UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549


                                 FORM 10-Q




[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

                                      or

[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

        For the transition period from                to               


                           Commission File #0-18431


                      Inland Land Appreciation Fund, L.P.
            (Exact name of registrant as specified in its charter)


         Delaware                                  #36-3544798
(State or other jurisdiction           (I.R.S. Employer Identification Number)
 of incorporation or organization)


2901 Butterfield Road, Oak Brook, Illinois             60521
 (Address of principal executive office)             (Zip Code)


       Registrant's telephone number, including area code:  630-218-8000


                                     N/A                  
                    (Former name, former address and former
                  fiscal year, if changed since last report)


Indicate by  check  mark  whether  the  registrant  (1)  has  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   





                                    -1-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                                Balance Sheets

                   September 30, 1996 and December 31, 1995
                                  (unaudited)

                                    Assets
                                    ------

                                                        1996          1995
                                                        ----          ----
Current assets:
  Cash and cash equivalents (Note 1).............. $    57,845       626,942
  Accounts and accrued interest receivable........      45,773         7,224
  Mortgage loans receivable (Note 5)..............      35,662        73,614
  Other current assets............................       2,741         1,165
                                                   ------------  ------------
    Total current assets..........................     142,021       708,945
                                                   ------------  ------------
Other assets......................................      19,915        19,915
Investments in land and improvements, at cost
  (including acquisition fees paid to Affiliates
  of $1,470,375 and $1,476,810 at September 30, 1996
  and December 31, 1995, respectively) (Notes 1,
  2 and 3)........................................  26,094,303    24,846,973
                                                   ------------  ------------
Total assets...................................... $26,256,239    25,575,833
                                                   ============  ============


























                See accompanying notes to financial statements.


                                    -2-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                   September 30, 1996 and December 31, 1995
                                  (unaudited)

                       Liabilities and Partners' Capital
                       ---------------------------------

                                                        1996          1995
                                                        ----          ----
Current liabilities:
  Accounts payable................................ $    73,137       131,772
  Accrued real estate taxes.......................      35,967        47,733
  Due to Affiliates (Notes 2 and 6))..............      89,775        13,855
  Notes payable to Affiliate (Note 6).............     752,158          -
  Unearned income.................................       4,720        20,707
  Current portion of deferred gain on sale........       8,619        14,926
                                                   ------------  ------------
Total current liabilities.........................     964,376       228,993
                                                   ------------  ------------
Partners' capital (Notes 1 and 2):
  General Partner:
    Capital contribution..........................         500           500
    Cumulative net income.........................     167,941       168,497
    Cumulative cash distributions.................    (153,743)     (153,743)
                                                   ------------  ------------
                                                        14,698        15,254
                                                   ------------  ------------
  Limited Partners:
    Units of $1,000. Authorized 30,001 Units,
      29,705.25 and 29,792.25 Units outstanding at
      September 30, 1996 and December 31, 1995,
      respectively (net of offering costs
      of $3,768,113, of which $1,069,764 was
      paid to Affiliates).........................  25,965,871    26,040,820
    Cumulative net income.........................   3,457,689     3,437,161
    Cumulative cash distributions.................  (4,146,395)   (4,146,395)
                                                   ------------  ------------
                                                    25,277,165    25,331,586
                                                   ------------  ------------
    Total Partners' capital.......................  25,291,863    25,346,840
                                                   ------------  ------------
Total liabilities and Partners' capital........... $26,256,239    25,575,833
                                                   ============  ============










                See accompanying notes to financial statements.


                                    -3-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                           Statements of Operations

        For the three and nine months ended September 30, 1996 and 1995
                                  (unaudited)


