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, 1997
                                
                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)
                                
                          (612) 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, 1997 and December 31, 1996 

          Statements for the Periods ended September 30, 1997 and 1996:

            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, 1997 AND DECEMBER 31, 1996
                                
                           (Unaudited)
                                
                             ASSETS
                                
                                                      1997            1996

CURRENT ASSETS:
  Cash and Cash Equivalents                      $ 3,996,690      $ 2,359,926
  Receivables                                          2,348           12,870
                                                  -----------      -----------
      Total Current Assets                         3,999,038        2,372,796
                                                  -----------      -----------
INVESTMENTS IN REAL ESTATE:
  Land                                             3,958,287        4,374,569
  Buildings and Equipment                          8,924,928        9,198,045
  Property Acquisition Costs                          69,871                0
  Accumulated Depreciation                        (1,817,861)      (1,706,567)
                                                  -----------      -----------
                                                  11,135,225       11,866,047
  Real Estate Held for Sale                          372,980          792,877
                                                  -----------      -----------
      Net Investments in Real Estate              11,508,205       12,658,924
                                                  -----------      -----------
            Total  Assets                        $15,507,243      $15,031,720
                                                  ===========      ===========


                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.           $    55,016      $   121,697
  Distributions Payable                              323,389          323,784
  Security Deposit                                         0              665
  Unearned Rent                                       52,266            5,000
                                                  -----------      -----------
      Total Current Liabilities                      430,671          451,146
                                                  -----------      -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                   (44,698)         (49,658)
  Limited Partners, $1,000 Unit Value;
   30,000 Units authorized; 22,783 Issued;
   21,764 Units outstanding                       15,121,270       14,630,232
                                                  -----------      -----------
      Total Partners' Capital                     15,076,572       14,580,574
                                                  -----------      -----------
        Total Liabilities and Partners' Capital  $15,507,243      $15,031,720
                                                  ===========      ===========
                                
 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
                               9/30/97      9/30/96     9/30/97       9/30/96

INCOME:
   Rent                     $  354,720   $  419,358   $ 1,058,808   $ 1,233,721
   Investment Income            42,784       25,781       129,390        79,671
                             ---------    ---------    ----------    ----------
        Total Income           397,504      445,139     1,188,198     1,313,392
                             ---------    ---------    ----------    ----------

EXPENSES:
   Partnership Administration - 
    Affiliates                  61,897       63,639       195,928       184,882
   Partnership Administration 
    and Property Management - 
    Unrelated Parties           46,728       40,749        96,475       140,096
   Depreciation                 83,649      108,398       244,188       319,797
                             ---------    ---------    ----------    ----------
        Total Expenses         192,274      212,786       536,591       644,775
                             ---------    ---------    ----------    ----------

OPERATING INCOME               205,230      232,353       651,607       668,617

GAIN ON SALE OF REAL ESTATE    468,544       90,156       845,006       344,461

MINORITY INTEREST IN NET INCOME      0      (13,081)            0       (20,795)
                             ---------    ---------    ----------    ----------

NET INCOME                  $  673,774   $  309,428   $ 1,496,613   $   992,283
                             =========    =========    ==========    ==========

NET INCOME ALLOCATED:
   General Partners         $    6,738   $    3,094   $    14,966   $     9,923
   Limited Partners            667,036      306,334     1,481,647       982,360
                             ---------    ---------    ----------    ----------
                            $  673,774   $  309,428   $ 1,496,613   $   992,283
                             =========    =========    ==========    ==========

NET INCOME PER
  LIMITED PARTNERSHIP UNIT
  (21,764 and 22,078 weighted average
  Units outstanding in 1997 
  and 1996, respectively)   $    30.65   $    13.87   $     68.08   $     44.49
                             =========    =========    ==========    ==========


 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)
                                
                                                       1997           1996
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net  Income                                     $ 1,496,613    $   992,283

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                      244,188        319,797
     Gain on Sale of Real Estate                      (845,006)      (344,461)
     Decrease in Receivables                            10,522         21,064
     Decrease in Payable to
        AEI Fund Management, Inc.                      (66,681)        (7,008)
     Increase (Decrease) in Security Deposit              (665)        31,010
     Increase in Unearned Rent                          47,266         45,160
     Minority Interest                                       0         (5,795)
                                                    -----------    -----------
        Total Adjustments                             (610,376)        59,767
                                                    -----------    -----------
        Net Cash Provided By
        Operating Activities                           886,237      1,052,050
                                                    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Investments in Real Estate                     (1,445,445)    (1,911,639)
     Proceeds from Sale of Real Estate - Net of
      Minority Interest                              3,196,982      1,303,490
                                                    -----------    -----------
        Net Cash Provided By (Used For)
        Investing Activities                         1,751,537       (608,149)
                                                    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                      (395)       (82,554)
   Distributions to Partners                        (1,000,615)    (1,001,078)
                                                    -----------    -----------
        Net Cash Used For
        Financing Activities                        (1,001,010)    (1,083,632)
                                                    -----------    -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                 1,636,764       (639,731)

