UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549


                            FORM 8-K


                         CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


 Date of Report (Date of earliest event reported)  May 15, 2008


          AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
      (Exact name of registrant as specified in its charter)


   State of Minnesota             000-29274         41-1789725
(State or other jurisdiction  (Commission File    (IRS Employer
   of incorporation)               Number)      Identification No.)


      30 East 7th Street, Suite 1300, St. Paul, Minnesota, 55101
             (Address of Principal Executive Offices)


                            (651) 227-7333
       (Registrant's telephone number, including area code)



  (Former name or former address, if changed since last report)

Check  the  appropriate  box below if  the  Form  8-K  filing  is
intended to simultaneously satisfy the filing obligation  of  the
registrant under any of the following provisions:

[ ]  Written  communication  pursuant  to  Rule  425  under  the
     Securities Act (17 CFR 230.425)
[ ]  Soliciting  material  pursuant to  Rule  14a-12  under  the
     Exchange Act (17 CFR 240.14a-12)
[ ]  Pre-commencement communications pursuant to  Rule  14d-2(b)
     under the Exchange Act
     (17 CFR 240.14d-2(b))
[ ]  Pre-commencement communications pursuant to  Rule  13e-4(c)
     under the Exchange Act
     (17 CFR 240.13e-4(c))


Section 2 - Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets.

       On  May  15, 2008, the Partnership sold a Johnny  Carino's
restaurant in Laredo, Texas to Healthfirst Real Estate III LP, an
unrelated  third  party.   The  Partnership  received  net   cash
proceeds  of  approximately 2,880,000  for  the  property,  which
resulted in a net gain of approximately $520,400.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

      (a) Financial statements  of  businesses  acquired  -   Not
          Applicable.

      (b) Pro  forma financial information - A limited number  of
          pro  forma  adjustments are required to illustrate  the
          effects  of  the transaction on the balance  sheet  and
          income  statement.  The following narrative description
          is  furnished  in  lieu  of the pro  forma  statements.
          Assuming  the  Partnership had  sold  the  property  on
          January 1, 2007:

          The Partnership's Investments in Real Estate would have
          been  reduced  by  $2,431,766 and  its  Current  Assets
          (cash) would have increased by $2,880,000 and Partners'
          Capital would have increased by $448,234.

          For  the  year  ended December 31,  2007,  Income  from
          Continuing  Operations would have  decreased  $161,649,
          representing a decrease in rental income of $220,714, a
          decrease  in  depreciation expense  of  $57,771  and  a
          decrease  in  property management expenses  of  $1,294.
          For  the three months ended March 31, 2008, Income from
          Discontinued  Operations would have decreased  $41,102,
          representing a decrease in rental income of $55,545,  a
          decrease in depreciation expense of $14,443.

          The  net  effect  of these pro forma adjustments  would
          have  caused Net Income to decrease from $2,128,783  to
          $1,967,134  and from $298,341 to $257,239, which  would
          have  resulted in Net Income of $85.43 and  $11.18  per
          Limited Partnership Unit outstanding for the year ended
          December 31, 2007 and the three months ended March  31,
          2008, respectively.

      (c) Shell company transactions - Not Applicable.

      (d) Exhibits.

          Exhibit 10.1 - Purchase Agreement dated March  3,  2008
          between the Partnership and Healthfirst Real Estate III
          LP  relating to the Property at 7603 San Dario  Avenue,
          Laredo,  Texas  (incorporated by reference  to  Exhibit
          10.1 of Form 10-Q filed May 14, 2008).


                           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 hereunto duly authorized.

