UNITED STATES
               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:  June 30, 2005

                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.)


    30 East 7th Street, Suite 1300, 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 June 30, 2005 and December 31, 2004

          Statements for the Periods ended June 30, 2005 and 2004:

             Income

             Cash Flows

             Changes in Partners' Capital

          Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

 Item 3. Controls and Procedures

PART II. Other Information

 Item 1. Legal Proceedings

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

 Item 3. Defaults Upon Senior Securities

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

 Item 5. Other Information

 Item 6. Exhibits

         Signatures


<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                          BALANCE SHEET
               JUNE 30, 2005 AND DECEMBER 31, 2004

                           (Unaudited)

                             ASSETS

                                                     2005          2004
CURRENT ASSETS:
  Cash and Cash Equivalents                      $ 1,607,539    $ 1,122,394
  Receivables                                              0         44,454
                                                  -----------    -----------
      Total Current Assets                         1,607,539      1,166,848
                                                  -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                             4,661,701      4,661,701
  Buildings and Equipment                         10,167,608     10,167,608
  Accumulated Depreciation                        (2,177,834)    (2,009,390)
                                                  -----------    -----------
                                                  12,651,475     12,819,919
  Real Estate Held for Sale                        1,157,654      1,805,177
                                                  -----------    -----------
      Net Investments in Real Estate              13,809,129     14,625,096
                                                  -----------    -----------
           Total  Assets                         $15,416,668    $15,791,944
                                                  ===========    ===========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.           $    55,886    $    49,770
  Distributions Payable                              871,321        670,042
  Unearned Rent                                      125,179         21,041
                                                  -----------    -----------
      Total Current Liabilities                    1,052,386        740,853
                                                  -----------    -----------
PARTNERS' CAPITAL:
  General Partners                                    26,720         33,588
  Limited Partners, $1,000 per Unit;
   30,000 Units authorized; 22,783 Issued;
   19,198 and 19,344 Units outstanding in
   2005 and 2004, respectively                    14,337,562     15,017,503
                                                  -----------    -----------
      Total Partners' Capital                     14,364,282     15,051,091
                                                  -----------    -----------
        Total Liabilities and Partners' Capital  $15,416,668    $15,791,944
                                                  ===========    ===========

 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 JUNE 30

                           (Unaudited)

                                Three Months Ended        Six Months Ended
                               6/30/05      6/30/04     6/30/05      6/30/04

RENTAL INCOME                $  378,004   $  358,093   $  755,971  $  636,372

EXPENSES:
   Partnership Administration -
     Affiliates                  53,065       55,057      107,716     104,378
   Partnership Administration
     and Property Management -
     Unrelated Parties           10,420        9,560       23,154      19,281
   Depreciation                  84,222       75,692      168,444     135,184
                              ----------   ----------   ----------  ----------
        Total Expenses          147,707      140,309      299,314     258,843
                              ----------   ----------   ----------  ----------

OPERATING INCOME                230,297      217,784      456,657     377,529

OTHER INCOME:
   Interest Income                9,153        6,328       13,320      20,250
                              ----------   ----------   ----------  ----------
INCOME FROM CONTINUING
   OPERATIONS                   239,450      224,112      469,977     397,779

Income from Discontinued
  Operations                    126,908       72,481      238,935   1,379,505
                              ----------   ----------   ----------  ----------
NET INCOME                   $  366,358   $  296,593   $  708,912  $1,777,284
                              ==========   ==========   ==========  ==========
NET INCOME ALLOCATED:
   General Partners          $    3,664   $    2,966   $    7,089  $   17,773
   Limited Partners             362,694      293,627      701,823   1,759,511
                              ----------   ----------   ----------  ----------
                             $  366,358   $  296,593   $  708,912  $1,777,284
                              ==========   ==========   ==========  ==========
INCOME PER LIMITED PARTNERSHIP UNIT:
   Continuing Operations     $    12.35   $    11.42   $    24.20  $    20.26
   Discontinued Operations         6.54         3.69        12.30       70.25
                              ----------   ----------   ----------  ----------
        Total                $    18.89   $    15.11   $    36.50  $    90.51
                              ==========   ==========   ==========  ==========
Weighted Average Units
  Outstanding                    19,198       19,430       19,228      19,439
                              ==========   ==========   ==========  ==========