CASH AND CASH EQUIVALENTS, beginning of period       2,359,926      2,332,974
                                                    -----------    -----------

CASH AND CASH EQUIVALENTS, end of period           $ 3,996,690    $ 1,693,243
                                                    ===========    ===========
                                
                                
                                
 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, 1995    $ (29,971)  $16,380,078  $16,350,107    22,077.80

  Distributions                 (10,011)     (991,067)  (1,001,078)

  Net Income                      9,923       982,360      992,283
                               ---------   -----------  -----------  ----------
BALANCE, September 30, 1996   $ (30,059)  $16,371,371  $16,341,312    22,077.80
                               =========   ===========  ===========  ==========


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
                               =========   ===========  ===========  ==========




 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, 1997
                                
                           (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  owns  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  are  vacant,  the  Partnership   is
     responsible  for  the  real estate  taxes  and  other  costs
     required to maintain the properties.
     
     On  July 15, 1994, the Partnership re-leased the Sizzler  in
     Fairfield to Fairfield Foods, Inc. (Fairfield) under a Lease
     Agreement with a primary term of 20 years and annual  rental
     payments based on a percentage of sales.  Fairfield was  not
     able  to  profitably operate the restaurant and  closed  the
     restaurant.
     
     No  rents were collected from the Sizzler restaurants in the
     first  nine  months of 1997 and 1996.  The total  amount  of
     rent  not  collected  in  1997 and  1996  was  $293,173  and
     $296,145,  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 the fourth quarter of 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.
     
         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
     $74,525  and  the  Partnership's related administrative  and
     legal   expenses.   However,  due  to  the  uncertainty   of
     collection,  the Partnership has not accrued  any  of  these
     amounts for financial reporting purposes.
     
     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  rents  and  real estate taxes due.   In  1997,  the
     Partnership  took possession of the property and  listed  it
     for  sale or re-lease.  While the property is being sold  or
     re-leased,  the Partnership is responsible for  real  estate
     taxes and other costs required to maintain the property.
     
     The  Partnership used the majority of the proceeds from  two
     property  sales in 1995 to purchase two properties in  1996,
     as  discussed  below.  The remainder of  the  proceeds  from
     these  sales  were distributed to the Partners in  1995  and
     1996.
     
     On  April  10,  1996,  the Partnership  purchased  an  85.0%
     interest  in  a Tractor Supply Company in Bristol,  Virginia
     for  $1,094,367.  The property is leased to  Tractor  Supply
     Company  under a Lease Agreement with a primary term  of  14
     years and annual rental payments of $116,686.  The remaining
     interest  in  the property was purchased by  the  Individual
     General Partner of the Partnership.
     
     On  August  29,  1996,  the Partnership  purchased  a  32.2%
     interest in a Champps Americana restaurant in Columbus, Ohio
     for  $826,070.   The property is leased to Americana  Dining
     Corporation under a Lease Agreement with a primary  term  of
     20  years  and  annual  rental  payments  of  $90,834.   The
     remaining  interest  in the property was  purchased  by  AEI
     Income  &  Growth Fund XXI Limited Partnership, an affiliate
     of the Partnership.
     
     On  May  10,  1996,  the Partnership sold  the  Taco  Cabana
     restaurant  in  New Braunfels, Texas to an  unrelated  third
     party.   The  Partnership  received  net  sale  proceeds  of
     $962,298, which resulted in a net gain of $254,305.  At  the
     time  of sale, the cost and related accumulated depreciation
     of the property was $784,045 and $76,052, respectively.
     
     Through September 30, 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.
     
                                
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(3)  Investments in Real Estate - (Continued)

     Through September 30, 1997, the Partnership sold 64.9377% of
     a  Taco  Cabana  restaurant in San Antonio,  Texas  in  five
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received total net sale proceeds of  $1,067,551
     which  resulted in a total net gain of $379,348.  The  total
     cost  and  related accumulated depreciation of the interests
     sold  was $748,028 and $59,825, respectively.  For the  nine
     months  ended September 30, 1997 and 1996, the net gain  was
     $172,591 and $70,396, respectively.
     
