FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
                     THE SECURITIES EXCHANGE ACT OF 1934
                       QUARTERLY OR TRANSITIONAL REPORT

                 (As last amended by 34-32231, eff. 6/3/93.)

                   U.S. Securities and Exchange Commission
                           Washington, D.C.  20549


                                 FORM 10-QSB

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


              For the quarterly period ended September 30, 1996


[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
      EXCHANGE ACT

                For the transition period.........to.........

                        Commission file number 0-10273


                     CONSOLIDATED CAPITAL PROPERTIES III
      (Exact name of small business issuer as specified in its charter)

       California                                             94-2653686
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                              Identification No.)

One Insignia Financial Plaza, P.O. Box 1089
   Greenville, South Carolina                                   29602
(Address of principal executive offices)                      (Zip Code)


                   Issuer's telephone number (864) 239-1000



Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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

                        PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

a)                   CONSOLIDATED CAPITAL PROPERTIES III

                          CONSOLIDATED BALANCE SHEET
                                 (Unaudited)
                       (in thousands, except unit data)

                              September 30, 1996
<TABLE>
<CAPTION>

<S>                                                  <C>                 <C> 
Assets
  Cash and cash equivalents:
     Unrestricted                                                         $3,730
     Restricted-tenant security deposits                                     114
  Accounts receivable                                                         33
  Escrows for taxes and insurance                                            278
  Other assets                                                               253
  Investment properties:
     Land                                             $ 1,552
     Buildings and related personal property           12,157
                                                       13,709
     Less accumulated depreciation                     (9,028)             4,681

                                                                          $9,089

Liabilities and Partners' Capital (Deficit)

Liabilities
  Accounts payable                                                        $   15
  Tenant security deposits                                                   114
  Accrued taxes                                                              165
  Other liabilities                                                          211
  Mortgage notes payable                                                   4,200

Partners' Capital (Deficit)
  General partner                                     $(1,854)
  Limited partners (158,636 units
   and outstanding)
     issued and outstanding)                            6,238              4,384

                                                                          $9,089
<FN>
          See Accompanying Notes to Consolidated Financial Statements
</TABLE>

b)                   CONSOLIDATED CAPITAL PROPERTIES III

                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)
                       (in thousands, except unit data)
<TABLE>
<CAPTION>
                                   Three Months Ended         Nine Months Ended
                                     September 30,              September 30,
                                    1996        1995          1996         1995
<S>                             <C>         <C>           <C>          <C>
Revenues:
  Rental income                  $ 1,025     $ 1,044       $ 3,171      $ 3,127
  Other income                        93          88           289          373
     Total revenues                1,118       1,132         3,460        3,500
Expenses:
  Operating                          394         462         1,309        1,359
  General and Administrative         112         133           302          527
  Maintenance                        168         184           487          502
  Depreciation                       211         280           672          831
  Interest                           187         296           560          721
  Property Taxes                      71          77           283          253
     Total expenses                1,143       1,432         3,613        4,193

Gain on disposition of property
  (Note F)                         1,820          --         1,820           --

Extraordinary gain on
  foreclosure (Note F)             1,149          --         1,149           --

Net income (loss)                $ 2,944     $  (300)      $ 2,816      $  (693)

Net income (loss) allocated
  to general partners (4%)       $   118     $   (12)      $   113      $   (28)

Net income (loss) allocated
  to limited partners (96%)        2,826        (288)        2,703         (665)

Net income (loss)                $ 2,944     $  (300)      $ 2,816      $  (693)

Net income (loss) per weighted
  average limited
  partnership unit:

  Income (loss) before
    extraordinary item           $ 10.86     $ (1.82)      $ 10.09      $ (4.19)
  Extraordinary gain                6.95          --          6.95           --

  Net income (loss)              $ 17.81     $ (1.82)      $ 17.04      $ (4.19)

<FN>
          See Accompanying Notes to Consolidated Financial Statements
</TABLE>


c)                   CONSOLIDATED CAPITAL PROPERTIES III

       CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                                 (Unaudited)
                       (in thousands, except unit data)
<TABLE>
<CAPTION>
                                    Limited
                                   Partnership     General       Limited
                                      Units        Partner       Partners       Total
<S>                                 <C>           <C>           <C>          <C>
Original capital contributions       158,945       $     1       $79,473      $79,474

Partners' capital (deficit) at
  December 31, 1995                  158,636       $(1,952)      $ 3,900      $ 1,948

Distributions Paid                        --           (15)         (365)        (380)

Net income for the nine months
  ended September 30, 1996                --           113         2,703        2,816

