were collected from the Sizzler restaurants  in
the first nine months of 1998 and 1997.  The total amount of rent
not  collected  in  1998  and  1997 was  $101,715  and  $293,173,
respectively, for the three properties.  These amounts  were  not
accrued for financial reporting purposes.

        On January 23, 1997, the Partnership sold its interest in
the  Cincinnati  restaurant  to an unrelated  third  party.   The
Partnership  received  net  sales  proceeds  of  $19,867,   which
resulted in a net loss of $31,700, which was recognized as a real
estate impairment in 1996.

        In  December,  1996, the Partnership, in order  to  avoid
additional  property  management expenses, decided  to  sell  the
Sizzler  properties in Springboro and Fairfield  rather  than  to
continue to attempt to re-lease the properties.  As a result, the
properties were reclassified on the balance sheet to Real  Estate
Held  for  Sale.   In  addition, based on an analysis  of  market
conditions  in  the area, it was determined that a  sale  of  the
properties   would  result  in  net  proceeds  of   approximately
$800,000.   The  Partnership's share of  the  proceeds  would  be
approximately $773,000.  A charge to operations for  real  estate
impairment  of  $1,654,600 ($693,500 for the Springboro  Sizzler,
and  $961,100  for the Fairfield Sizzler) was recognized  in  the
fourth  quarter  of  1996, which is the difference  between  book
value  at  December  31, 1996 of $2,427,600 ($1,066,500  for  the
Springboro Sizzler and $1,361,100 for the Fairfield Sizzler)  and
the   estimated  market  value  of  $773,000  ($373,000  for  the
Springboro Sizzler and $400,000 for the Fairfield Sizzler).   The
charge  was  recorded against the cost of the land, building  and
equipment.

        On  September 22, 1997, the Partnership sold the  Sizzler
restaurant  in Fairfield, Ohio to an unrelated third party.   The
Partnership received net sale proceeds of $528,476, which  is  in
excess of the book value of the property after the recognition of
the  real  estate  impairment.   As  a  result,  the  Partnership
recognized a net gain of $128,498.

       On July 21, 1998, the Partnership sold its interest in the
Sizzler  restaurant  in Springboro, Ohio to  an  unrelated  third
party.   The Partnership received net sale proceeds of  $350,635,
which resulted in a net loss on the sale of $22,345.

        In August, 1995, the lessee of the two Rally's properties
filed  for reorganization.  After reviewing the operating results
of  the lessee, the Partnership agreed to amend the Leases of the
two  properties.   Effective December 1,  1995,  the  Partnership
amended  the  Leases to reduce the annual base rent from  $47,498
and  $48,392 to $15,000 for each property.  The Partnership could
receive  additional  rent in the future equal  to  6.75%  of  the
amount  by  which gross receipts exceed $275,000.  In  1997,  the
Leases,  as amended, were confirmed as part of the reorganization
plan.   The  lessee has agreed to pay all pre-petition and  post-
petition  rents  due  of  $75,775 and the  Partnership's  related
administrative and legal expenses.  However, the Partnership  has
not collected any of these amounts and, due to the uncertainty of
collection,   has  not  accrued  them  for  financial   reporting
purposes.

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

        As  of  December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value  of  the
Rally's  properties was approximately $270,000.   In  the  fourth
quarter  of  1997,  a  charge  to  operations  for  real   estate
impairment  of  $220,500 was recognized, which is the  difference
between  the book value at December 31, 1997 of $490,500 and  the
estimated  fair  value  of  $270,000.  The  charge  was  recorded
against the cost of the building and equipment.

        In  February, 1996, the Partnership called  a  letter  of
credit  for  $109,393  related to the Taco Cabana  restaurant  in
Brownsville, Texas.  The Partnership applied the funds to satisfy
1996  rent income and real estate taxes due and a portion of  the
real  estate  taxes due in 1997.  In 1997, the  Partnership  took
possession of the property and listed it for sale or lease.   The
Partnership  was  scheduled  to receive,  but  did  not  collect,
$89,134 and $85,706 in rent in the first nine months of 1998  and
1997, respectively.  These amounts were not accrued for financial
reporting   purposes.   While  the  property   is   vacant,   the
Partnership is responsible for 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
Brownsville property was approximately $466,600.  In  the  fourth
quarter  of  1997,  a  charge  to  operations  for  real   estate
impairment  of  $239,600 was recognized, which is the  difference
between  the book value at December 31, 1997 of $706,200 and  the
estimated  fair  value  of  $466,600.  The  charge  was  recorded
against the cost of the land and building.