 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 SIX-MONTH PERIODS ENDED JUNE 30

                           (Unaudited)

                                                       2005          2004
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income                                     $   708,912   $ 1,777,284

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                      168,444       135,702
     Gain on Sale of Real Estate                      (110,706)   (1,223,369)
     (Increase) Decrease in Receivables                 44,454       (44,454)
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                        6,116          (235)
     Increase in Unearned Rent                         104,138        77,242
                                                    -----------   -----------
        Total Adjustments                              212,446    (1,055,114)
                                                    -----------   -----------
        Net Cash Provided By
           Operating Activities                        921,358       722,170
                                                    -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                                0    (5,908,258)
   Proceeds from Sale of Real Estate                   758,229     2,131,025
                                                    -----------   -----------
        Net Cash Provided By (Used For)
           Investing Activities                        758,229    (3,777,233)
                                                    -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase (Decrease> in Distributions Payable        201,279      (854,716)
   Distributions to Partners                        (1,261,789)     (708,271)
   Redemption Payments                                (133,932)      (81,323)
                                                    -----------   -----------
        Net Cash Used For
           Financing  Activities                    (1,194,442)   (1,644,310)
                                                    -----------   -----------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                485,145    (4,699,373)

CASH AND CASH EQUIVALENTS, beginning of period       1,122,394     5,776,605
                                                    -----------   -----------
CASH AND CASH EQUIVALENTS, end of period           $ 1,607,539   $ 1,077,232
                                                    ===========   ===========

 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 JUNE 30

                           (Unaudited)


                                                                   Limited
                                                                  Partnership
                             General     Limited                    Units
                             Partners    Partners      Total     Outstanding


BALANCE, December 31, 2003  $ 28,251   $14,489,094   $14,517,345   19,522.58

  Distributions               (7,083)     (701,188)     (708,271)

  Redemption Payments           (813)      (80,510)      (81,323)     (92.70)

  Net Income                  17,773     1,759,511     1,777,284
                             --------   -----------   -----------  ----------
BALANCE, June 30, 2004      $ 38,128   $15,466,907   $15,505,035   19,429.88
                             ========   ===========   ============ ==========


BALANCE, December 31, 2004  $ 33,588   $15,017,503   $15,051,091   19,344.38

  Distributions              (12,618)   (1,249,171)   (1,261,789)

  Redemption Payments         (1,339)     (132,593)     (133,932)    (146.75)

  Net Income                   7,089       701,823       708,912
                             --------   -----------   -----------  ----------
BALANCE, June 30, 2005      $ 26,720   $14,337,562   $14,364,282   19,197.63
                             ========   ===========   ===========  ==========

 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
                          JUNE 30, 2005

                           (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.  Robert P. Johnson, the President and  sole
     director  of AFM, serves as the Individual General  Partner.
     AFM  is a wholly owned subsidiary of AEI Capital Corporation
     of  which Mr. Johnson is the majority shareholder.  AEI Fund
     Management,  Inc. (AEI), an affiliate of AFM,  performs  the
     administrative and operating functions for the Partnership.

     The   terms   of  the  Partnership  offering  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  offering   terminated
     December  4, 1990 when the extended offering period expired.
     The Partnership received subscriptions for 22,783.05 Limited
     Partnership   Units.   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 operations, any Net Cash Flow, as defined, which  the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum. Distributions to Limited Partners will  be  made
     pro rata by Units.


         AEI 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 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 l% 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  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 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 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)  Reclassification -

     Certain items in the prior year's financial statements  have
     been  reclassified  to conform to 2005 presentation.   These
     reclassifications  had no effect on Partners'  capital,  net
     income or cash flows.

(4)  Investments in Real Estate -

     On  February  5,  2004,  the  Partnership  purchased  a  50%
     interest in a Jared Jewelry store in Lakewood, Colorado  for
     $2,017,633.   The  property is leased to  Sterling  Jewelers
     Inc. under a Lease Agreement with a primary term of 20 years
     and  annual  rental  payments of  $155,219.   The  remaining
     interest  in  the property was purchased by  AEI  Net  Lease
     Income  &  Growth Fund XIX Limited Partnership, an affiliate
     of the Partnership.