                                        Three months           Nine months
                                           ended                 ended
                                        September 30,         September 30,
                                        -------------         -------------
                                       1996       1995        1996      1995
                                       ----       ----        ----      ----
Income:
  Sale of investments in land
    (Notes 1 and 3)................ $ 159,624    542,440    218,741    681,567
  Rental income (Note 4)...........    82,944     68,069    175,841    191,371
  Interest income..................     1,738     20,319     10,235     58,387
  Other income.....................       149       -           179       -
                                    ---------- ---------- ---------- ----------
                                      244,455    630,828    404,996    931,325
                                    ---------- ---------- ---------- ----------
Expenses:
  Cost of investments in land sold.   120,389    231,338    143,174    329,165
  Professional services to
    Affiliates.....................    13,149      9,767     26,713     22,900
  Professional services to
    non-affiliates.................       789        455     28,253     25,018
  General and administrative
    expenses to Affiliates.........    11,636      7,683     25,098     22,274
  General and administrative
    expenses to non-affiliates.....     2,852      5,733     13,649     16,123
  Marketing expenses to Affiliates.    16,541     17,008     43,593     59,667
  Marketing expenses to
    non-affiliates.................     3,079     10,544     21,640     20,921
  Land operating expenses to
    Affiliates.....................    13,781     14,301     42,708     43,162
  Land operating expenses to
    non-affiliates.................    16,473     12,064     40,196     46,234
                                    ---------- ---------- ---------- ----------
                                      198,689    308,893    385,024    585,464
                                    ---------- ---------- ---------- ----------
  Net income....................... $  45,766    321,935     19,972    345,861
                                    ========== ========== ========== ==========











                See accompanying notes to financial statements.


                                    -4-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                           Statements of Operations
                                  (continued)

        For the three and nine months ended September 30, 1996 and 1995
                                  (unaudited)


                                        Three months           Nine months
                                           ended                 ended
                                        September 30,         September 30,
                                        -------------         -------------
                                       1996       1995        1996      1995
                                       ----       ----        ----      ----
Net income (loss) allocated to:
  General Partner.................. $      65        109       (556)       (65)
  Limited Partners.................    45,701    321,826     20,528    345,926
                                    ---------- ---------- ---------- ----------
    Net income..................... $  45,766    321,935     19,972    345,861
                                    ========== ========== ========== ==========

Net income (loss) allocated to the
  one General Partner Unit......... $      65        109       (556)       (65)
                                    ========== ========== ========== ==========

Net income allocated to Limited
  Partners per weighted average
  Limited Partnership Units (29,713
  and 29,801 for the three months
  ended September 30, 1996 and 1995,
  and 29,760 and 29,806 for the
  nine months ended September 30,
  1996 and 1995, respectively)..... $    1.54      10.80        .69      11.61
                                    ========== ========== ========== ==========




















                See accompanying notes to financial statements.


                                    -5-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

             For the nine months ended September 30, 1996 and 1995
                                  (unaudited)



                                                        1996          1995
                                                        ----          ----
Cash flows from operating activities:
  Net income...................................... $    19,972       345,861
  Adjustments to reconcile net income to net
      cash used in operating activities:
    Gain on sale of investments in land...........     (75,567)     (352,402)
    Changes in assets and liabilities:
      Accounts and accrued interest receivable....     (38,549)      (37,402)
      Other current assets........................      (1,576)       (2,715)
      Accounts payable............................     (58,635)        2,321
      Accrued real estate taxes..................      (11,766)       (7,229)
      Due to Affiliates...........................      75,920         6,477 
      Unearned income.............................     (15,987)      (19,808)
                                                   ------------  ------------

Net cash used in operating activities.............    (106,188)      (64,897)
                                                   ------------  ------------
Cash flows from investing activities:
  Additions to investments in land................  (1,390,504)     (757,362)
  Notes payable to Affiliate......................     752,158          -
  Principal payments collected on mortgage
    loans receivable..............................      37,952          -
  Proceeds from disposition of land investments...     212,434       681,567
                                                   ------------  ------------
Net cash used in investing activities.............    (387,960)      (75,795)
                                                   ------------  ------------
Cash flows from financing activities:
  Distributions...................................        -         (368,325)
  Repurchase of Limited Partnership Units.........     (74,949)      (12,347)
                                                   ------------  ------------
Net cash used in financing activities.............     (74,949)     (380,672)
                                                   ------------  ------------
Net decrease in cash and cash equivalents........     (569,097)     (521,364)
Cash and cash equivalents at beginning of period..     626,942     1,267,942
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $    57,845       746,578 
                                                   ============  ============










                See accompanying notes to financial statements.


                                    -6-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

                              September 30, 1996
                                  (unaudited)


Readers of this  Quarterly  Report  should  refer  to the Partnership's audited
financial statements for the  fiscal  year  ended  December 31, 1995, which are
included  in  the  Partnership's  1995   Annual  Report,  as  certain  footnote
disclosures which would  duplicate  those  contained  in such audited financial
statements have been omitted from this Report.

