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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, 1998

                                    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, 1997 which are found in the Registrant's  Form
10-K  Report  for  1997 filed with the Securities and Exchange  Commission.
The December 31, 1997 balance sheet included herein has been taken from the
Registrant's  1997 Form 10-K Report.  Operating results for the  three  and
six month periods ended June 30, 1998 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,
                                                   1998            1997
                                                ---------      ------------
                                               (unaudited)

  Assets

Current assets:
 Cash and cash equivalents                   $     14,053           3,347
 Receivable from Managing General Partner          52,734         122,681
 Other receivable                                       -          47,829
                                                ---------       ---------
    Total current assets                           66,787         173,857
                                                ---------       ---------
Oil and gas properties - using the
 full cost method of accounting                 4,143,478       4,147,890
  Less accumulated depreciation,
   depletion and amortization                   3,195,434       3,102,434
                                                ---------       ---------
    Net oil and gas properties                    948,044       1,045,456
                                                ---------       ---------
                                             $  1,014,831       1,219,313
                                                =========       =========
  Liabilities and Partners' Equity

Current liability - Distributions payable    $        134             112
                                                ---------       ---------
Partners' equity:
 General partners                                   1,775          11,093
 Limited partners                               1,012,922       1,208,108
                                                ---------       ---------
    Total partners' equity                      1,014,697       1,219,200
                                                ---------       ---------
                                             $  1,014,831       1,219,313
                                                =========       =========

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

                         Statements of Operations
                               (unaudited)


                                 Three Months Ended      Six Months Ended
                                       June 30,              June 30,
                                    1998      1997        1998      1997

  Revenues

Income from net profits
 interests                    $    49,840    176,677    141,173    336,063
Interest                              822        407      1,633        896
                                  -------    -------    -------    -------
                                   50,662    177,084    142,806    336,959
                                  -------    -------    -------    -------

  Expenses

General and administrative         21,592     18,698     48,990     44,427
Depreciation, depletion and
 amortization                      51,000     23,000     93,000     46,000
                                  -------    -------    -------    -------
                                   72,592     41,698    141,990     90,427
                                  -------    -------    -------    -------
Net income (loss)             $  (21,930)    135,386        816    246,532
                                  =======    =======    =======    =======
Net income (loss) allocated to:

 Managing General Partner     $     2,616     14,255      8,443     26,328
                                  =======    =======    =======    =======
 General Partner              $       291      1,584        939      2,925
                                  =======    =======    =======    =======
 Limited Partners             $  (24,837)    119,547    (8,566)    217,279
                                  =======    =======    =======    =======
  Per limited partner unit    $    (2.45)      11.78      (.84)      21.41
                                  =======    =======    =======    =======

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

                         Statements of Cash Flows
                               (unaudited)


                                                        Six Months Ended
                                                             June 30,
                                                          1998      1997

Cash flows from operating activities:

 Cash received from income from net
  profits interests                                 $   192,267    397,802
 Cash paid to suppliers                                (30,137)   (43,920)
 Interest received                                        1,633        896
                                                       --------   --------
  Net cash provided by operating activities             163,763    354,778
                                                       --------   --------
Cash flows provided by investing activities:

 Cash received from sale of oil and gas
  properties                                             52,241          -
                                                       --------   --------
Cash flows used in financing activities:

 Distributions to partners                            (205,298)  (362,127)
                                                       --------   --------

Net increase (decrease) in cash and cash
 equivalents                                             10,706    (7,349)

 Beginning of period                                      3,347     29,317
                                                       --------   --------
 End of period                                      $    14,053     21,968
                                                       ========   ========

                                                               (continued)

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

                   Statements of Cash Flows, continued
                               (unaudited)


                                                        Six Months Ended
                                                             June 30,
                                                          1998      1997

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

Net income                                          $       816    246,532

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

  Depreciation, depletion and amortization               93,000     46,000
  Decrease in receivables                                51,094     61,739
  Increase in payables                                   18,853        507
                                                        -------    -------
Net cash provided by operating activities           $   163,763    354,778
                                                        =======    =======

<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  the  next  two years.  The Partnership  may  undergo  an
increase  later  in  1998.   Thereafter,  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, 1998, the net capitalized costs  did  not
exceed the estimated present value of oil and gas reserves.  A continuation
of the oil price environment experienced during the first half of 1998 will
have  an adverse affect on the Company's revenues and operating cash  flow.
Also,  further declines in oil prices could result in additional  decreases
in the carrying value of the Company's oil and gas properties.