     On  April 30, 2004, the Partnership purchased a 50% interest
     in  an  Applebee's restaurant in Stow, Ohio for  $1,575,755.
     The  property  is  leased to Apple Ohio LLC  under  a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments  of  $120,043.   The  remaining  interest  in   the
     property was purchased by AEI Net Lease Income & Growth Fund
     XIX Limited Partnership.

     On May 10, 2004, the Partnership purchased a 50% interest in
     an  Eckerd  drug  store in Auburn, New York for  $2,287,133.
     The  property is leased to Eckerd Corporation under a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments  of  $184,753.   The  remaining  interest  in   the
     property was purchased by AEI Net Lease Income & Growth Fund
     XIX Limited Partnership.

     In February 2004, Garden Ridge, L.P. (GR), the lessee of the
     Garden  Ridge  retail store in Woodlands, Texas,  filed  for
     Chapter 11 bankruptcy reorganization.  In press releases, GR
     reported rejecting the leases of 9 of 44 stores and that  it
     was  attempting  to renegotiate lease terms  for  its  other
     stores.   The Woodlands store was not identified as  one  of
     the  nine  to be closed.  GR entered into negotiations  with
     the  property owners of the Woodlands store to arrive at  an
     agreement  to  modify rental terms that would induce  GR  to
     affirm  the  Lease for this property.  GR and  the  property
     owners  subsequently agreed to a lease amendment  to  reduce
     the  annual rent by 23%, with a 10% rent increase on January
     1,  2008.  The Partnership's share of the new rental  amount
     is  $175,968.  The amendment provides for additional  rental
     payments if the store's sales exceed certain stated amounts.
     The  amendment also calls for the owners to waive  rent  for
     one   month  during  the  first  six  months  following  the
     bankruptcy  court's  approval of  GR's  affirmation  of  the
     Lease.   With  the exception of February 2004, GR  made  all
     rental payments due under its original lease.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(4)  Investments in Real Estate - (Continued)

     On  April 28, 2005, the bankruptcy court approved GR's  Plan
     of  Reorganization.  As part of the Plan, the lease for  the
     Woodlands  store was affirmed by GR and the lease  amendment
     became  effective.  Pursuant to the amendment,  GR  selected
     July  2005  as  the one month to have rent waived.   In  May
     2005,  GR  paid the rent due for February 2004 and, pursuant
     to  the  amendment, GR is entitled to credit an equal amount
     against any installment of rent due in the future.   GR  has
     notified  the Partnership it will apply the credit  for  the
     February  rent  against rent due for  August  and  September
     2005.   As of the date of this report, GR has complied  with
     all Lease terms as amended.

(5)  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.

(6)  Discontinued Operations -

     In  October 2003, the Partnership entered into an  agreement
     to  sell  the  Cheddar's restaurant in  Clive,  Iowa  to  an
     unrelated third party.  On January 6, 2004, the sale  closed
     with   the  Partnership  receiving  net  sale  proceeds   of
     $2,131,025, which resulted in a net gain of $1,223,369.   At
     December  31,  2003,  the property was  classified  as  Real
     Estate Held for Sale with a book value of $907,656.

     In  July  2003,  the  lessee of the Razzoo's  restaurant  in
     Alpharetta,  Georgia notified the Partnership  that  it  was
     experiencing financial difficulty stemming from  lower  than
     expected  sales and that it might not be able to pay  future
     rents.   In late 2003, the lessee closed the restaurant  and
     said  that it no longer intended to operate a restaurant  at
     the  site.  The Partnership and the lessee entered  into  an
     agreement,  effective  November 1, 2004,  to  terminate  the
     lease   and  return  possession  of  the  property  to   the
     Partnership.   Rents  were  current  through  the  date   of
     termination.  As part of the agreement, the Partnership  was
     reimbursed for certain expenses it incurred related to legal
     action  it  pursued in connection with this situation.   The
     Partnership listed the property for sale with a real  estate
     broker  in  the  Alpharetta area.  While  the  property  was
     vacant,  the  Partnership was responsible  for  real  estate
     taxes and other costs required to maintain the property.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(6)  Discontinued Operations - (Continued)

