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                                FORM 10-Q


                    SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

(Mark One)

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

For the quarterly period ended March 31, 2001

                                    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 number 0-16494


        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                  (Exact name of registrant as specified
                  in its limited partnership agreement)

Delaware                                75-2220418
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                Identification No.)


                       407 N. Big Spring, Suite 300
                           Midland, Texas 79701
                 (Address of principal executive offices)

                              (915) 686-9927
                      (Registrant's telephone number,
                           including area code)

Indicate  by  check  mark  whether 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

        The total number of pages contained in this report is 13.

<PAGE>
                     PART I. - FINANCIAL INFORMATION


Item 1.   Financial Statements

The  unaudited  condensed financial statements included  herein  have  been
prepared  by  the Registrant (herein also referred to as the "Partnership")
in  accordance  with generally accepted accounting principles  for  interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X.  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  management,   all
adjustments necessary for a fair presentation have been included and are of
a  normal  recurring nature.  The financial statements should  be  read  in
conjunction with the audited financial statements and the notes thereto for
the  year ended December 31, 2000 which are found in the Registrant's  Form
10-K  Report  for  2000 filed with the Securities and Exchange  Commission.
The December 31, 2000 balance sheet included herein has been taken from the
Registrant's 2000 Form 10-K Report.  Operating results for the three  month
period  ended March 31, 2001 are not necessarily indicative of the  results
that may be expected for the full year.

<PAGE>
        Southwest Royalties Institutional Income Fund VIII-B, L.P.

                              Balance Sheets


                                                 March 31,      December 31,
                                                      2001             2000
---------                                       ------------
                                                (unaudited)
  Assets

Current assets:
 Cash and cash equivalents                    $     72,711        101,708
 Receivable from Managing General
  Partner                                          168,117        177,112
                                                 ---------      ---------
   Total current assets                            240,828        278,820
                                                 ---------      ---------
Oil and gas properties - using the
 full-cost method of accounting                  4,133,496      4,133,496
  Less accumulated depreciation,
   depletion and amortization                    3,684,058      3,673,058
                                                 ---------      ---------
   Net oil and gas properties                      449,438        460,438
                                                 ---------      ---------
                                              $    690,266        739,258
                                                 =========      =========
  Liabilities and Partners' Equity

Current liability - Distributions payable     $          -            199
                                                 ---------      ---------
Partners' equity:
 General partners                                   18,409         22,188
 Limited partners                                  671,857        716,871
                                                 ---------      ---------
   Total partners' equity                          690,266        739,059
                                                 ---------      ---------
                                              $    690,266        739,258
                                                 =========      =========

<PAGE>
        Southwest Royalties Institutional Income Fund VIII-B, L.P.

                         Statements of Operations
                               (unaudited)


                                                        Three Months Ended
                                                            March 31,
                                                          2001      2000
                                                          ----      ----
  Revenues

Income from net profits interests                   $   229,631    183,636
Interest                                                  1,739        966
                                                        -------    -------
                                                        231,370    184,602
                                                        -------    -------
  Expenses

General and administrative                               19,163     19,435
Depreciation, depletion and amortization                 11,000     10,000
                                                        -------    -------
                                                         30,163     29,435
                                                        -------    -------
Net income                                          $   201,207    155,167
                                                        =======    =======
Net income allocated to:

 Managing General Partner                           $    19,099     14,865
                                                        =======    =======
 General partner                                    $     2,122      1,652
                                                        =======    =======
 Limited partners                                   $   179,986    138,650
                                                        =======    =======
  Per limited partner unit                          $     17.74      13.66
                                                        =======    =======

<PAGE>
        Southwest Royalties Institutional Income Fund VIII-B, L.P.

                         Statements of Cash Flows
                               (unaudited)


                                                        Three Months Ended
                                                            March 31,
                                                          2001      2000
                                                          ----      ----
Cash flows from operating activities:

 Cash received from income from net profits
  interests                                         $   235,078    142,892
 Cash paid to suppliers                                (15,615)   (12,640)
 Interest received                                        1,739        966
                                                       --------   --------
 Net cash provided by operating activities              221,202    131,218
                                                       --------   --------
Cash flows used in financing activities:

 Distributions to partners                            (250,199)  (100,421)
                                                       --------   --------
Net  increase (decrease) in cash and cash equivalents              (28,997)
30,797

 Beginning of period                                    101,708     65,039
                                                       --------   --------
 End of period                                      $    72,711     95,836
                                                       ========   ========

                                                               (continued)

<PAGE>
        Southwest Royalties Institutional Income Fund VIII-B, L.P.

