SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(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, 2004
                                                 -------------
                                       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 0-16865
                                                -------

                 Nantucket Island Associates Limited Partnership
                 -----------------------------------------------
            (Exact name of small business issuer as specified in its
                                    charter)

               Delaware                                 04-2948435
    -------------------------------        ------------------------------------
    (State or other jurisdiction of        (I.R.S. Employer Identification No.)
    incorporation or organization)


   P.O. Box 9507, 7 Bulfinch Place,
         Suite 500, Boston, MA                           02114-9507
---------------------------------------                  ----------
(Address of principal executive office)                  (Zip Code)


 Registrant's telephone number, including area code    (617) 570-4600
                                                    ---------------------


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
                                      ---   ---

                                    1 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.

CONSOLIDATED BALANCE SHEETS



(IN THOUSANDS, EXCEPT UNIT DATA)
                                                                   JUNE 30, 2004    DECEMBER 31,
Assets                                                              (UNAUDITED)        2003
                                                                    -----------     -----------

Cash and cash equivalents                                           $       450     $     1,008
Accounts receivable                                                         254             138
Real estate tax escrow and other current assets                             853             752
                                                                    -----------     -----------
      Total current assets                                                1,557           1,898

Property and equipment, net of accumulated depreciation
   of $9,857 (2004) and $9,562 (2003)                                    16,650          16,463
Deferred rent receivable                                                    327             342
Deferred costs, net of accumulated amortization of
   $1,861 (2004) and $1,783 (2003)                                          575             653
                                                                    -----------     -----------
         Total assets                                               $    19,109     $    19,356
                                                                    ===========     ===========

LIABILITIES AND PARTNERS' (DEFICIT) EQUITY

Accounts payable and other liabilities                              $       444     $       580
Current maturity of long-term debt                                          177             162
Related party loan payable                                                  810               -
                                                                    -----------     -----------
      Total current liabilities                                           1,431             742

Long-term debt                                                           18,009          18,104
                                                                    -----------     -----------
         Total liabilities                                               19,440          18,846
                                                                    -----------     -----------
Commitments and contingencies

Partners' (deficit) equity:
      Limited partners equity; 785 units authorized,
      issued, and outstanding                                            10,801          11,600

      General partners' deficit                                         (11,132)        (11,090)
                                                                    -----------     -----------
         Total partners' (deficit) equity                                  (331)            510
                                                                    -----------     -----------
         Total liabilities and partners' (deficit) equity           $    19,109     $    19,356
                                                                    ===========     ===========


                See Notes to Consolidated Financial Statements.

                                    2 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(IN THOUSANDS, EXCEPT UNIT DATA)                    FOR THE SIX MONTHS ENDED
                                                 JUNE 30, 2004    JUNE 30, 2003
                                                 -------------    -------------
Revenue:

      Commercial rental operations               $       1,518    $       1,524
                                                 -------------    -------------

         Total revenue                                   1,518            1,524
                                                 -------------    -------------
Operating expenses:

      Commercial rental                                    299              311
      Real estate taxes                                    307              178
      Insurance                                            261              248
      Management and administrative                        218              212
      Legal and professional fees                           71              596
      Amortization                                          69               69
      Depreciation                                         295              303
                                                 -------------    -------------
         Total operating expenses                        1,520            1,917
                                                 -------------    -------------
Loss from operations                                        (2)            (393)
                                                 -------------    -------------
Other income (expense):
      Interest and other income                              1                4
      Interest expense                                    (840)            (852)
                                                 -------------    -------------
         Total other expense, net                         (839)            (848)
                                                 -------------    -------------
Net loss                                         $        (841)   $      (1,241)
                                                 =============    =============
Net loss allocated to general partner            $         (42)   $         (62)
                                                 =============    =============
Net loss allocated to limited partners           $        (799)   $      (1,179)
                                                 =============    =============
Net loss per limited partnership unit            $   (1,017.83)   $   (1,501.91)
                                                 =============    =============

                See Notes to Consolidated Financial Statements.

                                    3 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004


CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(IN THOUSANDS, EXCEPT UNIT DATA)                     FOR THE THREE MONTHS ENDED
                                                   JUNE 30, 2004   JUNE 30, 2003
                                                   -------------   -------------
Revenue:

      Commercial rental operations                  $       762     $       764
                                                    -----------     -----------

         Total revenue                                      762             764
                                                    -----------     -----------
Operating expenses:

      Commercial rental                                     168             168
      Real estate taxes                                     201              89
      Insurance                                             131             127
      Management and administrative                         111             106
      Legal and professional fees                            48             468
      Amortization                                           34              34
      Depreciation                                          147             151
                                                    -----------     -----------
         Total operating expenses                           840           1,143
                                                    -----------     -----------
Loss from operations                                        (78)           (379)
                                                    -----------     -----------
Other expense:
      Interest expense                                     (423)           (428)
                                                    -----------     -----------
Net loss                                            $      (501)    $      (807)
                                                    ===========     ===========
Net loss allocated to general partner               $       (25)    $       (40)
                                                    ===========     ===========
Net loss allocated to limited partners              $      (476)    $      (767)
                                                    ===========     ===========
Net loss per limited partnership unit               $   (606.37)    $   (977.07)
                                                    ===========     ===========

                See Notes to Consolidated Financial Statements.