     Based  on an analysis of market conditions in the area,  the
     Partnership   determined  the  property  was   impaired   in
     accordance  with the requirements of Statement of  Financial
     Accounting  Standards No. 144, Accounting for the Impairment
     or  Disposal  of  Long-Lived Assets.  As a  result,  in  the
     fourth  quarter of 2003, a charge to discontinued operations
     for real estate impairment of $252,399 was recognized, which
     was  the  difference between the book value at December  31,
     2003  of  $852,399 and the estimated fair value of $600,000.
     The  charge  was  recorded against the  cost  of  the  land,
     building  and equipment.  At December 31, 2004, the property
     was classified as Real Estate Held for Sale.

     In  December 2004, the Partnership entered into an agreement
     to  sell  the  property in Alpharetta to an unrelated  third
     party.   On  March  29,  2005,  the  sale  closed  with  the
     Partnership  receiving net sale proceeds of $648,425,  which
     resulted in a net gain of $48,425.

     On  May  31, 2005, the Partnership sold its 5.8291% interest
     in  the  Applebee's  restaurant in Destin,  Florida  to  the
     lessee.   The  Partnership received  net  sale  proceeds  of
     $109,804, which resulted in a net gain of $62,281.  The cost
     and  related  accumulated depreciation of the interest  sold
     was $65,215 and $17,692, respectively.

     In  May  2003, the Partnership entered into an agreement  to
     sell  a Taco Cabana restaurant in San Antonio, Texas to  the
     lessee.   The agreement has been extended several  times  to
     enable  the  lessee  to  complete their  due  diligence  and
     certain negotiations with adjacent land owners.  The sale is
     subject to contingencies and may not be completed.   If  the
     sale  is  completed, the Partnership expects to receive  net
     proceeds of approximately $1,637,000, which will result in a
     net  gain  of approximately $479,000.  If this sale  is  not
     completed,  it is likely the Partnership will  seek  another
     buyer  for  the property and may not be able to negotiate  a
     similar  purchase agreement.  At June 30, 2005 and  December
     31,  2004,  the property was classified as Real Estate  Held
     for Sale with a book value of $1,157,654.  During this time,
     the  lessee is continuing to pay rent and is complying  with
     the lease obligations.

     During   the  first  six  months  of  2005  and  2004,   the
     Partnership  distributed $608,886 and $102,244 of  net  sale
     proceeds  to  the Limited and General Partners  as  part  of
     their quarterly distributions, which represented a return of
     capital  of  $31.39 and $5.20 per Limited Partnership  Unit,
     respectively.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(6)  Discontinued Operations - (Continued)

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the periods ended June 30:

                              Three Months Ended       Six Months Ended
                             6/30/05      6/30/04     6/30/05     6/30/04

Rental Income                $  65,006  $  86,107   $ 130,923  $  175,257
Property Management Expenses      (379)   (13,367)     (2,694)    (18,603)
Depreciation                         0       (259)          0        (518)
Gain on Disposal of Real Estate 62,281          0     110,706   1,223,369
                              ---------  ---------   ---------  ----------
   Income from Discontinued
     Operations              $ 126,908  $  72,481   $ 238,935  $1,379,505
                              =======    =========   =========  ==========

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        The 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:

    Market  and  economic conditions which affect the  value
    of  the  properties the Partnership owns and  the  cash
    from rental income such properties generate;

    the  federal  income tax consequences of rental  income,
    deductions,  gain  on  sales and other  items  and  the
    affects of these consequences for the Partners;

    resolution  by  the General Partners of  conflicts  with
    which they may be confronted;

    the   success   of  the  General  Partners   of   locating
    properties with favorable risk return characteristics;

    the effect of tenant defaults; and

    the  condition of the industries in which the  tenants  of
    properties owned by the Partnership operate.

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

The Application of Critical Accounting Policies

        The preparation of the Partnership's financial statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses  to  the  Partnership as opposed  to  other  funds  they
manage.

