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 No. 33-19659-02


                           PARKER & PARSLEY 88-B, L.P.
             (Exact name of Registrant as specified in its charter)

              Delaware                                     75-2240121
    (State or other jurisdiction of                     (I.R.S. Employer
    incorporation or organization)                   Identification Number)

303 West Wall, Suite 101, Midland, Texas                      79701
(Address of principal executive offices)                    (Zip code)

       Registrant's Telephone Number, including area code : (915) 683-4768

                                 Not applicable
              (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 / /

                               Page 1 of 11 pages.
                             -There are no exhibits-


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                           PARKER & PARSLEY 88-B, L.P.

                                TABLE OF CONTENTS


                                                                     Page
                          Part I. Financial Information

Item 1.    Financial Statements

           Balance Sheets as of September 30, 1996 and
              December 31, 1995   .................................    3

           Statements of Operations for the three and nine
             months ended September 30, 1996 and 1995..............    4

           Statement of Partners' Capital for the nine months
             ended September 30, 1996..............................    5

           Statements of Cash Flows for the nine months ended
             September 30, 1996 and 1995...........................    6

           Notes to Financial Statements...........................    7

Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations...................    7
            


Part II.   Other Information.......................................   10

               Signatures..........................................   11



                                        2

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                           PARKER & PARSLEY 88-B, L.P.
                        (A Delaware Limited Partnership)

                          Part I. Financial Information

Item 1.   Financial Statements

                                 BALANCE SHEETS
                                                    September 30,  December 31,
                                                        1996          1995
                                                    -----------    -----------
                                                    (Unaudited)
                 ASSETS

Current assets:
  Cash and cash equivalents, including interest
     bearing deposits of $112,405 at September 30
     and $125,830 at December 31                    $   159,973    $   126,330
  Accounts receivable - oil and gas sales               118,678        104,938
                                                     ----------     ----------
          Total current assets                          278,651        231,268
                                                     ----------     ----------

Oil and gas properties - at cost, based on the
  successful efforts accounting method                7,108,417      7,114,609
     Accumulated depletion                           (4,531,111)    (4,375,388)
                                                     ----------     ----------
          Net oil and gas properties                  2,577,306      2,739,221
                                                     ----------     ----------
                                                    $ 2,855,957    $ 2,970,489
                                                     ==========     ==========

    LIABILITIES AND PARTNERS' CAPITAL

Current liabilities:
  Accounts payable - affiliate                      $    42,312    $    52,562

Partners' capital:
  Limited partners (8,954 interests)                  2,785,540      2,888,779
  Managing general partner                               28,105         29,148
                                                     ----------     ----------
                                                      2,813,645      2,917,927
                                                     ----------     ----------
                                                    $ 2,855,957    $ 2,970,489
                                                     ==========     ==========


The financial information included as of September 30, 1996 has been prepared by
           management without audit by independent public accountants.

   The accompanying notes are an integral part of these financial statements.

                                        3

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                           PARKER & PARSLEY 88-B, L.P.
                        (A Delaware Limited Partnership)

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                  Three months ended        Nine months ended
                                     September 30,             September 30,
                                ---------------------     ---------------------
                                   1996        1995          1996        1995
                                ---------   ---------     ---------   ---------

Revenues:
   Oil and gas                  $ 251,519   $ 212,774     $ 734,451   $ 673,219
   Interest                         2,250       2,258         5,822       5,972
                                 --------    --------      --------    --------

                                  253,769     215,032       740,273     679,191
                                 --------    --------      --------    --------

Costs and expenses:
   Oil and gas production         109,127     100,904       306,417     317,903
   General and administrative       7,546       6,354        22,034      20,167
   Depletion                       46,174      85,333       156,356     261,201
   Loss on abandoned property         -           -             951         -
   Abandoned property                  17         -             348         -
                                 --------    --------      --------    ------

                                  162,864     192,591       486,106     599,271
                                 --------    --------      --------    --------

Net income                      $  90,905   $  22,441     $ 254,167   $  79,920
                                 ========    ========      ========    ========
Allocation of net income:
   Managing general partner     $     910   $     224     $   2,542   $     799
                                 ========    ========      ========    ========

   Limited partners             $  89,995   $  22,217     $ 251,625   $  79,121
                                 ========    ========      ========    ========
Net income per limited
   partnership interest         $   10.05   $    2.48     $   28.10   $    8.84
                                 ========    ========      ========    ========
Distributions per limited
   partnership interest         $   14.22   $   12.02     $   39.63   $   38.51
                                 ========    ========      ========    ========

         The financial information included herein has been prepared by
           management without audit by independent public accountants.