(1)  Organization and Basis of Accounting

Inland Land  Appreciation  Fund,  L.P.  (the  "Partnership")  was  organized on
October 23, 1987 by the filing  of  a Certificate of Limited Partnership, which
was restated on August 25, 1988,  under the Revised Uniform Limited Partnership
Act of the State of Delaware.    On October 12, 1988, the Partnership commenced
an Offering of 10,000 (subject to increase to 30,000) Limited Partnership Units
pursuant to a Registration  under  the  Securities  Act  of 1933.  The Offering
terminated on October 6, 1989, with  total  sales of 30,000 Units at $1,000 per
Unit, resulting in $30,000,000  in  gross  offering proceeds, not including the
General  Partner's  contribution  of  $500  or  the  Initial  Limited Partner's
contribution of $1,000.  All of  the  holders of these Units have been admitted
to the Partnership.  As of September 30, 1996, the  Partnership has repurchased
a total of 295.75 Units for  $267,018 from various Limited Partners through the
Unit Repurchase Program.  Under this program Limited Partners may under certain
circumstances have  their  Units  repurchased  for  an  amount  equal  to their
Invested Capital. Inland  Real  Estate  Investment  Corporation  is the General
Partner.

The preparation of financial  statements  in conformity with generally accepted
accounting principles requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets  and liabilities and disclosure of
contingent assets and liabilities at  the  date of the financial statements and
the reported amounts of  revenues  and  expenses  during the reporting periods.
Actual results could differ from those estimates.

Offering costs have been offset against the Limited Partners' capital accounts.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or  less  to  be  cash  equivalents and are carried at
cost, which approximates fair value  because  of the relative short maturity of
these instruments.

Investments in land  held  by  the  Partnership  are  carried  at  the lower of
aggregate cost or net realizable  value.  Periodically, the Partnership reviews
the portfolio and if management  determines that parcels suffered an impairment
in value which is deemed to be  other than temporary, the carrying value of the
parcels would be reduced to their  net realizable value.  Through September 30,
1996, there were no such impairments.




                                    -7-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (unaudited)



Except as described in footnote (b) to Note (3) of these notes, the Partnership
uses the area method of allocation, which approximates relative sales method of
allocation, whereby a per acre price  is used as the standard allocation method
for land purchases and sales.  The total cost of parcel is divided by the total
number of acres to arrive at a per acre price.

The fair value of  the  mortgage  loans  receivable approximates their carrying
value due to their short term to maturity.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the partners rather than the Partnership.

Statement of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment of Long-Lived Assets to Be Disposed Of" was issued in March 1995 and
is  effective  for  fiscal  years  beginning  after  December  15,  1995.  This
pronouncement is not  expected  to  have  a  material  effect  on the financial
position or results of operations of the Partnership.

In  the  opinion  of  management,  the  financial  statements  contain  all the
adjustments necessary, which  are  of  a  normal  recurring  nature, to present
fairly the  financial  position  and  results  of  operations  for  the periods
presented herein.  Results of interim periods are not necessarily indicative of
results to be expected for the year.


(2)  Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of the  Partnership.  Such costs are included in
professional services to Affiliates and  general and administrative expenses to
Affiliates, of which $17,278 and  $13,440  was  unpaid as of September 30, 1996
and December 31, 1995, respectively.

The General Partner is entitled to  receive Asset Management Fees equal to one-
quarter of 1% of  the  original  cost  to  the  Partnership of undeveloped land
annually, limited to a cumulative total over  the life of the Partnership of 2%
of the land's original  cost  to  the  Partnership.    Such fees of $42,708 and
$43,162 have been incurred for  the  nine  months  ended September 30, 1996 and
1995, respectively, and are included  in land operating expenses to Affiliates,
of which $13,781 and $415 was unpaid  as of September 30, 1996 and December 31,
1995, respectively.





                                    -8-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (unaudited)



An  Affiliate  of  the  General  Partner  performed  marketing  and advertising
services of the Partnership's land investments and was reimbursed (as set forth
under terms of the  Partnership  Agreement)  for  direct  costs.  Such costs of
$43,593 and $59,667 have been  incurred  and are included in marketing expenses
to  Affiliates  for  the  nine  months  ended  September  30,  1996  and  1995,
respectively, of which $15,814 and $0  was  unpaid as of September 30, 1996 and
December 31, 1995, respectively.