        The Partnership purchases properties and records them  in
the  financial  statements  at the lower  of  cost  or  estimated
realizable   value.   The  Partnership  initially   records   the
properties  at cost (including capitalized acquisition expenses).
The Partnership is required to periodically evaluate the carrying
value  of properties to determine whether their realizable  value
has  declined.   For  properties the Partnership  will  hold  and
operate, management determines whether impairment has occurred by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.

       AEI Fund Management Inc. allocates expenses to each of the
funds  they manage primarily on the basis of the number of  hours
devoted  by  their employees to each fund's affairs.   They  also
allocate  expenses at the end of each month that are not directly
related to a fund's operations based upon the number of investors
in the fund and the fund's capitalization relative to other funds
they  manage.  The Partnership reimburses these expenses  subject
to detailed limitations contained in the Partnership Agreement.

         Management   of  the  Partnership  has   discussed   the
development  and selection of the above accounting estimates  and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.

Results of Operations

        For  the  six  months ended June 30, 2005 and  2004,  the
Partnership  recognized rental income from continuing  operations
of  $755,971 and $636,372, respectively.  In 2005, rental  income
increased  due  to additional rent received from  three  property
acquisitions in 2004 and rent increases on five properties.

        For  the  six  months ended June 30, 2005 and  2004,  the
Partnership  incurred  Partnership administration  expenses  from
affiliated parties of $107,716 and $104,378, 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  $23,154 and $19,281, respectively.   These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct  administrative costs, outside audit costs,  taxes,
insurance and other property costs.


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

        In February 2004, Garden Ridge, L.P. (GR), the lessee  of
the  Garden  Ridge  retail store in Woodlands, Texas,  filed  for
Chapter  11  bankruptcy reorganization.  In  press  releases,  GR
reported rejecting the leases of 9 of 44 stores and that  it  was
attempting to renegotiate lease terms for its other stores.   The
Woodlands  store  was not identified as one of  the  nine  to  be
closed.  GR entered into negotiations with the property owners of
the  Woodlands  store to arrive at an agreement to modify  rental
terms that would induce GR to affirm the Lease for this property.
GR  and  the  property  owners subsequently  agreed  to  a  lease
amendment  to  reduce the annual rent by 23%,  with  a  10%  rent
increase on January 1, 2008.  The Partnership's share of the  new
rental amount is $175,968.  The amendment provides for additional
rental  payments  if  the  store's sales  exceed  certain  stated
amounts.   The amendment also calls for the owners to waive  rent
for   one  month  during  the  first  six  months  following  the
bankruptcy  court's approval of GR's affirmation  of  the  Lease.
With  the exception of February 2004, GR made all rental payments
due under its original lease.

       On April 28, 2005, the bankruptcy court approved GR's Plan
of  Reorganization.   As  part of the Plan,  the  lease  for  the
Woodlands store was affirmed by GR and the lease amendment became
effective.  Pursuant to the amendment, GR selected July  2005  as
the one month to have rent waived.  In May 2005, GR paid the rent
due  for  February  2004 and, pursuant to the  amendment,  GR  is
entitled  to  credit an equal amount against any  installment  of
rent  due in the future.  GR has notified the Partnership it will
apply  the  credit  for the February rent against  rent  due  for
August and September 2005.  As of the date of this report, GR has
complied with all Lease terms as amended.

        For  the  six  months ended June 30, 2005 and  2004,  the
Partnership  recognized interest income of $13,320  and  $20,250,
respectively.   In  2005, interest income decreased  due  to  the
Partnership having less money invested in a money market  account
due to property acquisitions.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Partnership  includes  the operating  results  and  sale  of  the
property   in   discontinued  operations.    In   addition,   the
Partnership reclassifies the prior periods operating results  and
any  partial  sales  of the property to discontinued  operations.
For   the  six  months  ended  June  30,  2005,  the  Partnership
recognized  income  from  discontinued  operations  of  $238,935,
representing rental income less property management expenses  and
depreciation of $128,229 and gain on disposal of real  estate  of
$110,706.    For  the  six  months  ended  June  30,  2004,   the
Partnership  recognized  income from discontinued  operations  of
$1,379,505,  representing rental income less property  management
expenses  of  $156,136 and gain on disposal  of  real  estate  of
$1,223,369.

