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

                                    FORM 10-K/A

(Mark One)

[XX]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended  December 31, 1995
                         ------------------------------------------------------
                                      OR

[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ____________________________ to ________________
                              
Commission file number    0-16512
                      ---------------------------------------------------------

               American Income Partners III-B Limited Partnership
- -------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

 Massachusetts                                      04-2968859
- ----------------------------------------------     ----------------------------
(State or other jurisdiction of                    (IRS Employer
 incorporation or organization)                     Identification No.)

 98 N. Washington St., Fifth Floor, Boston, MA      02114
- ----------------------------------------------     ----------------------------
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code     (617) 854-5800
                                                  ----------------------------- 
Securities registered pursuant to Section 12(b) of the Act         NONE
                                                          --------------------- 

  Title of each class                Name of each exchange on which registered

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

Securities registered pursuant to Section 12(g) of the Act:

           1,127,330 Units Representing Limited Partnership Interest
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                               (Title of class)

- --------------------------------------------------------------------------------
                               (Title of class)

       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   XX    No
                                               ----      ----

       State the aggregate market value of the voting stock held by
nonaffiliates of the registrant. Not applicable. Securities are nonvoting for
this purpose. Refer to Item 12 for further information.

                      DOCUMENTS INCORPORATED BY REFERENCE
      Portions of the Registrant's Annual Report to security holders for
               the year ended December 31, 1995 (Part I and II)

 
PART IV

 

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
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       (a)  Documents filed as part of this report:

            (1)       Financial Statements:

                      Report of Independent Auditors...................................................................*

                      Statement of Financial Position
                      at December 31, 1995 and 1994....................................................................*

                      Statement of Operations
                      for the years ended December 31, 1995, 1994 and 1993.............................................*

                      Statement of Changes in Partners' Capital
                      for the years ended December 31, 1995, 1994 and 1993.............................................*

                      Statement of Cash Flows
                      for the years ended December 31, 1995, 1994 and 1993.............................................*

                      Notes to the Financial Statements................................................................*

            (2)       Financial Statement Schedules:

                      None required.

            (3)       Exhibits:

                      Except as set forth below, all Exhibits to Form 10-K, as
                      set forth in Item 601 of Regulation S-K, are not
                      applicable.
 

       Exhibit
       Number
     ---------- 
        4             Amended and Restated Agreement and Certificate of Limited
                      Partnership included as Exhibit A to the Prospectus which
                      is included in Registration Statement on Form S-1 (No. 33-
                      11160).

       13             The 1995 Annual Report to security holders, a copy of
                      which is furnished for the information of the Securities
                      and Exchange Commission. Such Report, except for those
                      portions thereof which are incorporated herein by
                      reference, is not deemed "filed" with the Commission.

       23             Consent of Independent Auditors.

       99  (a)        Lease agreement with Northwest Airlines, Inc. was filed in
                      the Registrant's Annual Report on Form 10-K for the year
                      ended December 31, 1991 as Exhibit 28 (b) and is
                      incorporated herein by reference.



*  Incorporated herein by reference to the appropriate portion of the 1995
   Annual Report to security holders for the year ended December 31, 1995. (See
   Part II)

 
       Exhibit
       Number
     ----------
       99  (b)        Lease agreement with Bally's Health and Tennis Corporation
                      was filed in the Registrant's Annual Report on Form 10-K
                      for the year ended December 31, 1993 as Exhibit 28 (d) and
                      is incorporated herein by reference.

       99  (c)        Lease agreement with Equicor, Inc. was filed in the
                      Registrant's Annual Report on Form 10-K for the year ended
                      December 31, 1993 as Exhibit 28 (e) and is incorporated
                      herein by reference.

       99  (d)        Lease agreement with Contract Transportation Systems Co.
                      is filed in the Registrant's Annual Report on Form 10-K
                      for the year ended December 31, 1995 and is included
                      herein.

       99  (e)        Lease agreement with The Denver and Rio Grande Western
                      Railroad is filed in the Registrant's Annual Report on
                      Form 10-K for the year ended December 31, 1995 and is
                      included herein.

       99  (f)        Lease agreement with ING Aviation Lease is filed in the
                      Registrant's Annual Report on Form 10-K for the year ended
                      December 31, 1995 and is included herein.


     (b)  Reports on Form 8-K

     None.

 
                                  SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below on behalf of the registrant and in the
capacity and on the date indicated.


              AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP


                    By: AFG Leasing Incorporated,
                    a Massachusetts corporation and the
                    Managing General Partner of the Registrant.





By:  /s/ Geoffrey A. MacDonald                     By: /s/ Gary D. Engle
   -----------------------------                      -----------------------
Geoffrey A. MacDonald                              Gary D. Engle
Chief Executive Officer,                           President, Chief Operating
Chairman, and a member of the                      Officer and member of the
Executive Committee of AFG and                     Executive Committee of AFG
President and a Director of the                    (Principal Financial Officer)
Managing General Partner
(Principal Executive Officer)



Date:    April 9, 1996                             Date:   April 9, 1996
     ---------------------------                        ---------------------



By:  /s/ Gary M. Romano
   -----------------------------
Gary M. Romano
Vice President and Controller
of AFG and Clerk of the Managing General
Partner
(Principal Accounting Officer)



Date:    April 9, 1996
     ---------------------------