   The accompanying notes are an integral part of these financial statements.

                                        4

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                           PARKER & PARSLEY 88-B, L.P.
                        (A Delaware Limited Partnership)

                         STATEMENT OF PARTNERS' CAPITAL
                                   (Unaudited)




                                      Managing
                                      general       Limited
                                      partner       partners          Total
                                     ---------     -----------     -----------

Balance at January 1, 1996           $  29,148     $ 2,888,779     $ 2,917,927

    Distributions                       (3,585)       (354,864)       (358,449)

    Net income                           2,542         251,625         254,167
                                      --------      ----------      ----------

Balance at September 30, 1996        $  28,105     $ 2,785,540     $ 2,813,645
                                      ========      ==========      ==========






         The financial information included herein has been prepared by
           management without audit by independent public accountants.

   The accompanying notes are an integral part of these financial statements.

                                        5

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                           PARKER & PARSLEY 88-B, L.P.
                        (A Delaware Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                         Nine months ended
                                                            September 30,
                                                       ----------------------
                                                          1996         1995
                                                       ---------    ---------
Cash flows from operating activities:

  Net income                                           $ 254,167    $  79,920
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depletion                                          156,356      261,201
      Loss on abandoned property                             951          -
  Changes in assets and liabilities:
      (Increase) decrease in accounts receivable         (13,740)      17,275
      Increase (decrease) in accounts payable             (9,489)      17,711
                                                        --------     --------
        Net cash provided by operating activities        388,245      376,107
                                                        --------     --------

Cash flows from investing activities:

  (Additions) deletions to oil and gas properties          3,805       (8,206)
  Proceeds from equipment salvage on abandoned
    property                                                  42          -
                                                        --------     ------
        Net cash provided by (used in) investing
          activities                                       3,847       (8,206)
                                                        --------     --------

Cash flows from financing activities:

  Cash distributions to partners                        (358,449)    (348,286)
                                                        --------     --------

Net increase in cash and cash equivalents                 33,643       19,615
Cash and cash equivalents at beginning of period         126,330       99,212
                                                        --------     --------
Cash and cash equivalents at end of period             $ 159,973    $ 118,827
                                                        ========     ========


         The financial information included herein has been prepared by
           management without audit by independent public accountants.

   The accompanying notes are an integral part of these financial statements.

                                        6

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                           PARKER & PARSLEY 88-B, L.P.
                        (A Delaware Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1996
                                   (Unaudited)


Note 1.

Parker  &  Parsley  88-B,  L.P.  (the  "Registrant")  is a  limited  partnership
organized in 1988 under the laws of the State of Delaware.

The Registrant  engages  primarily in oil and gas  development and production in
Texas and is not involved in any industry segment other than oil and gas.

Note 2.

In the opinion of management, the Registrant's unaudited financial statements as
of September 30, 1996 and for the three and nine months ended September 30, 1996
and  1995  include  all  adjustments  and  accruals  consisting  only of  normal
recurring accrual adjustments which are necessary for a fair presentation of the
results for the  interim  period.  These  interim  results  are not  necessarily
indicative of results for a full year.

Certain  information  and  footnote  disclosure  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.  The financial statements
should  be read in  conjunction  with the  financial  statements  and the  notes
thereto  contained  in the  Registrant's  Report on Form 10-K for the year ended
December 31, 1995, as filed with the Securities and Exchange Commission,  a copy
of which is  available  upon  request by writing to Steven L. Beal,  Senior Vice
President, 303 West Wall, Suite 101, Midland, Texas 79701.