       In October 2003, the Partnership entered into an agreement
to  sell  the Cheddar's restaurant in Clive, Iowa to an unrelated
third  party.   On  January 6, 2004, the  sale  closed  with  the
Partnership  receiving  net sale proceeds  of  $2,131,025,  which
resulted in a net gain of $1,223,369.  At December 31, 2003,  the
property was classified as Real Estate Held for Sale with a  book
value of $907,656.

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

        In  July  2003, the lessee of the Razzoo's restaurant  in
Alpharetta,  Georgia  notified  the  Partnership  that   it   was
experiencing  financial  difficulty  stemming  from  lower   than
expected sales and that it might not be able to pay future rents.
In  late 2003, the lessee closed the restaurant and said that  it
no  longer  intended to operate a restaurant at  the  site.   The
Partnership  and the lessee entered into an agreement,  effective
November 1, 2004, to terminate the lease and return possession of
the  property to the Partnership.  Rents were current through the
date  of  termination.  As part of the agreement, the Partnership
was  reimbursed for certain expenses it incurred related to legal
action  it  pursued in connection with this situation.  Following
an  analysis  of the lessee's business at this location  and  its
financial condition, and its intent to no longer operate at  this
site,  the Partnership determined that the best course of  action
was to negotiate a settlement with the lessee and take possession
of   the   property.   With  possession  of  the  property,   the
Partnership  could  move forward with selling  the  property  and
reinvesting  the  proceeds from the sale in  replacement  income-
producing property.  The Partnership listed the property for sale
with  a  real  estate broker in the Alpharetta area.   While  the
property  was  vacant, the Partnership was responsible  for  real
estate taxes and other costs required to maintain the property.

       Based on an analysis of market conditions in the area, the
Partnership  determined the property was impaired  in  accordance
with  the  requirements  of  Statement  of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived Assets.  As a result, in the fourth quarter of 2003, a
charge  to discontinued operations for real estate impairment  of
$252,399  was  recognized, which was the difference  between  the
book  value  at  December 31, 2003 of $852,399 and the  estimated
fair value of $600,000.  The charge was recorded against the cost
of  the land, building and equipment.  At December 31, 2004,  the
property was classified as Real Estate Held for Sale.

         In  December  2004,  the  Partnership  entered  into  an
agreement  to  sell the property in Alpharetta  to  an  unrelated
third  party.   On  March  29, 2005, the  sale  closed  with  the
Partnership  receiving  net  sale  proceeds  of  $648,425,  which
resulted in a net gain of $48,425.

       On May 31, 2005, the Partnership sold its 5.8291% interest
in  the  Applebee's restaurant in Destin, Florida to the  lessee.
The  Partnership  received net sale proceeds of  $109,804,  which
resulted  in  a  net  gain  of $62,281.   The  cost  and  related
accumulated  depreciation of the interest sold  was  $65,215  and
$17,692, respectively.

        In May 2003, the Partnership entered into an agreement to
sell  a  Taco  Cabana  restaurant in San Antonio,  Texas  to  the
lessee.  The agreement has been extended several times to  enable
the   lessee   to  complete  their  due  diligence  and   certain
negotiations with adjacent land owners.  The sale is  subject  to
contingencies  and  may  not  be  completed.   If  the  sale   is
completed,  the  Partnership expects to receive net  proceeds  of
approximately  $1,637,000, which will result in  a  net  gain  of
approximately  $479,000.  If this sale is not  completed,  it  is
likely  the Partnership will seek another buyer for the  property
and  may  not be able to negotiate a similar purchase  agreement.
At  June  30,  2005  and  December 31,  2004,  the  property  was
classified  as  Real Estate Held for Sale with a  book  value  of
$1,157,654.   During this time, the lessee is continuing  to  pay
rent and is complying with the lease obligations.