                   Statements of Cash Flows, continued
                               (unaudited)


                                                        Three Months Ended
                                                            March 31,
                                                          2001      2000
                                                          ----      ----

Reconciliation of net income to net cash
 provided by operating activities:

Net income                                          $   201,207    155,167

Adjustments to reconcile net income to net
 cash provided by operating activities:

  Depreciation, depletion and amortization               11,000     10,000
  Decrease (increase) in receivables                      5,447   (40,744)
  Increase in payables                                    3,548      6,795
                                                        -------    -------
Net cash provided by operating activities           $   221,202    131,218
                                                        =======    =======

<PAGE>
        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                     (a Delaware limited partnership)

                      Notes to Financial Statements


1.   Organization
     Southwest  Royalties  Institutional  Income  Fund  VIII-B,  L.P.   was
     organized  under  the laws of the state of Delaware  on  November  30,
     1987,  for  the purpose of acquiring producing oil and gas  properties
     and to produce and market crude oil and natural gas produced from such
     properties  for a term of 50 years, unless terminated  at  an  earlier
     date  as  provided for in the Partnership Agreement.  The offering  of
     limited   partner   units  began  March  31,  1988,  minimum   capital
     requirements  were met July 11, 1988, with the offering  concluded  on
     March 31, 1989.

     The  Partnership  sells its oil and gas production  to  a  variety  of
     purchasers  with the prices it receives being dependent upon  the  oil
     and  gas  economy.  Southwest Royalties, Inc. serves as  the  Managing
     General  Partner  and  H. H. Wommack, III, as the  individual  general
     partner.  Revenues, costs and expenses are allocated as follows:

                                                     Limited      General
                                                     Partners     Partners
                                                     --------     --------
     Interest income on capital contributions          100%          -
     Oil and gas sales from net profits interests       90%         10%
     All other revenues                                 90%         10%
     Organization and offering costs (1)               100%          -
     Amortization of organization costs                100%          -
     Property acquisition costs                        100%          -
     Gain/loss on property dispositions                 90%         10%
     Operating and administrative costs (2)             90%         10%
     Depreciation, depletion and amortization
      of oil and gas properties                        100%          -
     All other costs                                    90%         10%

          (1)   All  organization costs in excess of 3% of initial  capital
          contributions  will be paid by the Managing General  Partner  and
          will  be treated as a capital contribution.  The Partnership paid
          the  Managing  General Partner an amount equal to 3%  of  initial
          capital contributions for such organization costs.

          (2)   Administrative costs in any year which exceed 2% of capital
          contributions shall be paid by the Managing Partner and  will  be
          treated as a capital contribution.

2.   Summary of Significant Accounting Policies
     The  interim financial information as of March 31, 2001, and  for  the
     three  months ended March 31, 2001, is unaudited.  Certain information
     and  footnote  disclosures normally included in  financial  statements
     prepared  in accordance with generally accepted accounting  principles
     have been condensed or omitted in this Form 10-Q pursuant to the rules
     and  regulations of the Securities and Exchange Commission.   However,
     in  the  opinion  of  management, these interim  financial  statements
     include all the necessary adjustments to fairly present the results of
     the interim periods and all such adjustments are of a normal recurring
     nature.  The interim consolidated financial statements should be  read
     in  conjunction  with the audited financial statements  for  the  year
     ended December 31, 2000.

<PAGE>

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

General

Southwest Royalties Institutional Income Fund VIII-B, L.P. was organized as
a  Delaware limited partnership on November 30, 1987. The offering of  such
limited  partnership  interests  began  March  31,  1988,  minimum  capital
requirements were met July 11, 1988, and concluded on March 31,  1989  with
total limited partner contributions of $5,073,500.

The Partnership was formed to acquire royalty and net profits interests  in
producing  oil  and  gas properties, to produce and market  crude  oil  and
natural  gas  produced  from such properties, and  to  distribute  the  net
proceeds from operations to the limited and general partners.  Net revenues
from  producing  oil  and gas properties will not be  reinvested  in  other
revenue  producing  assets except to the extent that production  facilities
and wells are improved or reworked or where methods are employed to improve
or enable more efficient recovery of oil and gas reserves.