     Through September 30, 1997, the Partnership sold 47.3553% of
     the  Tractor  Supply Company in Bristol,  Virginia  in  five
     separate  transactions  to  unrelated  third  parties.   The
     Partnership  received  total net sale proceeds  of  $709,795
     which  resulted in a total net gain of $110,391.  The  total
     cost  and  related accumulated depreciation of the interests
     sold  was $609,695 and $10,291, respectively.  For the  nine
     months  ended September 30, 1997 and 1996, the net gain  was
     $72,607 and $16,621, respectively.
     
     Through September 30, 1997, the Partnership sold 26.0312% of
     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.
     
     In   October,  1997,  the  Partnership  sold  an  additional
     25.6924%  of  the  Taco Cabana restaurant  in  San  Antonio,
     Texas,  in  two  separate transactions, to  unrelated  third
     parties.   The  Partnership received net  sale  proceeds  of
     approximately  $440,000, which resulted in  a  net  gain  of
     approximately $171,000.
     
     Pursuant to the Partnership Agreement, net sale proceeds may
     be  reinvested in additional properties until  a  date  five
     years after the date on which the offer and sale of Units is
     terminated.   This period expired on December 4,  1995.   In
     December, 1996, the Managing General Partner filed  a  proxy
     statement to propose an Amendment to the Limited Partnership
     Agreement  that would allow the Partnership to reinvest  the
     majority   of  the  sale  proceeds  from  the  Taco   Cabana
     restaurants, Tractor Supply Company and subsequent  property
     sales in additional properties.  The Amendment passed with a
     majority of Units voting in favor of the Amendment.
     
     On  July  30, 1997, the Partnership purchased a Fuddrucker's
     restaurant  in  Thornton,  Colorado  for  $1,375,573.    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.
     
     During the first nine months of 1997 and the year 1996,  the
     Partnership  distributed $104,820 and $372,366  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  and  $16.85  per   Limited
     Partnership Unit, respectively.
     
                                
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)
                                
(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, 1997 and 1996, the
Partnership   recognized   rental  income   of   $1,058,808   and
$1,233,721,   respectively.   During  the   same   periods,   the
Partnership  earned  investment income of $129,390  and  $79,671,
respectively.   In  1997, rental income  decreased  mainly  as  a
result  of  the  property sales and the Brownsville  Taco  Cabana
situation  discussed below.  The decrease in  rental  income  was
partially  offset by rental income received from three subsequent
property  acquisitions, rent increases on eleven  properties  and
additional investment income earned on the net proceeds from  the
property sales.

        The  Partnership  owns 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 are vacant,
the  Partnership  is responsible for the real  estate  taxes  and
other costs required to maintain the properties.

       On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield  to  Fairfield Foods, Inc. (Fairfield)  under  a  Lease
Agreement  with  a  primary term of 20 years  and  annual  rental
payments based on a percentage of sales.  Fairfield was not  able
to profitably operate the restaurant and closed the restaurant.

        No  rents were collected from the Sizzler restaurants  in
the first nine months of 1997 and 1996.  The total amount of rent
not  collected  in  1997  and  1996 was  $293,173  and  $296,145,
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 the fourth quarter of 1996.


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

        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  December31,  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.

        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  $74,525 and the  Partnership's  related
administrative  and  legal  expenses.   However,   due   to   the
uncertainty of collection, the Partnership has not accrued any of
these amounts for financial reporting purposes.

        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
rents  and real estate taxes due.  In 1997, the Partnership  took
possession  of the property and listed it for sale  or  re-lease.
While the property is being sold or re-leased, the Partnership is
responsible  for  real estate taxes and other costs  required  to
maintain the property.

        During the nine months ended September 30, 1997 and 1996,
the  Partnership  paid  Partnership  administration  expenses  to
affiliated parties of $195,928 and $184,882, 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  $96,475 and $140,096, 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 1997, when compared to the same period  in
1996,  is the result of expenses incurred in 1996 related to  the
Sizzler situation discussed above.

        As  of  September 30, 1997, 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.


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

        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.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  1997,  the
Partnership's  cash balances increased $1,636,764 mainly  as  the
result  of  the  sale of properties discussed  below.   Net  cash
provided  by  operating activities decreased from  $1,052,050  in
1996  to  $886,237 in 1997 mainly as a result of  a  decrease  in
income in 1997, when compared to 1996, 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.  For  the  nine  months  ended
September 30, 1997 and 1996, the Partnership generated cash  flow
from  the  sale of real estate, as discussed below, of $3,196,982
and  $1,303,490,  respectively.  During  the  same  periods,  the
Partnership expended $1,445,445 and $1,911,639, respectively,  to
invest in real properties (inclusive of acquisition expenses)  as
the  Partnership reinvested the cash generated from the  property
sales.