An Affiliate of  the  General  Partner  performed  property upgrades, rezoning,
annexation and other activities  to  prepare the Partnership's land investments
for sale and  was  reimbursed  (as  set  forth  under  terms of the Partnership
Agreement) for salaries and direct costs.   The Affiliate did not take a profit
on any project.  Such costs of  $113,920 and $66,175 have been incurred for the
nine months ended September 30,  1996  and 1995, respectively, and are included
in investments in land and improvements, of  which $42,902 and $0 was unpaid as
of September 30, 1996 and December 31, 1995, respectively.

Through the Partnership's participation  in  an  insurance program, claims from
the Partnership's properties,  as  well  as  properties  owned by other limited
partnerships syndicated by  Affiliates,  were  managed  through  a loss reserve
trust.  For the nine months ended  September 30, 1996 and 1995, the Partnership
paid $2,919 and $2,605, respectively,  to  the  loss reserve trust for the land
parcels.
























                                    -9-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

(3) Investments in Land and Improvements

                   Gross                                        
                   Acres   Purchase/               Initial Costs            
       Location: Purchased   Sales       Original  Acquisition      
Parcel  County     (Sold)    Date         Costs       Costs        Total    

 1       Kendall   84.7360  01/19/89 $   423,680       61,625      485,305 

 2       McHenry  223.4121  01/19/89     650,000       95,014      745,014
                 (183.3759) 12/27/90 

 3       Kendall   20.0000  02/09/89     189,000       13,305      202,305
                  (20.0000) 05/08/90 

 4       Kendall   69.2760  04/18/89     508,196       38,126      546,322
                    (.4860) 02/28/91
                  (27.5750) 08/25/95

 5   Kendall (a)  372.2230  05/03/89   2,532,227      135,943    2,668,170
                   (Option) 04/06/90 

 6   Kendall (b)   78.3900  06/21/89     416,783       31,691      448,474

 7   Kendall (b)   77.0490  06/21/89      84,754        8,163       92,917

 8   Kendall (b)    5.0000  06/21/89      60,000        5,113       65,113
                   (5.0000) 10/06/89 

 9   McHenry (b)   51.0300  08/07/89     586,845       22,482      609,327

10   McHenry (b)  123.9400  08/07/89      91,939        7,224       99,163
                 (123.9400) 12/06/89

11   McHenry (b)   30.5920  08/07/89     321,216       22,641      343,857

12       Kendall   90.2710  10/31/89     907,389       41,908      949,297
                    (.7090) 04/26/91

13       McHenry   92.7800  11/07/89     251,306       19,188      270,494

14       McHenry   76.2020  11/07/89     419,111       23,402      442,513

15          Lake   84.5564  01/03/90   1,056,955       85,283    1,142,238
                   (5.6770) 08/08/96 ------------ ------------ ------------
      Subtotal                         8,499,401      611,108    9,110,509

                                        Total
           Costs                      Remaining      Current
        Capitalized     Costs of      Costs of      Year Gain
       Subsequent to    Property     Parcels at      on Sale
Parcel  Acquisition       Sold         9/30/96      Recognized 

 1         1,564,075         -          2,049,380         -

 2            16,869      611,505         150,378         -
 
 3              -         202,305            -            -

 4            (4,517)     235,275         306,530         -

 5            25,671      160,313       2,533,528         -

 6           134,154         -            582,628         -

 7           118,724         -            211,641         -

 8              -          65,113            -            -

 9               610         -            609,937         -

10               600       99,763            -            -

11             5,420         -            349,277         -

12               329        7,456         942,170         -

13             2,981         -            273,475         -

14            42,784         -            485,297         -

15           733,926      120,389       1,755,775       39,235
       -------------- ------------   ------------- ------------
           2,641,626    1,502,119      10,250,016       39,235


                                   -10-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

(3) Investments in Land and Improvements (continued)

                   Gross                                        
                   Acres   Purchase/               Initial Costs            
       Location: Purchased   Sales       Original  Acquisition     
Parcel  County     (Sold)    Date         Costs       Costs        Total    

        Subtotal                       8,499,401      611,108    9,110,509

16  Kane/Kendall   72.4187  01/29/90   1,273,537       55,333    1,328,870

17       McHenry   99.9240  01/29/90     739,635       61,038      800,673

18       McHenry   71.4870  01/29/90     496,116       26,259      522,375
                    (.5000) 06/05/90
                    (.5000) 12/11/90
                    (.5200) 03/11/93