Partners' capital (deficit)
  at September 30, 1996              158,636       $(1,854)      $ 6,238      $ 4,384
<FN>
          See Accompanying Notes to Consolidated Financial Statements
</TABLE>

d)                        CONSOLIDATED CAPITAL PROPERTIES III

                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)
                                    (in thousands)
<TABLE>
<CAPTION>
                                                                   Nine Months Ended
                                                                     September 30,
                                                                   1996         1995
<S>                                                             <C>         <C>
Cash flows from operating activities:
  Net income (loss)                                              $ 2,816     $  (693)
  Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
    Loss on repayment of mortgage notes payable                       --          99
    Gain on disposition of property                               (1,820)         --
    Extraordinary gain on foreclosure                             (1,149)         --
    Depreciation                                                     672         831
    Amortization of discounts, lease commissions
      and loan costs                                                  38          43
    Change in accounts:
      Restricted cash                                                  9          (9)
      Accounts receivable                                             72          41
      Escrows for taxes and insurance                               (201)        (88)
      Other assets                                                   (11)         (8)
      Accounts payable                                              (171)        106
      Tenant security deposits liabilities                            (8)          1
      Accrued taxes                                                  168         154
      Other liabilities                                              127         115

         Net cash provided by operating activities                   542         592

Cash flows from investing activities:
  Property improvements and replacements                            (140)       (176)
  Deposits to restricted escrows                                      --          (7)
  Receipts from restricted escrows                                     7          --
  Purchase of investments                                             --     (15,273)
  Proceeds from sale of investments                                   --      18,292
  Repayment of notes receivable                                       --       2,316

         Net cash (used in) provided by investing
            activities                                              (133)      5,152

Cash flows from financing activities:
  Payments on mortgage notes payable                                 (33)       (167)
  Repayment of mortgage notes payable                             (3,174)     (1,592)
  Proceeds from mortgage notes payable                             4,200          --
  Payment of loan costs                                             (146)         --
  Partners' distributions                                           (380)     (1,428)

         Net cash provided by (used in)
            financing activities                                     467      (3,187)

Net increase in cash and cash equivalents                            876       2,557

Cash and cash equivalents at beginning of period                   2,854       2,090

Cash and cash equivalents at end of period                       $ 3,730     $ 4,647

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $   553     $   530
<FN>
             See Accompanying Notes to Consolidated Financial Statements
</TABLE>
                         CONSOLIDATED CAPITAL PROPERTIES III
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                     (Unaudited)
                                   (in thousands)


SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES

Foreclosure

During the third quarter of 1996, Mountain Plaza Apartments was foreclosed upon
by the lender.  In connection with this foreclosure, the following accounts 
were adjusted by the non-cash amounts noted below.

                                                   1996

   Accounts receivable                           $   (15)

   Other assets                                     (106)

   Investment properties                          (2,364)

   Accrued taxes                                      34

   Other liabilities                                 141

   Mortgage notes payable                          3,459

   Gain on foreclosure of property               $ 1,149

             See Accompanying Notes to Consolidated Financial Statements

e)                      CONSOLIDATED CAPITAL PROPERTIES III

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    (Unaudited)


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties III ("The Partnership") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required 
by generally accepted accounting principles for complete financial statements.  
In the opinion of the Managing General Partner, all adjustments (consisting of 
normal recurring accruals) considered necessary for a fair presentation have 
been included.  Operating results for the three and nine month periods ended 
September 30, 1996, are not necessarily indicative of the results that may be 
expected for the fiscal year ending December 31, 1996.  For further information,
refer to the consolidated financial statements and footnotes thereto included 
in the Partnership's annual report on Form 10-KSB for the fiscal year ended 
December 31, 1995.

Certain reclassifications have been made to the 1995 information to conform to 
the 1996 presentation.

Consolidation

The Partnership's financial statements include the accounts of  ConCap Mountain
Plaza Associates, Ltd. ("Mountain Plaza Associates), CCP III Associates, Ltd.
("CCP III Associates") and ConCap Village Green Associates, Ltd. ("Village Green
Associates"), three wholly-owned limited partnerships.  All intercompany
transactions have been eliminated.

Cash and Cash Equivalents

Cash and cash equivalents for purposes of reporting cash flows include cash on
hand, money market funds and certificates of deposit with original maturities of
three months or less.

NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES

The Partnership has paid property management fees based on collected gross
rental revenues for property management services in each of the nine months
ended September 30, 1996 and 1995.  In late December 1994, an affiliate of the
General Partner assumed day-to-day property management responsibilities for all
of the Partnership's properties.  Property management fees of approximately
$162,000 and $166,000 were paid to affiliates of the General Partner for the
nine months ended September 30, 1996 and 1995, respectively.  These fees are
included in operating expenses.

NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES (CONTINUED)

The Limited Partnership Agreement ("Partnership Agreement") provides for a
special management fee equal to 9% of the total distributions made to the
limited partners from cash flow from operations to be paid to the General
Partner for executive and administrative management services.  Under this
provision of the Partnership Agreement, fees of $32,000 were paid to affiliates
of the General Partner during the nine months ended September 30, 1996.  No fees
were paid or accrued under this provision of the Partnership Agreement during
the nine months ended September 30, 1995.

The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities.  Reimbursements for services of affiliates of
approximately $148,000 and $234,000 were paid to the General Partner and
affiliates for the nine months ended September 30, 1996 and 1995, respectively.
Additionally, the Partnership paid $23,000 and $5,000 during the nine months
ended September 30, 1996 and 1995, respectively, to an affiliate of the General
Partner for lease commissions at the Partnership's commercial property.  These
lease commissions are included in other assets and amortized over the term of
the respective leases.

In July 1995, the Partnership began insuring its properties under a master
policy through an agency and insurer unaffiliated with the General Partner.  An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy.  The current agent
assumed the financial obligations to the affiliate of the General Partner who
receives payment on these obligations from the agent.  The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
General Partner by virtue of the agent's obligations is not significant.

NOTE C - DISTRIBUTIONS

In September of 1996, the General Partner declared and paid distributions
attributable to cash flow from operations, totalling approximately $368,000 to
the partners.

In April of 1996, the Partnership paid state withholding taxes of $12,000 for
non-resident limited partners.  This payment is reflected as a distribution to
the Limited Partners.

In January of 1995, the General Partner declared and paid distributions
representing a return of capital totalling approximately $1.4 million or $9.00
per Unit to the Limited Partners.

NOTE D - REPAYMENT OF NOTE RECEIVABLE

In October of 1988, the Partnership accepted a $2.1 million note receivable in
connection with the sale of the Columns of Castleton Apartments.  The note was
scheduled to mature in June of 1996. In March of 1995, the Partnership received
the outstanding principal balance of approximately $2.3 million, which
represents the original principal balance plus unpaid interest, in settlement of
the borrower's liability under the note agreement.

NOTE E - REFINANCE OF MORTGAGE NOTES PAYABLE

During the second quarter of 1996, the Partnership entered into an interim
financing arrangement for both Ventura Landing and Village Green for $2.2
million and $2 million, respectively.  The previous Ventura Landing note of $3.2
million was repaid at that time.  The interest rate is 250 basis points over the
30-day LIBOR, resulting in a total note rate of 8.00%.  The loans matured on
August 1, 1996, with a 60-day extension option.  The Partnership exercised this
option and extended the maturity of the loans to October 1, 1996.  On September
30, 1996, the Partnership requested and was granted an additional extension of
the maturity of the loans to November 15, 1996.  The Partnership has the option
to convert the interim loans to fixed rate amortizing loans with an interest
rate equal to the Treasury Rate, as defined in the financing agreement, plus
2.15%.  Such converted loans would mature in ten years with monthly payments of
principal and interest based on a schedule which would fully amortize the loans
over a thirty year term. The Partnership is, however, seeking alternative long-
term financing to obtain a lower interest rate.

NOTE F - FORECLOSURE OF MOUNTAIN PLAZA APARTMENTS

On September 3, 1996, the lender foreclosed on Mountain Plaza Apartments.  The
mortgage note payable had been in default since May 13, 1996.  In the Managing
General Partner's opinion, it was not in the Partnership's best interest to
contest the foreclosure action.  During the third quarter of 1996, the
Partnership recorded a gain on disposition of property of $1,820,000, to
increase the carrying value of the Mountain Plaza assets to their estimated
market value and an extraordinary gain on the foreclosure of $1,149,000.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The Partnership's investment properties consist of three apartment complexes and
one commercial property.  The following table sets forth the average occupancy
of the properties for each of the nine months ended September 30, 1996 and 1995:

                                          Average Occupancy
                                          1996         1995

   Professional Plaza Office Building      97%          96%
     Salt Lake City, UT

   Ventura Landing Apartments              95%          91%
     Orlando, FL

   Village Green Apartments                95%          92%
     Altamante Springs, FL

   West Chase Apartments                   93%          90%
     Lexington, KY

The increase in occupancy at the Ventura Landing Apartments is the result of
increased traffic at the property and referrals from current tenants. The
increase in occupancy at the Village Green Apartments resulted from lease
concessions being offered to new tenants.  Concessions were necessary to remain
competitive in the market.  The increase in occupancy at the West Chase
Apartments is the result of a resident retention program with concessions
offered for renewing a twelve month lease.

