Page 20 of 20
                                 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 September 30, 2002

                                    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 20.

<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 note thereto  for
the  year ended December 31, 2001 which are found in the Registrant's  Form
10-K  Report  for  2001 filed with the Securities and Exchange  Commission.
The December 31, 2001 balance sheet included herein has been taken from the
Registrant's  2001 Form 10-K Report.  Operating results for the  three  and
nine  month periods ended September 30, 2002 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

                                          September        December
                                             30,             31,
                                             2002            2001
                                         -----------      ---------
                                         (unaudited)
Assets
------
Current assets:
 Cash and cash equivalents            $    62,657          63,123
  Receivable  from  Managing  General     116,757          60,341
Partner
                                         ---------       ---------
   Total current assets                   179,414         123,464
                                         ---------       ---------
Oil  and  gas properties - using  the
full-
 cost method of accounting               4,133,496       4,133,496
  Less accumulated depreciation,
   depletion and amortization            3,748,058       3,726,058
                                         ---------       ---------
   Net oil and gas properties             385,438         407,438
                                         ---------       ---------
                                      $  564,852          530,902
                                         =========       =========

Liabilities and Partners' Equity
--------------------------------

Current   liability  -   distribution $  766                  523
payable
                                         ---------       ---------
Partners' equity:
 General partners                        12,191             6,620
 Limited partners                        551,895          523,759
                                         ---------       ---------
   Total partners' equity                564,086          530,379
                                         ---------       ---------
                                      $  564,852          530,902
                                         =========       =========

<PAGE>

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

                         Statements of Operations
                                (unaudited)


                                 Three Months       Nine Months
                                     Ended             Ended
                                 September 30,     September 30,
                                 2002     2001      2002    2001
                                 ----     ----      ----    ----
Revenues
--------
Income from net profits      $ 127,375  142,584   266,652  489,733
interests
Interest                       210      972       609       3,926
Miscellaneous settlement       1        -         2,254         -
                               -------  -------   -------  -------
                               127,586  143,556   269,515  493,659
                               -------  -------   -------  -------

Expenses
--------
General and administrative     20,300    19,587    58,808  58,529
Depreciation, depletion and
 amortization                  7,000     19,000    22,000  41,000
                               -------  -------   -------  -------
                               27,300    38,587   80,808   99,529
                               -------  -------   -------  -------
Net income                   $ 100,286  104,969   108,707  394,130
                               =======  =======   =======  =======

Net income allocated to:

Managing General Partner     $ 10,729    11,157    21,071  39,162
                               =======  =======   =======  =======
General Partner              $ -          1,240         -   4,351
                               =======  =======   =======  =======
Limited Partners             $ 89,557    92,572   167,636  350,617
                               =======  =======   =======  =======
 Per limited partner unit    $    8.83     9.12     16.52   34.55
                               =======  =======   =======  =======


<PAGE>

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

                         Statements of Cash Flows
                                (unaudited)


                                                      Nine Months Ended
                                                        September 30,
                                                       2002      2001
                                                       ----      ----
Cash flows from operating activities

 Cash received from income from net
  profits interests                                $ 199,246  542,713
 Cash paid to suppliers                              (47,818  (47,889)
                                                     )
 Interest received                                   609      3,926
 Miscellaneous settlement                            2,254    -
                                                     -------  -------
   Net cash provided by operating activities         154,291  498,750
                                                     -------  -------
Cash flows used in financing activities

 Distributions to partners                           (154,75  (529,490)
                                                     7)
                                                     -------  -------

   Net decrease in cash and cash equivalents         (466)    (30,740)

 Beginning of period                                 63,123   101,708
                                                     -------  -------
 End of period                                     $ 62,657   70,968
                                                     =======  =======
Reconciliation of net income to net cash
provided by operating activities

Net income                                         $ 188,707  394,130

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

  Depreciation, depletion and amortization           22,000   41,000
  (Increase) decrease receivables                    (67,406  52,981
                                                     )
  Increase in payables                               10,991   10,639
                                                     -------  -------
Net cash provided by operating activities          $ 154,292  498,750
                                                     =======  =======


<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.   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 September 30, 2002,  and  for
     the  three  and  nine months ended September 30, 2002,  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, 2001.