        During the nine months ended September 30, 1998 and 1997,
the  Partnership  paid  Partnership  administration  expenses  to
affiliated parties of $188,901 and $195,928, 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  $51,017 and $96,475, 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 1998, when compared to 1997, is the  result
of  expenses incurred in 1997 related to the Sizzler and  Rally's
situations discussed above.

        As  of  September 30, 1998, the Partnership's  annualized
cash  distribution rate was 6.1%, based on the  Adjusted  Capital
Contribution.   Distributions of Net Cash  Flow  to  the  General
Partners were 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.   It is expected that increases in sales  volumes  of
the  tenants due to inflation and real sales growth, 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.


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

        AEI  Fund  Management, Inc. (AEI) performs all management
services  for  the Partnership.  AEI is currently  analyzing  its
computer hardware and software systems to determine what, if any,
resources  need to be dedicated regarding Year 2000 issues.   The
Partnership  does  not  anticipate  any  significant  operational
impact  or  incurring material costs as a result of AEI  becoming
Year 2000 compliant.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  1998,  the
Partnership's  cash  balances decreased $3,476,563  mainly  as  a
result of cash used to purchase additional properties.  Net  cash
provided by operating activities increased from $886,237 in  1997
to  $1,060,794 in 1998.  The increase was due to an  increase  in
income  and  a  decrease  in expenses in  1998,  and  net  timing
differences  in the collection of payments from the  lessees  and
the payment of expenses.

        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, 1998 and 1997, the Partnership generated cash  flow
from  the  sale  of  real  estate  of  $350,635  and  $3,196,982,
respectively.  During the same periods, the Partnership  expended
$3,924,927  and  $1,445,445,  respectively,  to  invest  in  real
properties (inclusive of acquisition expenses) as the Partnership
reinvested cash generated from property sales.

        Through  December 31, 1997, the Partnership sold 94.1709%
of the Applebee's restaurant in Destin, Florida in seven separate
transactions   to  unrelated  third  parties.   The   Partnership
received total net sale proceeds of $1,413,627 which resulted  in
a  total  net  gain  of  $481,379.  The total  cost  and  related
accumulated depreciation of the interests sold was $1,053,565 and
$121,317, respectively.  For the nine months ended September  30,
1997, the net gain was $320,171.

        Through  December 31, 1997, the Partnership sold 90.6301%
of  a  Taco  Cabana  restaurant in San Antonio,  Texas  in  seven
separate   transactions   to  unrelated   third   parties.    The
Partnership received total net sale proceeds of $1,520,182  which
resulted  in  a total net gain of $562,654.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$1,043,983 and $86,455, respectively.  For the nine months  ended
September 30, 1997, the net gain was $172,591.

        Through  December 31, 1997, the Partnership sold 77.4842%
of  its  interest  in  the  Tractor Supply  Company  in  Bristol,
Virginia  in  seven  separate  transactions  to  unrelated  third
parties.   The  Partnership received total net sale  proceeds  of
$1,189,572  which resulted in a total net gain of $217,301.   The
total  cost and related accumulated depreciation of the interests
sold was $997,602 and $25,331, respectively.  For the nine months
ended September 30, 1997, the net gain was $72,607.

        Through  December 31, 1997, the Partnership sold 26.0312%
of  its interest in the Champps Americana restaurant in Columbus,
Ohio  in  three separate transactions to unrelated third parties.
The  Partnership  received total net sale  proceeds  of  $807,777
which  resulted in a total net gain of $151,139.  The total  cost
and  related accumulated depreciation of the interests  sold  was
$667,813  and  $11,175, respectively.  For the nine months  ended
September 30, 1997, the net gain was $151,139.


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

        During  the  first nine months of 1997,  the  Partnership
distributed $104,820 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 $4.77 per
Limited Partnership Unit.

       On July 30, 1997, the Partnership purchased a Fuddrucker's
restaurant in Thornton, Colorado for $1,405,771.  The property is
leased  to  Fuddrucker's, Inc. under a  Lease  Agreement  with  a
primary term of 20 years and annual rental payments of $148,387.