<PAGE>
Results of Operations

A.  General Comparison of the Quarters Ended June 30, 1998 and 1997

The  following  table  provides certain information  regarding  performance
factors for the quarters ended June 30, 1998 and 1997:

                                               Three Months
                                                  Ended          Percentage
                                                 June 30,         Increase
                                              1998       1997    (Decrease)
                                              ----       ----    ----------

Average price per barrel of oil          $    13.06      19.11    (32%)
Average price per mcf of gas             $     2.04       2.78    (27%)
Oil production in barrels                    12,000     13,100     (8%)
Gas production in mcf                        10,500     14,000    (25%)
Income from net profits interests        $   49,840    176,677    (72%)
Partnership distributions                $   67,000    160,000    (58%)
Limited partner distributions            $   60,300    144,000    (58%)
Per unit distribution to limited
 partners                                $     5.94      14.19    (58%)
Number of limited partner units              10,147     10,147

Revenues

The  Partnership's income from net profits interests decreased  to  $49,840
from  $176,677 for the quarters ended June 30, 1998 and 1997, respectively,
a  decrease of 72%.  The principal factors affecting the comparison of  the
quarters ended June 30, 1998 and 1997 are as follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    decreased  during the quarter ended June 30, 1998 as  compared  to  the
    quarter ended June 30, 1997 by 32%, or $6.05 per barrel, resulting in a
    decrease of approximately $79,300 in income from net profits interests.
    Oil sales represented 88% of total oil and gas sales during the quarter
    ended  June  30, 1998 as compared to 87% during the quarter ended  June
    30, 1997.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    decreased during the same period by 27%, or $.74 per mcf, resulting  in
    a  decrease  of  approximately  $10,400  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
    $89,700.   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 8% during  the
    quarter  ended June 30, 1998 as compared to the quarter ended June  30,
    1997,  resulting in a decrease of approximately $14,400 in income  from
    net profits interests.

    Gas production decreased approximately 3,500 mcf or 25% during the same
    period, resulting in a decrease of approximately $7,100 in income  from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change  in  production  is  approximately  $21,500.   The  decrease  is
    primarily attributable to a gas plant explosion, which decreased  mcf's
    on several wells for the month of April.

3.  Lease  operating  costs  and  production  taxes  were  14%  higher,  or
    approximately $15,800 more during the quarter ended June  30,  1998  as
    compared to the quarter ended June 30, 1997.

Costs and Expenses

Total costs and expenses increased to $72,592 from $41,698 for the quarters
ended  June  30,  1998  and 1997, respectively, an increase  of  74%.   The
increase  is  the result of higher general and administrative  expense  and
depletion 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
    15%  or approximately $2,900 during the quarter ended June 30, 1998  as
    compared to the quarter ended June 30, 1997.

2.  Depletion expense increased to $51,000 for the quarter ended  June  30,
    1998  from  $23,000  for the same period in 1997.  This  represents  an
    increase  of 122%.  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  was  the  decrease in the price of oil used to  determine  the
    Partnership's reserves for January 1, 1998 as compared to 1997.

<PAGE>
B.  General  Comparison of the Six Month Periods Ended June  30,  1998  and
    1997

The  following  table  provides certain information  regarding  performance
factors for the six month periods ended June 30, 1998 and 1997:

                                                Six Months
                                                  Ended          Percentage
                                                 June 30,         Increase
                                              1998       1997    (Decrease)
                                              ----       ----    ----------

Average price per barrel of oil          $    13.91     20.17      (31%)
Average price per mcf of gas             $     2.13      2.61      (18%)
Oil production in barrels                    25,300    25,100         1%
Gas production in mcf                        24,600    28,100      (12%)
Income from net profits interests        $  141,173   336,063      (58%)
Partnership distributions                $  205,320   362,000      (43%)
Limited partner distributions            $  186,620   325,800      (43%)
Per unit distribution to limited
 partners                                $    18.39     32.11      (43%)
Number of limited partner units              10,147    10,147

Revenues

The  Partnership's income from net profits interests decreased to  $141,173
from   $336,063  for  the  six  months  ended  June  30,  1998  and   1997,
respectively,  a  decrease  of 58%.  The principal  factors  affecting  the
comparison of the six months ended June 30, 1998 and 1997 are as follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    decreased during the six months ended June 30, 1998 as compared to  the
    six  months ended June 30, 1997 by 31%, or $6.26 per barrel,  resulting
    in  a  decrease  of approximately $157,100 in income from  net  profits
    interests.  Oil sales represented 87% of total oil and gas sales during
    the six months ended June 30, 1998 and 1997.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    decreased during the same period by 18%, or $.48 per mcf, resulting  in
    a  decrease  of  approximately  $13,500  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
    $170,600.  The market price for oil and gas has been extremely volatile
    over  the  past  decade, and management expects  a  certain  amount  of
    volatility to continue in the foreseeable future.