19       McHenry   63.6915  02/23/90     490,158       29,158      519,316

20          Kane  224.1480  02/28/90   2,749,800      183,092    2,932,892
                    (.2790) 10/17/91

21       Kendall  172.4950  03/08/90   1,327,459       75,822    1,403,281

22       McHenry  254.5250  04/11/90   2,608,881      136,559    2,745,440

23       Kendall  140.0210  05/08/90   1,480,000      116,240    1,596,240
                   (4.4100) var 1993
                  (35.8800) var 1994
                   (3.4400) var 1995

24       Kendall  298.4830  05/23/90   1,359,774       98,921    1,458,695
                  (12.4570) 05/25/90 
                   (4.6290) 04/01/96 

25          Kane  225.0000  06/01/90   2,600,000      168,778    2,768,778
                                     ------------ ------------ ------------
                                     $23,624,761    1,562,308   25,187,069
                                     ============ ============ ============

                                        Total
           Costs                      Remaining      Current
        Capitalized    Costs of       Costs of      Year Gain
       Subsequent to   Property      Parcels at      on Sale
Parcel  Acquisition      Sold          9/30/96     Recognized

           2,641,626    1,502,119     10,250,016        39,235

16            45,788         -         1,374,658          -

17           193,485         -           994,158          -

18            16,077       11,109        527,343          -

19             6,752         -           526,068          -

20           211,893        3,651      3,141,134          -

21           118,840         -         1,522,121          -

22            22,260         -         2,767,700          -

23           417,870    1,196,909        817,201         6,306

24            16,735       83,663      1,391,767        30,026

25            13,359         -         2,782,137          -
       -------------- ------------  -------------  ------------
           3,704,685    2,797,451     26,094,303        75,567
       ============== ============  =============  ============


                                   -11-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)



(3) Investments in Land and Improvements (continued)


a.   Included in  the  purchase  agreement  of  Parcel  5  was  a condition
     that required the Partnership to  buy  an  option  to purchase an
     additional 243 acres immediately to the west of this parcel.  The sale
     transaction relates to the sale of this option.

b.   The Partnership  purchased  from  two  third  parties,  two  sets  of
     three contiguous parcels of land (Parcels  6,7  &  8;  and Parcels 9,
     10 and 11). The General Partner believes that the  total  value  of this
     land will be maximized if it is treated and  marketed  to buyers as six
     separate parcels and closed the transactions as  six  separate purchases
     to facilitate this. Parcels 6, 7, and 8 will be treated  as one parcel and
     Parcels 9, 10 and 11 will be treated as one parcel  for purposes of
     computing Parcel Capital (as defined) and distributions to the Partners.

c.   Reconciliation of real estate owned:

                                          1996               1995
                                          ----               ----
     Balance at January 1,........... $24,846,973         24,106,379

     Additions during period.........   1,390,504          1,069,759

     Sales during period.............     143,174            329,165
                                      ------------       ------------
     Balance at end of period........ $26,094,303         24,846,973
                                      ============       ============



















                                   -12-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (unaudited)



(4)  Farm Rental Income

The Partnership has determined that all leases relating to the farm parcels are
operating leases.  Accordingly, rental income is reported when earned.

As of September 30, 1996, the Partnership had farm leases of generally one year
in duration, for approximately  2,145  acres  of  the approximately 2,672 acres
owned.


(5)  Mortgage Loans Receivable

As a result of the sale  of  four  lots  in Parcel 23, the Partnership received
mortgage loans receivable totaling  $155,921.    As  of  December 31, 1995, two
mortgage loans receivable totaling    $82,307  had  been  prepaid.  During June
1996, an additional  mortgage  loan  receivable  of  $37,952  was prepaid.  The
Partnership will  continue  to  receive  interest  only  payments  based  on an
interest rate  of  9%  per  annum  on  the  remaining  mortgage  loan which has
principal due in the fourth quarter of 1996.