The Partnership realized net income of $2,816,000 for the nine months ended
September 30, 1996, of which $2,944,000 was net income for the third quarter.
The corresponding net losses for the comparable periods in 1995 were $693,000
and $300,000, respectively.  The increase in net income for both the three and
nine month periods ended September 30, 1996, is primarily due to the foreclosure
of Mountain Plaza Apartments in September of 1996.  This foreclosure resulted in
an extraordinary gain on foreclosure in 1996 of $1,149,000, as well as a gain
recorded to increase the carrying value of the Mountain Plaza assets to their
estimated market value of $1,820,000.

The decrease in other income is attributable to the absence of interest income
from the Columns of Castleton note receivable which was collected in March of
1995.  Depreciation, interest, and general and administrative expenses decreased
for the nine months ended September 30, 1996, compared to the nine months ended
September 30, 1995.  The decrease in depreciation expense is attributable to
many of the assets acquired with the purchase of the partnership now being fully
depreciated and the write-off of the Mountain Plaza assets resulting from the
foreclosure.  Interest expense decreased as a result of the retirement of notes
payable secured by Village Green Apartments and Professional Plaza Office
Building in August 1995.  The interest expense decrease resulting from these
items was partially offset by the refinancing of the Ventura Landing note
payable, a new mortgage note payable secured by Village Green Apartments, and
default interest on the mortgage note payable secured by Mountain Plaza
Apartments which was foreclosed upon during the third quarter of 1996.  General
and administrative expenses decreased for the nine months ended September 30,
1996, compared to the nine months ended September 30, 1995, due to non-recurring
legal, printing and postage costs associated with the Partnership's required
responses to various tender offers during 1995.  The decrease in general and
administrative expenses was also affected by decreased expense reimbursements
related to the combined efforts of the Dallas and Greenville partnership
administration staffs during the transition period in the first quarter of 1995.
The costs related to the transition efforts in 1995 were incurred to minimize
any disruption in the year-end reporting function including the financial
reporting and K-1 preparation and distribution.

The increase in property taxes resulted from the payoff of a 1990 tax liability
of $168,000, of which $68,000 was underaccrued, in order to secure the new note
payable at Village Green Apartments.

As part of the ongoing business plan of the Partnership, the  General Partner
monitors the rental market environment of its investment properties to assess
the feasibility of increasing rents, maintaining or increasing occupancy levels
and protecting the Partnership from increases in expenses.  As part of this
plan, the General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level.  However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.

At September 30, 1996, the Partnership held cash and cash equivalents of
$3,730,000 compared to $4,647,000 at September 30, 1995.  Net cash provided by
operating activities decreased primarily due to increased funding of tax escrow
accounts and the payments of accounts payable on Mountain Plaza.  Net cash used
in investing activities increased due to the final collection of the Columns of
Castleton note receivable in March of 1995 which favorably impacted 1995's cash
flows. In addition, net proceeds from sales of long-term investments were
reduced in 1996 due to the Partnership investing primarily in short-term cash
equivalents. Net cash provided by financing activities increased due to cash
received from the refinancing of the Village Green Apartments and Ventura
Landing Apartments during the second quarter of 1996.

The partners amended the Partnership Agreement in the fourth quarter of 1995 to
modify the requirement that the Partnership maintain reserves equal to at least
5% of invested capital to instead require reserves in an amount deemed
reasonable and prudent by the General Partner.

The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership.  Such assets are currently thought
to be sufficient for any near-term needs of the Partnership.  The mortgage
indebtedness of $4,200,000 matures at various times with balloon payments due at
maturity, at which time the properties will either be refinanced or sold. 
Distribution of approximately $380,000 and $1,428,000 were made to the partners 
during the nine months ended September 30, 1996 and 1995, respectively.  Future 
cash distributions will depend on the levels of net cash generated from 
operations, capital expenditure requirements, property sales and the 
availability of cash reserves.

On January 20, 1995, an affiliate of the General Partner, Insignia CCP III
Acquisition, L.L.C., closed an offer to purchase Units (the "Tender Offer") for
a cash price of $50.00 per Unit to Limited Partners of record as of December 15,
1994.  Approximately 2,260 Limited Partners holding 36,882 Units (23.24% of
total Units) accepted the Tender Offer and sold their Units to Insignia CCP III
Acquisition, L.L.C. effective January 20, 1995, for an aggregate sales price of
approximately $1.8 million.

                           PART II - OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

   (a)  Exhibit 27, Financial Data Schedule, is filed as an exhibit to this 
        report.


   (b)  Reports on Form 8-K

        A Form 8-K dated September 3, 1996, was filed reporting the
        disposition of Mountain Plaza Apartments.

                                    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.



          CONSOLIDATED CAPITAL PROPERTIES III

          By:       CONCAP EQUITIES, INC.
                    General Partner
   

          By:       /s/ Carroll D. Vinson
                    Carroll D. Vinson
                    President

  
          By:       /s/ Robert D. Long, Jr.
                    Vice President/CAO


          Date:     November 5, 1996