        On  December 23, 1997, the Partnership purchased a 23.95%
interest in a parcel of land in Troy, Michigan for $361,889.  The
land  is leased to Champps Entertainment, Inc. (Champps) under  a
Lease Agreement with a primary term of 20 years and annual rental
payments  of  $25,332.  Effective June 20, 1998, the annual  rent
was  increased to $37,998.  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  June  20,  1998,  the
interest  rate  was increased to 10.50%.  On September  3,  1998,
after  the  development was completed, the  Lease  Agreement  was
amended  to  require  annual rental payments  of  $122,605.   The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,175,806.  The remaining interests in the
property   are  owned  by  AEI  Real  Estate  Fund   XV   Limited
Partnership,  AEI Real Estate Fund XVII Limited  Partnership  and
AEI  Net  Lease  Income  & Growth Fund XIX  Limited  Partnership,
affiliates of the Partnership.

         In  January,  1998,  the  Partnership  entered  into  an
agreement  to purchase a 45% interest in a Tumbleweed  restaurant
in  Chillicothe,  Ohio.   On  April  13,  1998,  the  Partnership
purchased its share of the land for $216,915.  The land is leased
to  Tumbleweed, LLC (TLLC) under a Lease Agreement with a primary
term   of  15  years  and  annual  rental  payments  of  $18,438.
Effective  August  10,  1998, the annual rent  was  increased  to
$22,234.   Simultaneously  with the purchase  of  the  land,  the
Partnership entered into a Development Financing Agreement  under
which  the  Partnership  will  advance  funds  to  TLLC  for  the
construction  of  a Tumbleweed restaurant on the  site.   Through
September 30, 1998, the Partnership had advanced $300,558 for the
construction  of  the property and was charging interest  on  the
advances  at  a  rate of 8.5%.  Effective August  10,  1998,  the
interest  rate was increased to 10.25%.  The Partnership's  share
of the total purchase price, including the cost of the land, will
be  approximately $610,650.  After the construction is  complete,
the  Lease  Agreement  will be amended to require  annual  rental
payments  of  approximately $62,600.  The remaining interests  in
the  property are owned by the Individual General Partner and AEI
Net   Lease   Income  &  Growth  Fund  XIX  Limited  Partnership,
affiliates of the Partnership.

        In April, 1998, the Partnership entered into an agreement
to purchase a Tumbleweed restaurant in Columbus, Ohio.  On May 1,
1998, the Partnership purchased the land for $503,832.  The  land
is  leased to TLLC under a Lease Agreement with a primary term of
15 years and annual rental payments of $42,826.  Effective August
28,   1998,   the   annual   rent  was  increased   to   $51,643.
Simultaneously  with  the purchase of the land,  the  Partnership
entered  into a Development Financing Agreement under  which  the
Partnership will advance funds to TLLC for the construction of  a
Tumbleweed restaurant on the site.  Through September  30,  1998,
the Partnership had advanced $595,824 for the construction of the
property and was charging interest on the advances at a  rate  of
8.5%.  Effective August 28, 1998, the interest rate was increased
to  10.25%.  The total purchase price, including the cost of  the
land,  will  be approximately $1,490,000.  After the construction
is  complete,  the  Lease Agreement will be  amended  to  require
annual rental payments of approximately $153,000.


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

        In April, 1998, the Partnership entered into an Agreement
to purchase an Old Country Buffet restaurant to be constructed in
Northlake, Illinois.  On May 18, 1998, the Partnership  purchased
the  land for $330,000.  The Partnership charged interest on  the
land at a rate of 10% until September 27, 1998.  On September 28,
1998,  the  tenant  began paying annual  rent  of  $130,000.   On
September  30,  1998, the Partnership advanced $370,000  for  the
construction   of  the  property.   After  the  construction   is
complete,   the  Partnership  will  pay  $639,000  of  additional
construction   costs.    The  total  purchase   price   will   be
approximately $1,339,000.  The property is leased to  OCB  Realty
Co. under a Lease Agreement with a primary term of 20 years.