(6)  Notes Payable to Affiliate

On May 1, 1996 and June 1, 1996, the Partnership obtained two separate lines of
credit from the General Partner,  Inland Real Estate Investment Corporation, in
the aggregate amounts of $1,000,000 and $3,000,000, to be used specifically for
the pre-development improvements on two  of the Partnership's land investments,
Parcel 15 and Parcel 1, respectively.   As of September 30, 1996, notes payable
to Affiliate  was  $752,158,  of  which  $250,249  was  applicable  to the note
collateralized  by  Parcel  15  and   $501,909   was  applicable  to  the  note
collateralized by Parcel 1.   Included  in  the $752,158 is accrued interest of
$14,462, of which $6,686 was unpaid as  of September 30, 1996.  The Partnership
is required to pay a 1% loan fee  to the General Partner on each line of credit
as money is funded.  As of  September  30,  1996, loan fees paid to the General
Partner totaled $7,522, all of which  have been paid and included in investment
in land and  improvements.    The  note  collateralized  by  Parcel 15, accrues
interest at 10.9%, and requires a  principal  paydown of $150,000 on October 1,
1996, and thereafter Net Sales Proceeds from Parcel 15 will be applied first to
paydown the note.  This note  has  a  maturity  date  of May 1, 1997.  The note
collateralized by Parcel 1, accrues  interest  at 10.9%, and requires Net Sales
Proceeds from Parcel 1 to be applied first  to paydown the note.  This note has
a maturity date of June 30, 1998.





                                   -13-


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1996
                                  (unaudited)



(7)  Subsequent Events

On October 28, 1996,  the  Partnership  sold  its  third  lot  (Lot #25) in the
Countryside Glen Subdivision (Parcel  15)  to  an  unaffiliated third party for
$105,990.  The cost allocated to  the  lot  was $30,592, resulting in a gain on
sale of $74,835, net of closing costs. 









































                                   -14-


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



Liquidity and Capital Resources

On October 12, 1988, the  Partnership  commenced an Offering of 10,000 (subject
to increase to 30,000)  Limited  Partnership  Units  pursuant to a Registration
Statement on  Form  S-11  under  the  Securities  Act  of  1933.   The Offering
terminated on October 6, 1989, with  total  sales of 30,000 Units at $1,000 per
Unit, resulting in $30,000,000  in  gross  offering proceeds, not including the
General  Partner's  contribution  of  $500  or  the  Initial  Limited Partner's
contribution of $1,000.  The Limited  Partners of the Partnership will share in
their portion of  benefits  of  ownership  of  the  Partnership's real property
investments according to the number of Units held.

The Partnership used $25,187,069 of gross  offering proceeds to purchase, on an
all-cash basis,  twenty-five  parcels  of  undeveloped  land  and  an option to
purchase undeveloped land.    These  investments  included  the  payment of the
purchase price, acquisition  fees  and  acquisition  costs  of such properties.
Fourteen of the parcels were purchased during  1989 and eleven during 1990.  As
of September 30, 1996,  the  Partnership  has  had multiple sales transactions,
through which it has disposed  of  approximately 430 acres of the approximately
3,102  acres  originally  owned.     As   of  September  30,  1996,  cumulative
distributions of net  sales  proceeds  have  totaled  $4,146,395 to the Limited
Partners (which represents a  return  of  Invested  Capital,  as defined in the
Partnership Agreement) and $153,743 to  the  General  Partner.  As of September
30, 1996, the Partnership has  used  $3,704,685  of working capital reserve for
rezoning and other activities  and  such  amount  is included in investments in
land and improvements.

The Partnership's capital needs and resources will vary depending upon a number
of factors, including the extent to which the Partnership conducts rezoning and
other  activities  relating  to  utility  access,  the  installation  of roads,
subdivision and/or annexation of land to a municipality, changes in real estate
taxes affecting the Partnership's land, and the amount of revenue received from
leasing.  As of September 30, 1996,  the Partnership owns, in whole or in part,
twenty-two of its original parcels, the  majority  of which are leased to local
tenants and are generating sufficient  cash  flow from leases to cover property
taxes and insurance.

At September  30,  1996,  the  Partnership  had  cash  and  cash equivalents of
$57,845.  The Unit Repurchase  Program has approximately $123,023 remaining for
the repurchase of Units. There  are  currently  no requests for repurchase, but
the Partnership plans  to  replenish  cash  available  for this program through
future parcel sales.  The Partnership  has increased its parcel sales effort in
anticipation of rising land values.