Item 2.     Management's Discussion and Analysis of Financial Condition
              and Results of Operations (1)

Results of Operations

Nine months ended  September 30, 1996 compared with nine months ended  September
  30, 1995

Revenues:

The  Registrant's  oil and gas revenues  increased to $734,451 from $673,219 for
the nine months ended September 30, 1996 and 1995, respectively,  an increase of
9%. The increase in revenues  resulted from higher average  prices  received per
barrel of oil and mcf of gas, offset by a 9% decrease in barrels of oil produced
and sold and a 14% decrease in mcf of gas produced and sold. For the nine months
ended September 30, 1996, 27,480 barrels of oil were sold compared to 30,297 for
the same period in 1995, a decrease of 2,817 barrels.  For the nine months ended
September 30, 1996,  74,685 mcf of gas were sold compared to 86,576 for the same

                                        7

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period in 1995, a decrease of 11,891 mcf. The production  volume  decreases were
due to the decline  characteristics  of the Registrant's oil and gas properties.
Because of these characteristics, management expects a certain amount of decline
in  production  to continue in the future  until the  Registrant's  economically
recoverable reserves are fully depleted.

The average  price  received per barrel of oil  increased  $3.40,  or 20%,  from
$17.25  for the nine  months  ended  September  30,  1995 to $20.65 for the same
period in 1996 while the average  price  received per mcf of gas  increased  29%
from $1.74 during the nine months ended September 30, 1995 to $2.23 in 1996. The
market price for oil and gas has been extremely volatile in the past decade, and
management expects a certain amount of volatility to continue in the foreseeable
future.  The  Registrant may therefore sell its future oil and gas production at
average  prices lower or higher than that received  during the nine months ended
September 30, 1996.

Costs and Expenses:

Total  costs and  expenses  decreased  to  $486,106  for the nine  months  ended
September  30,  1996 as compared  to  $599,271  for the same  period in 1995,  a
decrease of $113,165,  or 19%.  This  decrease was due to declines in production
costs and depletion,  offset by increases in general and administrative expenses
("G&A"), loss on abandoned property and abandoned property costs.

Production  costs were $306,417 for the nine months ended September 30, 1996 and
$317,903 for the same period in 1995,  resulting in a $11,486  decrease,  or 4%.
The decrease was  primarily  due to  reductions  in well repair and  maintenance
costs.

G&A's  components are  independent  accounting and  engineering  fees,  computer
services,  postage and managing  general partner  personnel  costs.  During this
period, G&A increased,  in aggregate,  9% from $20,167 for the nine months ended
September  30,  1995 to $22,034  for the same  period in 1996.  The  Partnership
agreement limits G&A to 3% of gross oil and gas revenues.

Depletion was $156,356 for the nine months ended  September 30, 1996 compared to
$261,201 for the same period in 1995,  representing  a decrease of $104,845,  or
40%. This decrease was primarily  attributable to the following  factors:  (i) a
reduction  in the  Registrant's  net  depletable  basis  from  charges  taken in
accordance  with Financial  Accounting  Standards No. 121,  "Accounting  for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of"
("FAS 121"),  (ii) a reduction in oil  production  of 2,817 barrels for the nine
months  ended  September  30, 1996 as  compared to the same period in 1995,  and
(iii) an increase in oil and gas reserves  during the third quarter of 1996 as a
result of higher commodity prices.

A loss on abandoned property of $951 was recognized during the nine months ended
September  30, 1996.  This loss  resulted  from the  abandonment  of a saltwater
disposal well and the write-off of  associated  capitalized  well costs of $993,
less  proceeds  from  salvage of equipment of $42.  Costs  associated  with this

                                        8

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abandonment  totaled $348 during the nine months ended September 30, 1996. There
was no abandonment activity during the nine months ended September 30, 1995.

Three months ended September 30, 1996 compared with three months ended September
  30, 1995

Revenues:

The  Registrant's  oil and gas revenues  increased to $251,519 from $212,774 for
the three months ended September 30, 1996 and 1995, respectively, an increase of
18%. The increase in revenues  resulted from higher average prices  received per
barrel of oil and mcf of gas, offset by a 7% decrease in barrels of oil produced
and sold and a 10%  decrease  in mcf of gas  produced  and  sold.  For the three
months ended  September  30, 1996,  9,143  barrels of oil were sold  compared to
9,832 for the same  period in 1995,  a decrease  of 689  barrels.  For the three
months ended September 30, 1996,  26,453 mcf of gas were sold compared to 29,534
for the same period in 1995, a decrease of 3,081 mcf.  The  decreases in oil and
gas  produced  and  sold  were  due  to  the  decline   characteristics  of  the
Registrant's oil and gas properties.