                              AEI INCOME & GROWTH FUND XXI
                              LIMITED PARTNERSHIP

                              By: AEI Fund Management XXI, Inc.
                                 Its:  Managing General Partner

Date:  May 20, 2008           /s/ Patrick W Keene
                              By: Patrick W. Keene
                                 Its:  Chief Financial Officer
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UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                            FORM 8-K

                         CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 Date of Report (Date of earliest event reported)  May 15, 2008

          AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
      (Exact name of registrant as specified in its charter)

   State of Minnesota             000-29274         41-1789725
(State or other jurisdiction  (Commission File    (IRS Employer
   of incorporation)               Number)      Identification No.)

      30 East 7th Street, Suite 1300, St. Paul, Minnesota, 55101
             (Address of Principal Executive Offices)

                            (651) 227-7333
       (Registrant's telephone number, including area code)

  (Former name or former address, if changed since last report)

Check  the  appropriate  box below if  the  Form  8-K  filing  is
intended to simultaneously satisfy the filing obligation  of  the
registrant under any of the following provisions:

[ ]  Written  communication  pursuant  to  Rule  425  under  the
     Securities Act (17 CFR 230.425)
[ ]  Soliciting  material  pursuant to  Rule  14a-12  under  the
     Exchange Act (17 CFR 240.14a-12)
[ ]  Pre-commencement communications pursuant to  Rule  14d-2(b)
     under the Exchange Act
     (17 CFR 240.14d-2(b))
[ ]  Pre-commencement communications pursuant to  Rule  13e-4(c)
     under the Exchange Act
     (17 CFR 240.13e-4(c))

Section 2 - Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets.

       On  May  15, 2008, the Partnership sold a Johnny  Carino's
restaurant in Laredo, Texas to Healthfirst Real Estate III LP, an
unrelated  third  party.   The  Partnership  received  net   cash
proceeds  of  approximately 2,880,000  for  the  property,  which
resulted in a net gain of approximately $520,400.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

      (a) Financial statements  of  businesses  acquired  -   Not
          Applicable.

      (b) Pro  forma financial information - A limited number  of
          pro  forma  adjustments are required to illustrate  the
          effects  of  the transaction on the balance  sheet  and
          income  statement.  The following narrative description
          is  furnished  in  lieu  of the pro  forma  statements.
          Assuming  the  Partnership had  sold  the  property  on
          January 1, 2007:

          The Partnership's Investments in Real Estate would have
          been  reduced  by  $2,431,766 and  its  Current  Assets
          (cash) would have increased by $2,880,000 and Partners'
          Capital would have increased by $448,234.

          For  the  year  ended December 31,  2007,  Income  from
          Continuing  Operations would have  decreased  $161,649,
          representing a decrease in rental income of $220,714, a
          decrease  in  depreciation expense  of  $57,771  and  a
          decrease  in  property management expenses  of  $1,294.
          For  the three months ended March 31, 2008, Income from
          Discontinued  Operations would have decreased  $41,102,
          representing a decrease in rental income of $55,545,  a
          decrease in depreciation expense of $14,443.

          The  net  effect  of these pro forma adjustments  would
          have  caused Net Income to decrease from $2,128,783  to
          $1,967,134  and from $298,341 to $257,239, which  would
          have  resulted in Net Income of $85.43 and  $11.18  per
          Limited Partnership Unit outstanding for the year ended
          December 31, 2007 and the three months ended March  31,
          2008, respectively.

      (c) Shell company transactions - Not Applicable.

      (d) Exhibits.

          Exhibit 10.1 - Purchase Agreement dated March  3,  2008
          between the Partnership and Healthfirst Real Estate III
          LP  relating to the Property at 7603 San Dario  Avenue,
          Laredo,  Texas  (incorporated by reference  to  Exhibit
          10.1 of Form 10-Q filed May 14, 2008).

                           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 hereunto duly authorized.

                              AEI INCOME & GROWTH FUND XXI
                              LIMITED PARTNERSHIP

                              By: AEI Fund Management XXI, Inc.
                                 Its:  Managing General Partner

Date:  May 20, 2008           /s/ Patrick W Keene
                              By: Patrick W. Keene
                                 Its:  Chief Financial Officer