3.   Subsequent Event
     On  October  17, 2002, Southwest Royalties, Inc. the Managing  General
     Partner   filed   an   S-4   "Registration  of  Securities,   Business
     Combinations"  with the Securities and Exchange Commission.   The  S-4
     relates   to   a  proposed  plan  of  merger  of  twenty-one   limited
     partnerships.

<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 farmout 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  2002  to  enhance  production.  The partnership  will  most  likely
experience the historical production decline of approximately 9% 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 September 30, 2002, the net capitalized costs  did
not exceed the estimated present value of oil and gas reserves.

Under  the  units of revenue method, the Partnership computes the provision
by  multiplying the total unamortized cost of oil and gas properties by  an
overall  rate  determined by dividing (a) oil and gas revenues  during  the
period  by (b) the total future gross oil and gas revenues as estimated  by
the  Partnership's  independent petroleum consultants.   It  is  reasonably
possible  that  those estimates of anticipated future gross  revenues,  the
remaining estimated economic life of the product, or both could be  changed
significantly in the near term due to the potential fluctuation of oil  and
gas prices or production.  The depletion estimate would also be affected by
this change.

<PAGE>

The  Partnership's  interest  in oil and gas  properties  consists  of  net
profits  interests  in  proved properties located  within  the  continental
United  States.   A net profits interest is created when  the  owner  of  a
working  interest in a property enters into an arrangement  providing  that
the  net profits interest owner will receive a stated percentage of the net
profit  from  the  property.   The  net profits  interest  owner  will  not
otherwise participate in additional costs and expenses of the property.

The  Partnership recognizes income from its net profits interest in oil and
gas property on an accrual basis, while the quarterly cash distributions of
the net profits interest are based on a calculation of actual cash received
from  oil  and  gas sales, net of expenses incurred during  that  quarterly
period.  The  net  profits interest is a calculated revenue  interest  that
burdens  the  underlying  working interest in the  property,  and  the  net
profits  interest  owner is not responsible for the actual  development  or
production  expenses  incurred.  Accordingly, if the net  profits  interest
calculation results in expenses incurred exceeding the oil and  gas  income
received during a quarter, no cash distribution is due to the Partnership's
net  profits  interest  until  the deficit is  recovered  from  future  net
profits.   The  Partnership accrues a quarterly loss  on  its  net  profits
interest provided there is a cumulative net amount due for accrued  revenue
as of the balance sheet date.

Critical Accounting Policies

Full cost ceiling calculations The Partnership follows the full cost method
of  accounting  for  its  oil and gas properties.   The  full  cost  method
subjects  companies to quarterly calculations of a "ceiling", or limitation
on  the  amount of properties that can be capitalized on the balance sheet.
If  the  Partnership's capitalized costs are in excess  of  the  calculated
ceiling, the excess must be written off as an expense.

The  Partnership's discounted present value of its proved oil  and  natural
gas  reserves  is  a  major  component  of  the  ceiling  calculation,  and
represents  the  component  that requires the  most  subjective  judgments.
Estimates  of  reserves are forecasts based on engineering data,  projected
future  rates  of  production and the timing of future  expenditures.   The
process  of  estimating oil and natural gas reserves  requires  substantial
judgment,  resulting  in  imprecise determinations,  particularly  for  new
discoveries.   Different reserve engineers may make different estimates  of
reserve  quantities  based  on the same data.   The  Partnership's  reserve
estimates are prepared by outside consultants.

The  passage  of  time  provides  more  qualitative  information  regarding
estimates of reserves, and revisions are made to prior estimates to reflect
updated  information.   However,  there  can  be  no  assurance  that  more
significant  revisions  will not be necessary in  the  future.   If  future
significant  revisions  are  necessary  that  reduce  previously  estimated
reserve quantities, it could result in a full cost property writedown.   In
addition to the impact of these estimates of proved reserves on calculation
of  the  ceiling,  estimates  of proved reserves  are  also  a  significant
component of the calculation of DD&A.

