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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 June 30, 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 14.

<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  and
six month periods ended June 30, 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


                                                 June 30,      December 31,
                                                   2001            2000
                                                ---------      ------------
                                               (unaudited)

  Assets
  ------
Current assets:
 Cash and cash equivalents                    $     76,741        101,708
 Receivable from Managing General
  Partner                                          133,156        177,112
                                                 ---------      ---------
   Total current assets                            209,897        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                    3,695,058      3,673,058
                                                 ---------      ---------
   Net oil and gas properties                      438,438        460,438
                                                 ---------      ---------
                                              $    648,335        739,258
                                                 =========      =========
  Liabilities and Partners' Equity
  --------------------------------
Current liability - Distributions payable     $        115            199
                                                 ---------      ---------
Partners' equity:
 General partners                                   15,304         22,188
 Limited partners                                  632,916        716,871
                                                 ---------      ---------
   Total partners' equity                          648,220        739,059
                                                 ---------      ---------
                                              $    648,335        739,258
                                                 =========      =========

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

                         Statements of Operations
                               (unaudited)


                                 Three Months Ended      Six Months Ended
                                       June 30,              June 30,
                                    2001      2000        2001      2000
                                   -----     -----       -----     -----

  Revenues
  --------
Income from net profits
 interests                    $   117,517    191,433    347,149    375,070
Interest                            1,215      1,587      2,954      2,554
Miscellaneous income                    -         59          -         58
                                  -------    -------    -------    -------
                                  118,732    193,079    350,103    377,682
                                  -------    -------    -------    -------

  Expenses
  --------
General and administrative         19,779     22,608     38,943     42,043
Depreciation, depletion and
 amortization                      11,000      5,000     22,000     15,000
                                  -------    -------    -------    -------
                                   30,779     27,608     60,943     57,043
                                  -------    -------    -------    -------
Net income                    $    87,953    165,471    289,160    320,639
                                  =======    =======    =======    =======
Net income allocated to:

 Managing General Partner     $     8,906     15,342     28,004     30,207
                                  =======    =======    =======    =======
 General Partner              $       989      1,705      3,112      3,357
                                  =======    =======    =======    =======
 Limited Partners             $    78,058    148,424    258,044    287,075
                                  =======    =======    =======    =======
  Per limited partner unit    $     7.69      14.62       25.43      28.29
                                  =======    =======    =======    =======

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

                         Statements of Cash Flows
                               (unaudited)


                                                        Six Months Ended
                                                             June 30,
                                                          2001      2000
                                                         -----     -----
Cash flows from operating activities:

 Cash received from income from net
  profits interests                                 $   385,560    320,706
 Cash paid to suppliers                                (33,398)   (32,968)
 Interest received                                        2,954      2,554
                                                       --------   --------
  Net cash provided by operating activities             355,116    290,292
                                                       --------   --------
Cash flows used in financing activities:

 Distributions to partners                            (380,083)  (225,192)
                                                       --------   --------
Net (decrease) increase in cash and cash
 equivalents                                           (24,967)     65,100

 Beginning of period                                    101,708     65,039
                                                       --------   --------
 End of period                                      $    76,741    130,139
                                                       ========   ========

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

Net income                                          $   289,160    320,639

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

  Depreciation, depletion and amortization               22,000     15,000
  Decrease (increase) in receivables                     38,411   (54,422)
  Increase in payables                                    5,545      9,075
                                                        -------    -------
Net cash provided by operating activities           $   355,116    290,292
                                                        =======    =======

<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 June 30, 2001, and  for  the
     three  and  six  months  ended June 30, 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 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 does not  anticipate  performing
workovers during 2001.  The Partnership could possibly experience a  normal
decline of 8% to 10% 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 June 30, 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 June 30, 2001 and 2000

The  following  table  provides certain information  regarding  performance
factors for the quarters ended June 30, 2001 and 2000:

                                               Three Months
                                                  Ended          Percentage
                                                 June 30,         Increase
                                              2001       2000    (Decrease)
                                              ----       ----    ----------

Average price per barrel of oil          $    26.00      27.53     (6%)
Average price per mcf of gas             $     4.49       4.32       4%
Oil production in barrels                     9,700     10,200     (5%)
Gas production in mcf                        10,500     11,300     (7%)
Income from net profits interests        $  117,517    191,433    (39%)
Partnership distributions                $  130,000    125,000       4%
Limited partner distributions            $  117,000    112,500       4%
Per unit distribution to limited
 partners                                $    11.53      11.09       4%
Number of limited partner units              10,147     10,147

Revenues

The  Partnership's income from net profits interests decreased to  $117,517
from  $191,433 for the quarters ended June 30, 2001 and 2000, respectively,
a  decrease of 39%.  The principal factors affecting the comparison of  the
quarters ended June 30, 2001 and 2000 are as follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    decreased  during the quarter ended June 30, 2001 as  compared  to  the
    quarter ended June 30, 2000 by 6%, or $1.53 per barrel, resulting in  a
    decrease of approximately $14,800 in income from net profits interests.
    Oil sales represented 84% of total oil and gas sales during the quarter
    ended  June  30, 2001 as compared to 85% during the quarter ended  June
    30, 2000.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    increased  during the same period by 4%, or $.17 per mcf, resulting  in
    an  increase  of  approximately  $1,800  in  income  from  net  profits
    interests.

    The  net total decrease in income from net profits interests due to the
    change  in prices received from oil and gas production is approximately
    $13,000.   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 500 barrels or  5%  during  the
    quarter  ended June 30, 2001 as compared to the quarter ended June  30,
    2000,  resulting in a decrease of approximately $13,800 in income  from
    net profits interests.