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

        In the second quarter of 2005, the Partnership decided to
discontinue the reinvestment of proceeds from property  sales  in
additional  properties  and  to take  the  initial  steps  toward
liquidating  the  Partnership.  As a  result,  the  Partnership's
rental income and operating income will decrease in the future as
the  Partnership sells its remaining properties.  It is too early
to estimate when the liquidation process will be completed.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   In addition, leases may contain  rent  clauses
which  entitle  the  Partnership to receive  additional  rent  in
future  years  if gross receipts for the property exceed  certain
specified  amounts.  Increases in sales volumes of  the  tenants,
due to inflation and real sales growth, may result in an increase
in rental income over the term of the leases.  Inflation also may
cause the real estate to appreciate in value.  However, inflation
and  changing prices may have an adverse impact on the  operating
margins  of  the  properties' tenants, which could  impair  their
ability  to  pay rent and subsequently reduce the Net  Cash  Flow
available for distributions.

Liquidity and Capital Resources

         During   the  six  months  ended  June  30,  2005,   the
Partnership's  cash balances increased $485,145 as  a  result  of
cash  generated  from the sale of property, which  was  partially
offset  by distributions paid to the Partners in excess  of  cash
generated from operating activities.  During the six months ended
June   30,   2004,  the  Partnership's  cash  balances  decreased
$4,699,373  as  a  result of cash used to purchase  property  and
distributions  paid to the Partners in excess of  cash  generated
from  operating activities, which were partially offset  by  cash
generated from the sale of property.

        Net  cash provided by operating activities increased from
$722,170  in 2004 to $921,358 in 2005 as a result of an  increase
in  total  rental  and  interest income in 2005,  a  decrease  in
Partnership  administration and property management  expenses  in
2005  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 six months ended  June
30,  2005 and 2004, the Partnership generated cash flow from  the
sale  of  real  estate of $758,229 and $2,131,025,  respectively.
During  the  six  months  ended June 30,  2004,  the  Partnership
expended  $5,908,258 to invest in real properties  (inclusive  of
acquisition   expenses)  as  the  Partnership   reinvested   cash
generated from property sales.

        On  February  5,  2004, the Partnership purchased  a  50%
interest  in  a  Jared  Jewelry store in Lakewood,  Colorado  for
$2,017,633.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental payments of $155,219.  The remaining  interest  in
the  property was purchased by AEI Net Lease Income & Growth Fund
XIX Limited Partnership, an affiliate of the Partnership.

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

        On  April  30,  2004,  the Partnership  purchased  a  50%
interest   in  an  Applebee's  restaurant  in  Stow,   Ohio   for
$1,575,755.   The property is leased to Apple Ohio  LLC  under  a
Lease Agreement with a primary term of 20 years and annual rental
payments of $120,043.  The remaining interest in the property was
purchased  by  AEI  Net Lease Income & Growth  Fund  XIX  Limited
Partnership.

        On May 10, 2004, the Partnership purchased a 50% interest
in  an Eckerd drug store in Auburn, New York for $2,287,133.  The
property  is leased to Eckerd Corporation under a Lease Agreement
with  a  primary term of 20 years and annual rental  payments  of
$184,753.   The remaining interest in the property was  purchased
by AEI Net Lease Income & Growth Fund XIX Limited Partnership.

        The  Partnership's primary use of cash flow,  other  than
investment   in  real  estate,  is  distribution  and  redemption
payments  to  Partners.   The Partnership  declares  its  regular
quarterly distributions before the end of each quarter  and  pays
the distribution in the first week after the end of each quarter.
The  Partnership attempts to maintain a stable distribution  rate
from  quarter  to  quarter.   Redemption  payments  are  paid  to
redeeming Partners on a quarterly basis.

        For  the  six  months ended June 30, 2005 and  2004,  the
Partnership  declared distributions of $1,261,789  and  $708,271,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions of $1,249,171 and $701,188 and the General Partners
received  distributions of $12,618 and $7,083  for  the  periods,
respectively.   In  December  2004, the  Partnership  declared  a
special  distribution of $303,030 of net sale proceeds.  In  June
2005, the Partnership declared a special distribution of $505,051
of  net sale proceeds, which resulted in higher distributions  in
2005 and a higher distribution payable at June 30, 2005.

        During  the  first  six  months of  2005  and  2004,  the
Partnership  distributed  $608,886  and  $102,244  of  net   sale
proceeds  to  the Limited and General Partners as part  of  their
quarterly distributions, which represented a return of capital of
$31.39 and $5.20 per Limited Partnership Unit, respectively.