While  the quantities of proved reserves require substantial judgment,  the
associated prices of oil and natural gas reserves that are included in  the
discounted  present  value of the reserves do not  require  judgment.   The
ceiling calculation dictates that prices and costs in effect as of the last
day  of  the  period are generally held constant indefinitely. Because  the
ceiling  calculation dictates that prices in effect as of the last  day  of
the  applicable quarter are held constant indefinitely, the resulting value
is  not indicative of the true fair value of the reserves.  Oil and natural
gas  prices have historically been cyclical and, on any particular  day  at
the  end of a quarter, can be either substantially higher or lower than the
Partnership's  long-term price forecast that is a barometer for  true  fair
value.

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.
<PAGE>
Results of Operations

A.  General Comparison of the Quarters Ended September 30, 2002 and 2001

The  following  table  provides certain information  regarding  performance
factors for the quarters ended September 30, 2002 and 2001:

                                                 Three Months
                                                    Ended        Percentage
                                                September 30,     Increase
                                                2002      2001   (Decrease)
                                                ----      ----   ---------
Average price per barrel of oil            $   27.01     24.41      11%
Average price per mcf of gas               $    2.98      2.93       2%
Oil production in barrels                      9,400    10,500    (10%)
Gas production in mcf                          9,600    12,300    (22%)
Income from net profits interests          $ 127,375   142,584    (11%)
Partnership distributions                  $  50,000   150,000    (67%)
Limited partner distributions              $  45,000   135,000    (67%)
Per unit distribution to limited partners  $    4.43     13.30    (67%)
Number of limited partner units               10,147    10,147

Revenues

The  Partnership's income from net profits interests decreased to  $127,375
from  $142,584  for  the  quarters  ended  September  30,  2002  and  2001,
respectively,  a  decrease  of 11%.  The principal  factors  affecting  the
comparison  of  the  quarters ended September 30,  2002  and  2001  are  as
follows:

1.   The  average  price  for a barrel of oil received by  the  Partnership
     increased  during the quarter ended September 30, 2002 as compared  to
     the  quarter  ended  September 30, 2001 by 11%, or $2.60  per  barrel,
     resulting in an increase of approximately $24,400 in income  from  net
     profits  interests.  Oil sales represented 90% of total  oil  and  gas
     sales  during the quarter ended September 30, 2002 as compared to  88%
     during the quarter ended September 30, 2001.

     The  average  price  for  an mcf of gas received  by  the  Partnership
     increased during the same period by 2%, or $.05 per mcf, resulting  in
     an   increase  of  approximately  $500  in  income  from  net  profits
     interests.

     The  total  increase in income from net profits interests due  to  the
     change in prices received from oil and gas production is approximately
     $24,900.  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 decreased approximately 1,100 barrels or 10% during  the
   quarter  ended  September  30, 2002 as compared  to  the  quarter  ended
   September 30, 2001, resulting in a decrease of approximately $26,900  in
   income from net profits interests.

    Gas production decreased approximately 2,700 mcf or 22% during the same
    period, resulting in a decrease of approximately $7,900 in income  from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change  in  production is approximately $34,800.  The decrease  in  gas
    production is due primarily to several small wells experiencing a sharp
    natural decline.

3. Lease  operating  costs  and  production  taxes  were  12%  higher,   or
   approximately $17,000 more during the quarter ended September  30,  2002
   as compared to the quarter ended September 30, 2001.

Costs and Expenses

Total costs and expenses decreased to $27,300 from $38,587 for the quarters
ended  September 30, 2002 and 2001, respectively, a decrease of  29%.   The
decrease is the result of lower depletion expense, partially offset  by  an
increase 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 increased 4%
    or  approximately $700 during the quarter ended September 30,  2002  as
    compared to the quarter ended September 30, 2001.

2.  Depletion  expense decreased to $7,000 for the quarter ended  September
    30,  2002 from $19,000 for the same period in 2001.  This represents  a
    decrease  of 63%.  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.   Contributing
    factors  to  the decrease in depletion expense between the  comparative
    periods were the increase in the price of oil and gas used to determine
    the Partnership's reserves for October 1, 2002 as compared to 2001, and
    the increase in oil and gas revenues received by the Partnership during
    2002 as compared to 2001.