Increases   or   decreases   in  Partnership   revenues   and,   therefore,
distributions  to partners will depend primarily on changes in  the  prices
received  for  production,  changes in volumes of  production  sold,  lease
operating  expenses, enhanced recovery projects, offset drilling activities
pursuant  to farm-out arrangements, sales of properties, and the  depletion
of  wells.   Since  wells deplete over time, production  can  generally  be
expected to decline from year to year.

Well  operating costs and general and administrative costs usually decrease
with   production   declines;  however,  these  costs  may   not   decrease
proportionately.  Net income available for distribution to the partners  is
therefore expected to fluctuate in later years based on these factors.

Based on current conditions, management anticipates performing no workovers
during 2001 to enhance production.  Workovers may be performed in the  year
2002  and 2003.  The partnership may have an increase in production volumes
for  the  years 2002 and 2003, otherwise, the partnership will most  likely
experience the historical production decline of approximately 7% to 8%  per
year.

Oil and Gas Properties

Oil  and  gas  properties  are accounted for at cost  under  the  full-cost
method.  Under this method, all productive and nonproductive costs incurred
in  connection with the acquisition, exploration and development of oil and
gas  reserves  are capitalized.  Gain or loss on the sale of  oil  and  gas
properties  is not recognized unless significant oil and gas  reserves  are
involved.

The  Partnership's policy for depreciation, depletion and  amortization  of
oil  and  gas  properties is computed under the units  of  revenue  method.
Under the units of revenue method, depreciation, depletion and amortization
is  computed  on  the  basis of current gross revenues from  production  in
relation  to future gross revenues, based on current prices, from estimated
production of proved oil and gas reserves.

Should the net capitalized costs exceed the estimated present value of  oil
and gas reserves, discounted at 10%, such excess costs would be charged  to
current  expense.  As of March 31, 2001, the net capitalized costs did  not
exceed the estimated present value of oil and gas reserves.

<PAGE>
Results of Operations

A.  General Comparison of the Quarters Ended March 31, 2001 and 2000

The  following  table  provides certain information  regarding  performance
factors for the quarters ended March 31, 2001 and 2000:

                                              Three Months
                                                 Ended           Percentage
                                                March 31,         Increase
                                              2001      2000     (Decrease)
                                              ----      ----     ----------
Average price per barrel of oil           $   26.68     26.70        -
Average price per mcf of gas              $    6.66      3.37      98%
Oil production in barrels                    10,200    10,000       2%
Gas production in mcf                        10,500    11,700    (10%)
Income from net profits interests         $ 229,631   183,636      25%
Partnership distributions                 $ 250,000   100,000     150%
Limited partner distributions             $ 225,000    90,000     150%
Per unit distribution to limited
 partners                                 $   22.17      8.87     150%
Number of limited partner units              10,147    10,147

Revenues

The  Partnership's income from net profits interests increased to  $229,631
from $183,636 for the quarters ended March 31, 2001 and 2000, respectively,
an  increase of 25%.  The principal factors affecting the comparison of the
quarters ended March 31, 2001 and 2000 are as follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    decreased  during the quarter ended March 31, 2001 as compared  to  the
    quarter  ended  March  31, 2000 by less than 1%, or  $.02  per  barrel,
    resulting  in  a  decrease of approximately $200  in  income  from  net
    profits  interests.  Oil sales represented 80% of  total  oil  and  gas
    sales during the quarter ended March 31, 2001 as compared to 87% during
    the quarter ended March 31, 2000.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    increased during the same period by 98%, or $3.29 per mcf, resulting in
    an  increase  of  approximately $34,500  in  income  from  net  profits
    interests.

    The  net total increase in income from net profits interests due to the
    change  in prices received from oil and gas production is approximately
    $34,300.   The market price for oil and gas has been extremely volatile
    over  the  past  decade, and management expects  a  certain  amount  of
    volatility to continue in the foreseeable future.

<PAGE>
2.  Oil  production increased approximately 200 barrels or  2%  during  the
    quarter ended March 31, 2001 as compared to the quarter ended March 31,
    2000,  resulting in an increase of approximately $5,300 in income  from
    net profits interests.