        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.

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

        During  the first six months of 2005, 18 Limited Partners
redeemed  a  total of 146.75 Partnership Units  for  $132,593  in
accordance with the Partnership Agreement.  During the first  six
months  of  2004, 11 Limited Partners redeemed a  total  of  92.7
Partnership  Units for $80,510.  The Partnership  acquired  these
Units  using  Net Cash Flow from operations.  In prior  years,  a
total of 245 Limited Partners redeemed 3,260.47 Partnership Units
for  $2,700,638.  The redemptions increase the remaining  Limited
Partners' ownership interest in the Partnership.  As a result  of
these   redemption  payments  and  pursuant  to  the  Partnership
Agreement, the General Partners received distributions of  $1,339
and $813 in 2005 and 2004, respectively.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations on both a short-term and long-term basis.

ITEM 3.   CONTROLS AND PROCEDURES.

       (a) Evaluation of disclosure controls and procedures

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the  Managing  General Partner of the Partnership  evaluated  the
effectiveness  of  the  design and operation  of  its  disclosure
controls  and procedures (as defined in Rule 13a-14(c) under  the
Exchange  Act).   Based upon that evaluation, the  President  and
Chief Financial Officer of the Managing General Partner concluded
that,  as  of  the end of the period covered by this report,  the
disclosure  controls  and  procedures  of  the  Partnership   are
adequately  designed to ensure that information  required  to  be
disclosed  by  us  in  the reports we file or  submit  under  the
Exchange  Act  is recorded, processed, summarized  and  reported,
within the time periods specified in applicable rules and forms.

       (b)  Changes in internal controls

         There   were   no  significant  changes  made   in   the
Partnership's  internal controls during the  most  recent  period
covered  by  this  report that have materially affected,  or  are
reasonably   likely  to  materially  affect,  the   Partnership's
internal control over financial reporting.


                   PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

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

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

        (a)  During  the  period  covered  by  this  report,  the
Partnership  did  not  sell any equity securities  that  are  not
registered under the Securities Act of 1933.

       (b) Not applicable.

                   PART II - OTHER INFORMATION
                           (Continued)

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

        (c) Pursuant to Section 7.7 of the Partnership Agreement,
as  amended, each Limited Partner has the right to present  Units
to  the  Partnership  for purchase by submitting  notice  to  the
Managing  General Partner.  The purchase price of  the  Units  is
equal to 90% of the net asset value of the Units as determined by
the Managing General Partner in accordance with the provisions of
the Partnership Agreement.  Units tendered to the Partnership are
redeemed  at  the purchase price established for the  quarter  in
which the Partnership received a notice at least 60 days prior to
the  repurchase  dates of January 1st, April 1st,  July  1st  and
October   1st   subject  to  the  following   limitations.    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.

      Small Business Issuer Purchases of Equity Securities
                                                             Maximum Number
                                       Total Number of Units of Units that May
                Total Number Average   Purchased as Part of  Yet Be Purchased
                of  Units   Price Paid Publicly Announced    Under the Plans
       Period   Purchased   per Unit   Plans or Programs     or Programs

4/1/05 to 4/30/05   61       $903.87        3,585.42(1)           (2)

5/1/05 to 5/31/05   --         --             --                  --

6/1/05 to 6/30/05   --         --             --                  --

  (1)   The  Partnership's  repurchase plan is  mandated  by  the
        Partnership Agreement as included in the prospectus related to
        the original offering of the Units.

  (2)   The Partnership Agreement contains annual limitations  on
        repurchases  described in the paragraph  above  and  has  no
        expiration date.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5.OTHER INFORMATION

      None.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS

                           Description

    31.1  Certification  of Chief Executive  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2  Certification  of Chief Financial  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    32    Certification  of  Chief Executive  Officer  and  Chief
    Financial Officer of General Partner pursuant to Section  906
    of the Sarbanes-Oxley Act of 2002.



                           SIGNATURES

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


Dated:  August 5, 2005        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/ Patrick W Keene
                                      Patrick W. Keene
                                      Chief Financial Officer
                                      (Principal Accounting Officer)