       The Partnership used the majority of the proceeds from two
property  sales in 1995 to purchase two properties  in  1996,  as
discussed below.  The remainder of the proceeds from these  sales
were distributed to the Partners in 1995 and 1996.

        On  April  10, 1996, the Partnership purchased  an  85.0%
interest  in  a Tractor Supply Company in Bristol,  Virginia  for
$1,094,367.   The  property is leased to Tractor  Supply  Company
under  a  Lease  Agreement with a primary term of  14  years  and
annual  rental payments of $116,686.  The remaining  interest  in
the  property was purchased by the Individual General Partner  of
the Partnership.

        On  August  29, 1996, the Partnership purchased  a  32.2%
interest in a Champps Americana restaurant in Columbus, Ohio  for
$826,070.  The property is leased to Americana Dining Corporation
under  a  Lease  Agreement with a primary term of  20  years  and
annual rental payments of $90,834.  The remaining interest in the
property  was purchased by AEI Income & Growth Fund  XXI  Limited
Partnership, an affiliate of the Partnership.

        On  May  10,  1996, the Partnership sold the Taco  Cabana
restaurant  in New Braunfels, Texas to an unrelated third  party.
The  Partnership  received net sale proceeds of  $962,298,  which
resulted  in  a net gain of $254,305.  At the time of  sale,  the
cost  and  related accumulated depreciation of the  property  was
$784,045 and $76,052, respectively.

        Through September 30, 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.


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

        Through September 30, 1997, the Partnership sold 64.9377%
of  a  Taco  Cabana  restaurant in San  Antonio,  Texas  in  five
separate   transactions   to  unrelated   third   parties.    The
Partnership received total net sale proceeds of $1,067,551  which
resulted  in  a total net gain of $379,348.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$748,028  and  $59,825, respectively.  For the nine months  ended
September  30,  1997  and 1996, the net  gain  was  $172,591  and
$70,396, respectively.

        Through September 30, 1997, the Partnership sold 47.3553%
of  the  Tractor  Supply  Company in Bristol,  Virginia  in  five
separate   transactions   to  unrelated   third   parties.    The
Partnership  received total net sale proceeds of  $709,795  which
resulted  in  a total net gain of $110,391.  The total  cost  and
related  accumulated  depreciation  of  the  interests  sold  was
$609,695  and  $10,291, respectively.  For the nine months  ended
September  30,  1997  and  1996, the net  gain  was  $72,607  and
$16,621, respectively.

        Through September 30, 1997, the Partnership sold 26.0312%
of  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.

        In  October,  1997,  the Partnership sold  an  additional
25.6924% of the Taco Cabana restaurant in San Antonio, Texas,  in
two  separate  transactions,  to unrelated  third  parties.   The
Partnership received net sale proceeds of approximately $440,000,
which resulted in a net gain of approximately $171,000.

        Pursuant to the Partnership Agreement, net sale  proceeds
may  be  reinvested in additional properties until  a  date  five
years  after  the date on which the offer and sale  of  Units  is
terminated.   This  period  expired  on  December  4,  1995.   In
December,  1996,  the  Managing General  Partner  filed  a  proxy
statement  to  propose  an Amendment to the  Limited  Partnership
Agreement  that  would  allow  the Partnership  to  reinvest  the
majority  of  the sale proceeds from the Taco Cabana restaurants,
Tractor   Supply  Company  and  subsequent  property   sales   in
additional  properties.  The Amendment passed with a majority  of
Units voting in favor of the Amendment.

       On July 30, 1997, the Partnership purchased a Fuddrucker's
restaurant in Thornton, Colorado for $1,375,573.  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.

        During  the first nine months of 1997 and the year  1996,
the Partnership distributed $104,820 and $372,366 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  and  $16.85  per  Limited  Partnership  Unit,
respectively.

       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.  Redemption  payments
are  paid  to  redeeming Partners in the fourth quarter  of  each
year.   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.


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

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be  acquired at a discount.  The Partnership is not obligated  to
purchase  in  any  year  more than 5%  of  the  number  of  Units
outstanding at the beginning of the year.  In no event shall  the
Partnership  be  obligated to purchase  Units  if,  in  the  sole
discretion  of the Managing General Partner, such purchase  would
impair the capital or operation of the Partnership.