    Gas production decreased approximately 1,200 mcf or 10% during the same
    period, resulting in a decrease of approximately $4,000 in income  from
    net profits interests.

    The  net total increase in income from net profits interests due to the
    change in production is approximately $1,300.

3.  Lease   operating  costs  and  production  taxes  were  8%  lower,   or
    approximately $10,400 less during the quarter ended March 31,  2001  as
    compared to the quarter ended March 31, 2000.

Costs and Expenses

Total costs and expenses increased to $30,163 from $29,435 for the quarters
ended  March  31,  2001 and 2000, respectively, an  increase  of  2%.   The
increase is the result of higher depletion expense, partially offset  by  a
decrease in general and administrative expense.

1.  General and administrative costs consists of independent accounting and
    engineering  fees,  computer services, postage,  and  Managing  General
    Partner personnel costs.  General and administrative costs decreased 1%
    or  approximately  $300  during the quarter ended  March  31,  2001  as
    compared to the quarter ended March 31, 2000.

2.  Depletion expense increased to $11,000 for the quarter ended March  31,
    2001  from  $10,000  for the same period in 2000.  This  represents  an
    increase  of 10%.  Depletion is calculated using the units  of  revenue
    method  of  amortization based on a percentage of current period  gross
    revenues  to  total future gross oil and gas revenues, as estimated  by
    the Partnership's independent petroleum consultants.

<PAGE>
Liquidity and Capital Resources

The  primary source of cash is from operations, the receipt of income  from
interests in oil and gas properties.  The Partnership knows of no  material
change, nor does it anticipate any such change.

Cash flows provided by operating activities were approximately $221,200  in
the  quarter ended March 31, 2001 as compared to approximately $131,200  in
the quarter ended March 31, 2000.  The primary source of the 2001 cash flow
from operating activities was profitable operations.

Cash flows used in financing activities were approximately $250,200 in  the
quarter ended March 31, 2001 as compared to approximately $100,400  in  the
quarter ended March 31, 2000.  The only use in financing activities was the
distributions to partners.

Total  distributions during the quarter ended March 31, 2001 were  $250,000
of  which  $225,000 was distributed to the limited partners and $25,000  to
the general partners.  The per unit distribution to limited partners during
the  quarter  ended March 31, 2001 was $22.17.  Total distributions  during
the  quarter  ended  March  31, 2000 were $100,000  of  which  $90,000  was
distributed  to  the limited partners and $10,000 to the general  partners.
The  per  unit  distribution to limited partners during the  quarter  ended
March 31, 2000 was $8.87.

The  source  for  the  2001  distributions of  $250,000  was  oil  and  gas
operations of approximately $221,200, with the balance from available  cash
on  hand  at  the  beginning  of  the  period.  The  source  for  the  2000
distributions  of  $100,000  was oil and gas  operations  of  approximately
$131,200,   resulting  in  excess  cash  for  contingencies  or  subsequent
distributions to partners.

Since  inception of the Partnership, cumulative monthly cash  distributions
of  $6,661,823  have  been made to the partners.  As  of  March  31,  2001,
$6,016,125 or $592.90 per limited partner unit has been distributed to  the
limited partners, representing an 119% return of the capital contributed.

As of March 31, 2001, the Partnership had approximately $240,800 in working
capital.   The  Managing  General Partner knows of no  unusual  contractual
commitments  and  believes  the  revenues  generated  from  operations  are
adequate to meet the needs of the Partnership.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

The  Partnership  is  not a party to any derivative or embedded  derivative
instruments.

<PAGE>
                       PART II. - OTHER INFORMATION


Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities

          None

Item 3.   Defaults Upon Senior Securities

          None

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

          None

Item 5.   Other Information

          None

Item 6.   Exhibits and Reports on Form 8-K

               (a)  Reports on Form 8-K:

                     No  reports on Form 8-K were filed during the  quarter
               for which this report is filed.

<PAGE>
                                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.


                              SOUTHWEST ROYALTIES INSTITUTIONAL
                              INCOME FUND VIII-B, L.P.
                              a Delaware limited partnership


                              By:  Southwest Royalties, Inc.
                                   Managing General Partner


                              By:  /s/ Bill E. Coggin
                                   ------------------------------
                                   Bill E. Coggin, Vice President
                                   and Chief Financial Officer



Date:  May 15, 2001

<PAGE>