The average  price  received per barrel of oil  increased  $4.88,  or 29%,  from
$16.55 for the three  months  ended  September  30,  1995 to $21.43 for the same
period in 1996,  while the average  price  received per mcf of gas increased 24%
from $1.69 during the three months ended September 30, 1995 to $2.10 in 1996.

Costs and Expenses:

Total costs and  expenses  decreased  to  $162,864  for the three  months  ended
September  30,  1996 as compared  to  $192,591  for the same  period in 1995,  a
decrease of $29,727,  or 15%.  This  decrease was due to a decline in depletion,
offset by increases in production costs, G&A and abandoned property costs.

Production costs were $109,127 for the three months ended September 30, 1996 and
$100,904 for the same period in 1995 resulting in a $8,223 increase,  or 8%. The
increase was primarily due to additional well repair and maintenance costs.

G&A's  components are  independent  accounting and  engineering  fees,  computer
services,  postage and managing  general partner  personnel  costs.  During this
period, G&A increased, in aggregate,  19% from $6,354 for the three months ended
September 30, 1995 to $7,546 for the same period in 1996.

Depletion was $46,174 for the three months ended  September 30, 1996 compared to
$85,333 for the same period in 1995, representing a decrease of $39,159, or 46%,
primarily  attributable  to  the  following  factors:  (i) a  reduction  in  the
Registrant's net depletable basis from charges taken in accordance with FAS 121,
(ii) a reduction  in oil  production  of 689 barrels for the three  months ended
September 30, 1996 as compared to the same period in 1995, and (iii) an increase
in oil and gas reserves  during the third  quarter of 1996 as a result of higher
commodity prices.

Abandoned  property  costs of $17 for the three months ended  September 30, 1996
resulted from the  abandonment  of one  saltwater  disposal  well.  There was no
abandonment activity during the three months ended September 30, 1996.

                                        9

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Liquidity and Capital Resources

Net Cash Provided by Operating Activities

Net cash  provided by operating  activities  increased  $12,138  during the nine
months ended  September 30, 1996 from the same period ended  September 30, 1995.
This increase was due to an increase in oil and gas sales, offset by an increase
in production costs paid.

Net Cash Provided by (Used in) Investing Activities

The Registrant's investing activities during the nine months ended September 30,
1996  included  $3,805 in  proceeds  received  from the  disposal of oil and gas
equipment  on active  properties.  The nine  months  ended  September  30,  1995
included  expenditures of $8,206 related to equipment replacement on various oil
and gas properties.

Net Cash Used in Financing Activities

Cash was  sufficient  for the nine  months  ended  September  30,  1996 to cover
distributions  to the partners of $358,449 of which $354,864 was  distributed to
the limited partners and $3,585 to the managing  general  partner.  For the same
period ended  September 30, 1995, cash was sufficient for  distributions  to the
partners of $348,286 of which $344,802 was  distributed to the limited  partners
and $3,484 to the managing general partner.

It is expected  that future net cash  provided by operating  activities  will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.

---------------

(1)    "Item 2. Management's  Discussion and Analysis of Financial Condition and
       Results of Operations"  contains forward looking  statements that involve
       risks and uncertainties. Accordingly, no assurances can be given that the
       actual  events and  results  will not be  materially  different  than the
       anticipated results described in the forward looking statements.


                           Part II. Other Information

None.


                                       10

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                           PARKER & PARSLEY 88-B, L.P.
                        (A Delaware Limited Partnership)



                               S I G N A T U R E S



       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.


                                      PARKER & PARSLEY 88-B, L.P.

                                 By:  Parker & Parsley Development L.P.,
                                       Managing General Partner

                                      By:  Parker & Parsley Petroleum USA, Inc.
                                            ("PPUSA"), General Partner




Dated:  November 11, 1996        By:  /s/ Steven L. Beal
                                      --------------------------------------
                                      Steven L. Beal, Senior Vice President
                                        and Chief Financial Officer of PPUSA



                                       11

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