                                   -15-


The Partnership plans to enhance the  value of its land through pre-development
activities such as rezoning annexation and  land planning.  The Partnership has
already been successful in, or is in the process of pre-development activity on
a majority of the  Partnership's  land  investments.    Parcel 1, zoned and its
preliminary plan approved by the  Village  of Oswego, has improvements underway
and sites are being marketed to potential buyers.  Parcel 15, zoned and annexed
to the Village of Hawthorn Woods,  also has improvements underway and sites are
being marketed to potential buyers.  

Results of Operations

As of September 30,  1996,  the  Partnership  owned  twenty-two parcels of land
consisting  of  approximately   2,672   acres.   Of   the  2,672  acres  owned,
approximately 2,145 acres are  tillable  and  leased  to  local farmers and are
generating sufficient cash flow  to  cover  property taxes, insurance and other
miscellaneous expenses.  The sale of investments in land income and the cost of
investments in land sold recorded for the three and nine months ended September
30, 1995 is a result of the continued sale of lots of Parcel 23 and the sale of
27.575 acres of Parcel 4.  The sale  of investments in land income and the cost
of investments in  land  sold  recorded  for  the  three  and nine months ended
September 30, 1996 is a result  of  the  sale  of 4.629 acres of Parcel 24, the
sale of 5.677 acres  (Lots  1  and  2)  of  Parcel  15  and the prepayment of a
mortgage loan receivable and recognition of  deferred gain relating to the 1994
lot sales of Parcel  23.    The  decrease  in  rental income and land operating
expenses to  Affiliates  for  the  nine  months  ended  September  30, 1996, as
compared to nine months ended  September  30,  1995,  is due to the decrease of
tillable acres and an overall  decrease  of  the  land portfolio as a result of
land sales and pre-development.    This  decrease  was  partially offset by the
annual increase in lease amounts from  tenants.  The decrease in land operating
expenses to non-affiliates for  the  nine  months  ended September 30, 1996, as
compared to the nine months ended  September  30,  1995, is due to decreases in
real estate taxes, insurance and grounds maintenance of the land portfolio as a
result of land sales.

Interest income decreased for  the  three  and  nine months ended September 30,
1996, as compared to the three  and  nine  months ended September 30, 1995, due
primarily to the Partnership utilizing its working capital reserve to fund pre-
development activity on the Partnership's land investments.

Professional services to Affiliates  increased  for  the  three and nine months
ended September 30,  1996,  as  compared  to  the  three  and nine months ended
September 30,  1995,  due  to  increases  in  legal  services  required  by the
Partnership.  This increase was  partially  offset  by a decrease in accounting
services.  Professional services to  non-affiliates increased for the three and
nine months ended September 30, 1996, as  compared to the three and nine months
ended September 30, 1995, due to an increase in legal services.

General and administrative expenses to  Affiliates  increased for the three and
nine months ended September 30, 1996, as  compared to the three and nine months
ended September 30, 1995, due primarily to an increase in postage.  General and
administrative expenses to  non-affiliates  decreased  for  the  three and nine
months ended September 30, 1996, as compared to the three and nine months ended
September 30, 1995, due  primarily  to  a  decrease in the Illinois Replacement
Tax.




                                   -16-


Marketing expenses to Affiliates decreased for  the three and nine months ended
September 30, 1996, as compared  to  the  three and nine months ended September
30, 1995, due to a decrease  in  expenses relating to marketing and advertising
the Partnership's  land  investments.    Marketing  expenses  to non-affiliates
increased for the nine months ended September 30, 1996, as compared to the nine
months ended September 30, 1995, due  to  an increase in advertising and travel
expenses relating to marketing the land portfolio to prospective purchasers.





                          PART II - Other Information

Items 1 through 5 are omitted because  of the absence of conditions under which
they are required.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         (27) Financial Data Schedule

     (b) Reports on Form 8-K:

         None
































                                   -17-





                                  SIGNATURES



Pursuant to the  requirements  of  the  Securities  Exchange  Act  of 1934, the
Registrant has duly caused  this  report  to  be  signed  on  its behalf by the
undersigned, thereunto duly authorized.


                            INLAND LAND APPRECIATION FUND, L.P.

                            By:   Inland Real Estate Investment Corporation
                                  General Partner


                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman
                            Date: November 13, 1996


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: November 13, 1996


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: November 13, 1996




















                                   -18-