<PAGE>

B.   General Comparison of the Nine Month Periods Ended September 30,  2002
and 2001

The  following  table  provides certain information  regarding  performance
factors for the nine month periods ended September 30, 2002 and 2001:

                                                 Nine Months
                                                    Ended        Percentage
                                                September 30,     Increase
                                                2002      2001   (Decrease)
                                                ----      ----   ---------
Average price per barrel of oil            $   23.48     25.59     (8%)
Average price per mcf of gas               $    2.89      4.56    (37%)
Oil production in barrels                     27,100    30,000    (10%)
Gas production in mcf                         27,100    34,400    (21%)
Income from net profits interests          $ 266,652   489,733    (46%)
Partnership distributions                  $ 155,000   530,000    (71%)
Limited partner distributions              $ 139,500   477,000    (71%)
Per unit distribution to limited partners  $   13.75     47.01    (71%)
Number of limited partner units               10,147    10,147

Revenues

The  Partnership's income from net profits interests decreased to  $266,652
from  $489,733  for  the nine months ended September  30,  2002  and  2001,
respectively,  a  decrease  of 46%.  The principal  factors  affecting  the
comparison  of  the nine months ended September 30, 2002 and  2001  are  as
follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    decreased  during the nine months ended September 30, 2002 as  compared
    to the nine months ended September 30, 2001 by 8%, or $2.11 per barrel,
    resulting  in  a decrease of approximately $57,200 in income  from  net
    profits  interests.  Oil sales represented 89% of  total  oil  and  gas
    sales  during the nine months ended September 30, 2002 as  compared  to
    83% during the nine months ended September 30, 2001.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    decreased during the same period by 37%, or $1.67 per mcf, resulting in
    a  decrease  of  approximately  $45,300  in  income  from  net  profits
    interests.

    The  total  decrease in income from net profits interests  due  to  the
    change  in prices received from oil and gas production is approximately
    $102,500.  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 decreased approximately 2,900 barrels or 10% during  the
   nine  months  ended September 30, 2002 as compared to  the  nine  months
   ended  September  30,  2001,  resulting in a decrease  of  approximately
   $74,200 in income from net profits interests.

    Gas production decreased approximately 7,300 mcf or 21% during the same
    period, resulting in a decrease of approximately $33,300 in income from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change  in production is approximately $107,500.  The decrease  in  gas
    production  is primarily due to downtime on one lease during  the  nine
    months ended September 30, 2002.

3.  Lease  operating  costs  and  production  taxes  were  3%  higher,   or
    approximately  $13,400 more during the nine months ended September  30,
    2002 as compared to the nine months ended September 30, 2001.

Costs and Expenses

Total  costs  and expenses decreased to $80,808 from $99,529 for  the  nine
months ended September 30, 2002 and 2001, respectively, a decrease of  19%.
The decrease is the result of lower depletion expense, partially offset  by
an increase 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  increased
    less  than  1%  or  approximately $300 during  the  nine  months  ended
    September  30, 2002 as compared to the nine months ended September  30,
    2001.

2.  Depletion  expense  decreased to $22,000  for  the  nine  months  ended
    September  30,  2002 from $41,000 for the same period  in  2001.   This
    represents a decrease of 46%.  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.
    Contributing factors to the decrease in depletion expense  between  the
    comparative periods were the increase in the price of oil and gas  used
    to determine the Partnership's reserves for October 1, 2002 as compared
    to  2001,  and  the decrease in oil and gas revenues  received  by  the
    Partnership during 2002 as compared to 2001.

<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 $154,300  in
the  nine  months  ended  September 30, 2002 as compared  to  approximately
$498,700  in the nine months ended September 30, 2001.  The primary  source
of the 2002 cash flow from operating activities was profitable operations.

Cash flows used in financing activities were approximately $154,800 in  the
nine  months ended September 30, 2002 as compared to approximately $529,500
in  the  nine  months ended September 30, 2001.  The only use in  financing
activities was the distributions to partners.

Total  distributions during the nine months ended September 30,  2002  were
$155,000  of  which  $139,500 was distributed to the limited  partners  and
$15,500  to  the  general partners.  The per unit distribution  to  limited
partners during the nine months ended September 30, 2002 was $13.75.  Total
distributions during the nine months ended September 30, 2001 were $530,000
of  which  $477,000 was distributed to the limited partners and $53,000  to
the general partners.  The per unit distribution to limited partners during
the nine months ended September 30, 2001 was $47.01.