        On  August  28,  1998, the Partnership  purchased  a  38%
interest  in a parcel of land in Centerville, Ohio for  $703,376.
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  $49,236.  Simultaneously with the purchase  of  the
land,  the  Partnership  entered  into  a  Development  Financing
Agreement under which the Partnership will advance funds  to  ADC
for  the  construction of a Champps Americana restaurant  on  the
site.   Through September 30, 1998, the Partnership had  advanced
$141,042  for  the construction of the property and was  charging
interest  on  the  advances at a rate of 7%.   The  Partnership's
share  of  the total purchase price, including the  cost  of  the
land,  will  be approximately $1,609,300.  After the construction
is  complete,  the  Lease Agreement will be  amended  to  require
annual  rental payments of approximately $166,000.  The remaining
interests in the property are owned by AEI Real Estate Fund  XVII
Limited  Partnership,  AEI  Income  &  Growth  Fund  XXI  Limited
Partnership   and   AEI  Income  &  Growth  Fund   XXII   Limited
Partnership, affiliates of the Partnership.

       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.   Prior  to  1998,
redemption payments were paid to redeeming Partners in the fourth
quarter  of  each  year.  Beginning in 1998, redemption  payments
will  be  paid to redeeming Partners on a quarterly  basis.   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.

        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 April 1, 1998, six Limited Partners redeemed a total of
161.0  Partnership  Units for $128,961  in  accordance  with  the
Partnership  Agreement.   On  July  1,  1998,  nineteen   Limited
Partners  redeemed  a  total  of  199.0  Partnership  Units   for
$159,399.   On  October  1,  1998,  seventeen  Limited   Partners
redeemed  a  total of 216.8 Partnership Units for $173,544.   The
Partnership  acquired  these  Units  using  Net  Cash  Flow  from
operations.   In  prior  years, a total  of  sixty-eight  Limited
Partners redeemed 1,295.52 Partnership Units for $1,028,771.  The
redemptions  increase the remaining Limited  Partners'  ownership
interest in the Partnership.


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

       The continuing rent payments from the properties, together
with  cash generated from the property sales, should be  adequate
to  fund  continuing  distributions and  meet  other  Partnership
obligations on both a short-term and long-term basis.
                                
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995

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

<bullet>  Market  and economic conditions which affect the  value
          of  the  properties the Partnership owns and  the  cash
          from rental income such properties generate;
       
<bullet>  the  federal income tax consequences of rental  income,
          deductions,  gain  on  sales and other  items  and  the
          affects of these consequences for investors;
       
<bullet>  resolution  by  the General Partners of conflicts  with
          which they may be confronted;
       
<bullet>  the   success  of  the  General  Partners  of  locating
          properties with favorable risk return characteristics;
       
<bullet>  the effect of tenant defaults; and
       
<bullet>  the condition of the industries in which the tenants of
          properties owned by the Partnership operate.
                                
                                
                   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.

                   PART II - OTHER INFORMATION
                           (Continued)
                                
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  First  Amendment  to  Net
                Lease  Agreement dated September  3,  1998
                between  the  Partnership, AEI  Net  Lease
                Income   &   Growth   Fund   XIX   Limited
                Partnership,  AEI  Real Estate  Fund  XVII
                Limited Partnership, AEI Real Estate  Fund
                XV   Limited   Partnership   and   Champps
                Entertainment,   Inc.  relating   to   the
                property  at  301  West Big  Beaver  Road,
                Troy, Michigan.

          10.2  Assignment   of    the
                Development  Financing Agreement  and  Net
                Lease  Agreement  dated  August  27,  1998
                between  the Partnership, AEI Real  Estate
                Fund  XVII Limited Partnership, AEI Income
                &  Growth  Fund  XXI Limited  Partnership,
                AEI  Income  &  Growth Fund  XXII  Limited
                Partnership    and    Americana     Dining
                Corporation  relating to the  property  at
                7880     Washington     Village     Drive,
                Centerville, Ohio.

          10.3  Development Financing
                Agreement dated June 29, 1998 between  AEI
                Income   &   Growth  Fund   XXII   Limited
                Partnership    and    Americana     Dining
                Corporation  relating to the  property  at
                7880     Washington     Village     Drive,
                Centerville, Ohio.

          10.4  Net Lease Agreement dated
                June  29, 1998 between AEI Income & Growth
                Fund   XXII   Limited   Partnership    and
                Americana  Dining Corporation relating  to
                the  property  at 7880 Washington  Village
                Drive, Centerville, Ohio.

          27    Financial Data Schedule  for  period
                ended September 30, 1998.

            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 9, 1998      AEI Real Estate Fund XVIII
                              Limited Partnership
                              By: AEI Fund Management  XVIII, 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)