        On October 1, 1997, seventeen Limited Partners redeemed a
total of 277.1 Partnership Units for $193,337 in accordance  with
the  Partnership Agreement.  The Partnership acquired these Units
using Net Cash Flow from operations.  In prior years, a total  of
sixty-one  Limited  Partners redeemed 1,018.42 Partnership  Units
for  $835,859.   The  redemptions increase the remaining  Limited
PartnersO ownership interest in the Partnership.

       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.
                                
                                
                   PART II - OTHER INFORMATION
                                
ITEM 1.LEGAL PROCEEDINGS

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

ITEM 2.CHANGES IN SECURITIES

      None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

       In September, 1997, the Managing General Partner solicited
  by  mail  a  proxy  statement to propose an  Amendment  to  the
  Limited  Partnership Agreement.  The Amendment made changes  to
  the  PartnershipOs Unit repurchase provisions.  In order for  a
  proposed Amendment to be adopted, a majority of the Units  must
  be  voted in favor of the Amendment.  Of the 21,764 outstanding
  Units,  11,694 voted for the Amendment, 442 voted  against  and
  262 abstained.  As a result, the Amendment was adopted.

ITEM 5.OTHER INFORMATION

      None.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

      a. Exhibits -
                             Description

           10.1  Purchase  Agreement dated  July  16,
                 1997  between the Partnership and  Stanley
                 E.  LaCorte  relating to the  property  at
                 5701   Emerald   Coast  Parkway,   Destin,
                 Florida.

           10.2  Purchase Agreement dated August  19,
                 1997  between the Partnership  and  Truong
                 Hoang,  Trustee and Thanh Do,  Trustee  of
                 the  Hoang-Do Family Living Trust relating
                 to  the  property  at 5701  Emerald  Coast
                 Parkway, Destin, Florida.

           10.3  Property   Co-tenancy    Ownership
                 Agreement  dated September9, 1997  between
                 the  Partnership and Truong Hoang, Trustee
                 and  Thanh  Do,  Trustee of  the  Hoang-Do
                 Family   Living  Trust  relating  to   the
                 property  at  5701 Emerald Coast  Parkway,
                 Destin, Florida.

           10.4  Purchase  Agreement dated  September
                 9,  1997 between the Partnership and  Nick
                 DeVito,  Inc. relating to the property  at
                 6867 Highway 90 West, San Antonio, Texas.

           10.5  Property   Co-tenancy    Ownership
                 Agreement dated September22, 1997  between
                 the  Partnership  and Stanley  E.  LaCorte
                 relating  to the property at 5701  Emerald
                 Coast Parkway, Destin, Florida.

           10.6  Property   Co-tenancy    Ownership
                 Agreement dated September25, 1997  between
                 the  Partnership  and  Nick  DeVito,  Inc.
                 relating  to the property at 6867  Highway
                 90 West, San Antonio, Texas.

           10.7  Purchase  Agreement dated  September
                 30,   1997  between  the  Partnership  and
                 Reginald  O. Hill, Trustee of the Reginald
                 O.  Hill  Trust  dated 5/25/95  and  Donna
                 Jean  Hill, Trustee of the Donna Jean Hill
                 Trust   dated  5/25/95  relating  to   the
                 property  at  6867 Highway  90  West,  San
                 Antonio, Texas.

           10.8  Purchase Agreement dated October  5,
                 1997  between the Partnership and  Anthony
                 Drago,  Trustee,  U/A  DTD  8/19/80,   FBO
                 Anthony  and  Sydelle Drago  Family  Trust
                 relating  to the property at 6867  Highway
                 90 West, San Antonio, Texas.

           10.9  Property   Co-tenancy    Ownership
                 Agreement  dated October 9,  1997  between
                 the  Partnership  and  Reginald  O.  Hill,
                 Trustee  of  the Reginald  O.  Hill  Trust
                 dated   5/25/95  and  Donna   Jean   Hill,
                 Trustee  of  the  Donna  Jean  Hill  Trust
                 dated 5/25/95 relating to the property  at
                 6867 Highway 90 West, San Antonio, Texas.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K  (Continued)

      a. Exhibits -
                           Description

          10.10  Property  Co-tenancy  Ownership
                 Agreement  dated October 24, 1997  between
                 the   Partnership   and   Anthony   Drago,
                 Trustee, U/A DTD 8/19/80, FBO Anthony  and
                 Sydelle  Drago  Family Trust  relating  to
                 the  property at 6867 Highway 90 West, San
                 Antonio, Texas.

            27   Financial Data Schedule  for  period
                 ended September 30, 1997.

       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 4, 1997      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)