The  sources  for  the  2002 distributions of $155,000  were  oil  and  gas
operations of approximately $154,300, with the balance from available  cash
on  hand  at  the  beginning  of the quarter.   The  source  for  the  2001
distributions  of  $530,000  was oil and gas  operations  of  approximately
$498,700, with the balance from available cash on hand at the beginning  of
the quarter.

Since  inception of the Partnership, cumulative monthly cash  distributions
of  $7,187,087 have been made to the partners.  As of September  30,  2002,
$6,488,863 or $639.49 per limited partner unit has been distributed to  the
limited partners, representing a 128% return of the capital contributed.

As  of  September 30, 2002, the Partnership had approximately  $178,600  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.

On October 17, 2002, Southwest Royalties, Inc. the Managing General Partner
filed  an S-4 "Registration of Securities, Business Combinations" with  the
Securities and Exchange Commission.  The S-4 relates to a proposed plan  of
merger of twenty-one limited partnerships.

<PAGE>

Recent Accounting Pronouncements

The  FASB  has  issued Statement No. 143 "Accounting for  Asset  Retirement
Obligations" which establishes requirements for the accounting of  removal-
type  costs  associated with asset retirements.  The standard is  effective
for  fiscal  years beginning after June 15, 2002, with earlier  application
encouraged.  The Managing General Partner is currently assessing the impact
on the partnerships financial statements.

On  October 3, 2001, the FASB issued Statements No. 144 "Accounting for the
Impairment   or   Disposal  of  Long-Lived  Assets."   This   pronouncement
supercedes FAS 121 "Accounting for the Impairment of Long-Lived Assets  and
for  Long-Lived  Assets to Be Disposed" and eliminates the  requirement  of
Statement  121 to allocate goodwill to long-lived assets to be  tested  for
impairment.   The provisions of this statement are effective for  financial
statements issued for fiscal years beginning after December 15,  2001,  and
interim  periods  within those fiscal years.  The Managing General  Partner
believes  that  the impact from SFAS No. 144 on the Partnerships  financial
position  and  results  of operation should not be significantly  different
from that of SFAS No. 121.

In April 2002, FASB issued SFAS No. 145, "Rescission of SFAS No. 4, 44, and
64,  Amendment of SFAS No. 13, and Technical Corrections."  This  Statement
rescinds  SFAS  No.  4, "Reporting Gains and Losses from Extinguishment  of
Debt", and an amendment of that Statement, SFAS No. 64, "Extinguishments of
Debt  Made  to  Satisfy Sinking-Fund Requirements".   This  Statement  also
rescinds  or  amends  other existing authoritative pronouncements  to  make
various   technical  corrections,  clarify  meanings,  or  describe   their
applicability  under changed conditions.  This standard  is  effective  for
fiscal  years  beginning after May 15, 2002.  The Managing General  Partner
believes  that  the adoption of this statement will not have a  significant
impact on the Partnerships financial statements.

In  July  2002,  FASB issued SFAS No. 146 "Accounting for Costs  Associated
with  Exit  or  Disposal  Activities" which  establishes  requirements  for
financial  accounting  and  reporting for costs  associated  with  exit  or
disposal  activities.   This standard is effective  for  exit  or  disposal
activities initiated after December 31, 2002.  The Managing General Partner
is  currently  assessing the impact of this statement on the  Partnerships'
future financial statements.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

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

Item 4.   Controls and Procedures

     (a)  Evaluation  of  Disclosure Controls and  Procedures.   The  chief
executive officer and chief financial officer of the Partnership's managing
general  partner  have  evaluated  the  effectiveness  of  the  design  and
operation  of  the  Partnership's disclosure controls  and  procedures  (as
defined in Exchange Act Rule 13a-14(c)) as of a date within 90 days of  the
filing  date of this quarterly report. Based on that evaluation, the  chief
executive  officer  and  chief financial officer have  concluded  that  the
Partnership's  disclosure controls and procedures are effective  to  ensure
that material information relating to the Partnership and the Partnership's
consolidated  subsidiaries is made known to such officers by others  within
these  entities, particularly during the period this quarterly  report  was
prepared, in order to allow timely decisions regarding required disclosure.