    Gas  production decreased approximately 800 mcf or 7% during  the  same
    period, resulting in a decrease of approximately $3,500 in income  from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change in production is approximately $17,300.

3.  Lease  operating  costs  and  production  taxes  were  33%  higher,  or
    approximately $46,100 more during the quarter ended June  30,  2001  as
    compared  to  the quarter ended June 30, 2000.  The increase  in  lease
    operating  cost  is due to major repair and maintenance  on  one  lease
    being performed in 2001.

Costs and Expenses

Total costs and expenses increased to $30,779 from $27,608 for the quarters
ended  June  30,  2001  and 2000, respectively, an increase  of  11%.   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
    13%  or approximately $2,800 during the quarter ended June 30, 2001  as
    compared to the quarter ended June 30, 2000.

2.  Depletion expense increased to $11,000 for the quarter ended  June  30,
    2001  from  $5,000  for the same period in 2000.   This  represents  an
    increase  of 120%.  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 increase in depletion expense between the  comparative
    periods were the decrease in the price of oil and gas used to determine
    the Partnership's reserves for July 1, 2001 as compared to 2000.

<PAGE>
B.  General  Comparison of the Six Month Periods Ended June  30,  2001  and
    2000

The  following  table  provides certain information  regarding  performance
factors for the six month periods ended June 30, 2001 and 2000:

                                                Six Months
                                                  Ended          Percentage
                                                 June 30,         Increase
                                              2001       2000    (Decrease)
                                              ----       ----    ----------

Average price per barrel of oil          $    26.55     27.12       (2%)
Average price per mcf of gas             $     5.47      3.84        42%
Oil production in barrels                    19,800    20,200       (2%)
Gas production in mcf                        21,600    23,000       (6%)
Income from net profits interests        $  347,149   375,070       (7%)
Partnership distributions                $  380,000   225,000        69%
Limited partner distributions            $  342,000   202,500        69%
Per unit distribution to limited
 partners                                $    33.70     19.96        69%
Number of limited partner units              10,147    10,147

Revenues

The  Partnership's income from net profits interests decreased to  $347,149
from   $375,070  for  the  six  months  ended  June  30,  2001  and   2000,
respectively,  a  decrease  of  7%.  The principal  factors  affecting  the
comparison of the six months ended June 30, 2001 and 2000 are as follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    decreased during the six months ended June 30, 2001 as compared to  the
    six months ended June 30, 2000 by 2%, or $.57 per barrel, resulting  in
    a  decrease  of  approximately  $11,300  in  income  from  net  profits
    interests. Oil sales represented 82% of total oil and gas sales  during
    the  six  months ended June 30, 2001 as compared to 86% during the  six
    months ended June 30, 2000.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    increased during the same period by 42%, or $1.63 per mcf, resulting in
    an  increase  of  approximately $35,200  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
    $23,900.   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 400 barrels or 2% during the six
    months ended June 30, 2001 as compared to the six months ended June 30,
    2000,  resulting in a decrease of approximately $10,800 in income  from
    net profits interests.

    Gas  production decreased approximately 1,400 mcf or 6% during the same
    period, resulting in a decrease of approximately $5,400 in income  from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change in production is approximately $16,200.

3.  Lease  operating  costs  and  production  taxes  were  14%  higher,  or
    approximately $35,700 more during the six months ended June 30, 2001 as
    compared to the six months ended June 30, 2000.

Costs and Expenses

Total  costs  and expenses increased to $60,943 from $57,043  for  the  six
months ended June 30, 2001 and 2000, respectively, an increase of 7%.   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 7%
    or  approximately $3,100 during the six months ended June 30,  2001  as
    compared to the six months ended June 30, 2000.

2.  Depletion  expense increased to $22,000 for the six months  ended  June
    30, 2001 from $15,000 for the same period in 2000.  This represents  an
    increase  of 47%.  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 increase in depletion expense between the  comparative
    periods were the decrease in the price of oil and gas used to determine
    the  Partnership's reserves for July 1, 2001 as compared to  2000,  and
    the increase in oil and gas revenues received by the Partnership during
    2001 as compared to 2000.

<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 $355,100  in
the six months ended June 30, 2001 as compared to approximately $290,300 in
the  six  months ended June 30, 2000.  The primary source of the 2001  cash
flow from operating activities was profitable operations.

Cash flows used in financing activities were approximately $380,100 in  the
six months ended June 30, 2001 as compared to approximately $225,200 in the
six  months  ended June 30, 2000. The only use in financing activities  was
the distributions to partners.

Total distributions during the six months ended June 30, 2001 were $380,000
of  which  $342,000 was distributed to the limited partners and $38,000  to
the general partners.  The per unit distribution to limited partners during
the  six months ended June 30, 2001 was $33.70. Total distributions  during
the  six  months  ended June 30, 2000 were $225,000 of which  $202,500  was
distributed  to  the limited partners and $22,500 to the general  partners.
The  per unit distribution to limited partners during the six months  ended
June 30, 2000 was $19.96.

The  sources  for  the  2001 distributions of $380,000  were  oil  and  gas
operations of approximately $355,100, with the balance from available  cash
on  hand  at  the  beginning  of  the period.   The  source  for  the  2000
distributions  of  $225,000  was oil and gas  operations  of  approximately
$290,300.

Since  inception of the Partnership, cumulative monthly cash  distributions
of  $6,791,823  have  been made to the partners.   As  of  June  30,  2001,
$6,133,125 or $604.43 per limited partner unit has been distributed to  the
limited partners, representing a 121% return of the capital contributed.

As  of June 30, 2001, the Partnership had approximately $209,800 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 ended June 30, 2001.

<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: August 15, 2001

<PAGE>