<PAGE>
2.  Oil production increased approximately 200 barrels or 1% during the six
    months ended June 30, 1998 as compared to the six months ended June 30,
    1997,  resulting in an increase of approximately $2,800 in income  from
    net profits interests.

    Gas production decreased approximately 3,500 mcf or 12% during the same
    period, resulting in a decrease of approximately $7,500 in income  from
    net profits interests.

    The  net total decrease in income from net profits interests due to the
    change in production is approximately $4,700.

3.  Lease  operating  costs  and  production  taxes  were  8%  higher,   or
    approximately $19,600 more during the six months ended June 30, 1998 as
    compared to the six months ended June 30, 1997.

Costs and Expenses

Total  costs  and expenses increased to $141,990 from $90,427 for  the  six
months ended June 30, 1998 and 1997, respectively, an increase of 57%.  The
increase  is  the result of higher general and administrative  expense  and
depletion 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
    10%  or approximately $4,600 during the six months ended June 30,  1998
    as compared to the six months ended June 30, 1997.

2.  Depletion  expense increased to $93,000 for the six months  ended  June
    30, 1998 from $46,000 for the same period in 1997.  This represents  an
    increase  of 102%.  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 used to  determine  the
    Partnership's reserve for January 1, 1998 as compared to 1997.

<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 $163,800  in
the six months ended June 30, 1998 as compared to approximately $354,800 in
the  six  months ended June 30, 1997.  The primary source of the 1998  cash
flow from operating activities was profitable operations.

Cash  flows provided by investing activities were approximately $52,200  in
the  six months ended June 30, 1998.  There were no cash flows provided  by
investing activities in the six months ended June 30, 1997.

Cash flows used in financing activities were approximately $205,300 in  the
six months ended June 30, 1998 as compared to approximately $362,100 in the
six  months ended June 30, 1997.  The only use in financing activities  was
the distributions to partners.

Total distributions during the six months ended June 30, 1998 were $205,320
of  which  $186,620 was distributed to the limited partners and $18,700  to
the general partners.  The per unit distribution to limited partners during
the  six months ended June 30, 1998 was $18.39.  Total distributions during
the  six  months  ended June 30, 1997 were $362,000 of which  $325,800  was
distributed  to  the limited partners and $36,200 to the general  partners.
The  per unit distribution to limited partners during the six months  ended
June 30, 1997 was $32.11.

The  sources  for  the  1998 distributions of $205,320  were  oil  and  gas
operations of approximately $163,800 and the sale of oil and gas properties
of  $52,200,  resulting  in  excess cash for  contingencies  or  subsequent
distributions.  The source for the 1997 distributions of $362,000  was  oil
and  gas  operations  of  approximately $354,800,  with  the  balance  from
available cash on hand at the beginning of the period.

Since  inception of the Partnership, cumulative monthly cash  distributions
of  $5,546,435  have  been made to the partners.   As  of  June  30,  1998,
$5,012,061 or $493.95 per limited partner unit has been distributed to  the
limited partners, representing a 99% return of the capital contributed.

As  of  June 30, 1998, the Partnership had approximately $66,700 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.

Information Systems for the Year 2000

The  Managing  General Partner provides all data processing  needs  of  the
Partnership.   The Managing General Partner has reviewed and evaluated  its
information  systems  to determine if its systems accurately  process  data
referencing   the   year   2000.   Primarily  all   necessary   programming
modifications  to  correct year 2000 referencing in  the  Managing  General
Partners  internal accounting and operating systems have been made to-date.
However  the  Managing General Partner has not completed its evaluation  of
its vendors and suppliers systems to determine the effect, if any, the non-
compliance  of  such systems would have on the operation  of  the  Managing
General Partnership or the operations of the Partnership.

<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)  Exhibits:

                27 Financial Data Schedule

                (b)    Reports on Form 8-K:

                       No reports on Form 8-
                K were filed during the quarter ended June 30, 1998.

<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, 1998

<PAGE>