     (b) Changes in Internal Controls.  There have not been any significant
changes  in  the Partnership's internal controls or in other  factors  that
could  significantly affect these controls subsequent to the date of  their
evaluation.

<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)  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, Executive Vice
President
                                        and Chief Financial Officer

Date:     November 14, 2002

<PAGE>
                         CERTIFICATIONS


          I, H.H. Wommack, III, certify that:

          1.   I have reviewed this quarterly report on Form 10-Q of
Southwest Royalties Institutional Income Fund VIII-B, L.P.;

          2.   Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to  state
a  material fact necessary to make the statements made, in  light
of  the circumstances under which such statements were made,  not
misleading  with respect to the period covered by this  quarterly
report;

          3.   Based on my knowledge, the financial statements, and other
financial  information included in this quarterly report,  fairly
present in all material respects the financial condition, results
of  operations and cash flows of the registrant as of,  and  for,
the periods presented in this quarterly report;

          4.   The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure  controls
and  procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and we have:

               a)   designed such disclosure controls and procedures to ensure
               that material information relating to the registrant, including
               its consolidated subsidiaries, is made known to us by others
               within those entities, particularly during the period in which
               this quarterly report is being prepared;

               b)   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

               c)   presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

          5.   The registrant's other certifying officers and I have
disclosed,   based  on  our  most  recent  evaluation,   to   the
registrant's  auditors  and the audit committee  of  registrant's
board   of   directors  (or  persons  performing  the  equivalent
functions):

               a)   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

               b)   any fraud, whether or not material, that involves management
               or other employees who have a significant role in the
               registrant's internal controls; and

<PAGE>


          6.   The registrant's other certifying officers and I have
indicated  in  this quarterly report whether or  not  there  were
significant changes in internal controls or in other factors that
could  significantly affect internal controls subsequent  to  the
date  of  our  most recent evaluation, including  any  corrective
actions  with  regard  to significant deficiencies  and  material
weaknesses.


Date:  November 14, 2002




/s/ H.H. Wommack, III
H. H. Wommack, III
Chairman, President and Chief Executive Officer
  of Southwest Royalties, Inc., the
  Managing General Partner of
  Southwest Royalties Institutional
  Income Fund VIII-B, L.P.

<PAGE>

                         CERTIFICATIONS


          I, Bill E. Coggin, certify that:

          1.   I have reviewed this quarterly report on Form 10-Q of
Southwest Royalties Institutional Income Fund VIII-B, L.P.;

          2.   Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to  state
a  material fact necessary to make the statements made, in  light
of  the circumstances under which such statements were made,  not
misleading  with respect to the period covered by this  quarterly
report;

          3.   Based on my knowledge, the financial statements, and other
financial  information included in this quarterly report,  fairly
present in all material respects the financial condition, results
of  operations and cash flows of the registrant as of,  and  for,
the periods presented in this quarterly report;

          4.   The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure  controls
and  procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and we have:

               a)   designed such disclosure controls and procedures to ensure
               that material information relating to the registrant, including
               its consolidated subsidiaries, is made known to us by others
               within those entities, particularly during the period in which
               this quarterly report is being prepared;

               b)   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

               c)   presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

          5.   The registrant's other certifying officers and I have
disclosed,   based  on  our  most  recent  evaluation,   to   the
registrant's  auditors  and the audit committee  of  registrant's
board   of   directors  (or  persons  performing  the  equivalent
functions):

               a)   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

               b)   any fraud, whether or not material, that involves management
               or other employees who have a significant role in the
               registrant's internal controls; and

<PAGE>


          6.   The registrant's other certifying officers and I have
indicated  in  this quarterly report whether or  not  there  were
significant changes in internal controls or in other factors that
could  significantly affect internal controls subsequent  to  the
date  of  our  most recent evaluation, including  any  corrective
actions  with  regard  to significant deficiencies  and  material
weaknesses.


Date:  November 14, 2002




/s/ Bill E. Coggin
Bill E. Coggin
Executive Vice President
  and Chief Financial Officer of
  Southwest Royalties, Inc., the
  Managing General Partner of
  Southwest Royalties Institutional
  Income Fund VIII-B, L.P.



<PAGE>