                                    4 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004


CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT) (UNAUDITED)

(IN THOUSANDS, EXCEPT UNIT DATA)




                                  UNITS OF        INVESTOR
                                   LIMITED        LIMITED           GENERAL           TOTAL
                                 PARTNERSHIP     PARTNERS'         PARTNER'S        PARTNERS'
                                  INTEREST         EQUITY           DEFICIT     EQUITY (DEFICIT)
                                  --------         ------           -------     ----------------

Balance - January 1, 2004           785         $    11,600      $  (11,090)      $      510

      Net loss                        -                (799)            (42)            (841)
                                --------        -----------      ----------       ----------
Balance - June 30, 2004             785         $    10,801      $  (11,132)      $     (331)
                                ========        ===========      ==========       ==========


                See Notes to Consolidated Financial Statements.

                                    5 of 18


    NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)




(IN THOUSANDS)                                                    FOR THE SIX MONTHS ENDED
                                                              JUNE 30, 2004      JUNE 30, 2003
                                                              -------------      -------------

Cash Flows from Operating Activities:

Net loss                                                        $    (841)        $   (1,241)
Adjustments to reconcile net loss to net cash used in
 operating activities:
      Depreciation and amortization                                   374                382
      Deferred rent receivable                                         15                 (3)

Changes in assets and liabilities:
      Accounts receivable                                            (116)               145
      Real estate tax escrow and other current assets                (101)              (175)
      Accounts payable and other liabilities                         (136)              (581)
                                                                ---------         ----------
      Net cash used in operating activities                          (805)            (1,473)
                                                                ---------         ----------
Cash Flows from Investing Activities:

      Expenditures for property and equipment                        (483)               (28)
                                                                ---------         ----------
      Cash used in investing activities                              (483)               (28)
                                                                ---------         ----------
Cash Flows from Financing Activities:

      Proceeds from related party loan                                873                647
      Repayment of related party loan                                 (63)            (1,300)
      Principal payments on long-term debt                            (80)               (79)
                                                                ---------         ----------
      Net cash provided by (used in) financing activities             730               (732)
                                                                ---------         ----------
Net decrease in cash and cash equivalents                            (558)            (2,233)

Cash and cash equivalents, beginning of period                      1,008              2,613
                                                                ---------         ----------
Cash and cash equivalents, end of period                        $     450         $      380
                                                                =========         ==========
Supplemental Disclosure of Cash Flow Information -
      Cash paid for interest                                    $     841         $      872
                                                                =========         ==========


                See Notes to Consolidated Financial Statements.

                                    6 of 18



        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   GENERAL

     The accompanying financial statements, footnotes and discussions should be
     read in conjunction with the financial statements, related footnotes and
     discussions contained in the Partnership's Annual Report on Form 10-KSB for
     the year ended December 31, 2003.

     The financial information contained herein is unaudited. In the opinion of
     management, all adjustments necessary for a fair presentation of such
     financial information have been included. All adjustments are of a normal
     recurring nature. The balance sheet at December 31, 2003 was derived from
     audited financial statements at such date.

     The results of operations for the six months ended June 30, 2004 and 2003
     are not indicative of the results to be expected for the full year due to
     the seasonal nature of the Partnership's business.

2.   RELATED PARTY TRANSACTIONS

     The following transactions with affiliates of the General Partner were
     charged to expense during the six month periods ended June 30, 2004 and
     2003:

                                                     For the Six Months Ended
                                                             June 30,
                                                     ------------------------
                                                        2004          2003
                                                     -----------   ----------

Partnership administration fee                        $ 191,000     $ 180,000
Management fee                                           28,000        33,000
Reimbursement for administration expenses                27,000        27,000
Interest expense                                          7,000        16,000


     During the second quarter of 2004, the Partnership borrowed $873,000 from
     an affiliate of the General Partner, of which $63,000 was repaid during the
     second quarter of 2004, and an additional $505,000 was repaid during July
     2004. The loan bears interest at prime plus 3%. The General Partner or its
     affiliates may advance additional cash to fund operating deficits and
     capital expenditures in the future.

                                    7 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

        The matters discussed in this Form 10-QSB contain certain
        forward-looking statements and involve risks and uncertainties
        (including changing market conditions, competitive and regulatory
        matters, etc.) detailed in the disclosures contained in this Form 10-QSB
        and the other filings with the Securities and Exchange Commission made
        by the Registrant from time to time. The discussion of the Registrant's
        liquidity, capital resources and results of operations, including
        forward-looking statements pertaining to such matters, does not take
        into account the effects of any changes to the Registrant's operations.
        Accordingly, actual results could differ materially from those projected
        in the forward-looking statements as a result of a number of factors,
        including those identified herein.

        This item should be read in conjunction with financial statements and
        other items contained elsewhere in the report.

        Liquidity and Capital Resources

        The Registrant's primary source of liquidity is rental revenue from its
        investment properties. The Registrant requires cash to pay operating
        expenses, debt service payments and capital improvements. The level of
        liquidity based upon the Registrant's cash and cash equivalents
        experienced a decrease of $558,000 at June 30, 2004, as compared to
        December 31, 2003. The decrease in cash and cash equivalents consisted
        of $483,000 of cash used in investing activities and $805,000 of cash
        used in operating activities which was partially offset by $730,000 of
        cash provided by financing activities. Investing activities consisted of
        $483,000 of improvements to property and equipment. Financing activities
        consisted of a loan from a related party of $873,000 partially offset by
        $63,000 for the repayment of the related party note and $80,000 of
        principal payments on long-term debt. At June 30, 2004, the Registrant's
        cash balance was $450,000. The cash balance is primarily invested in
        money market accounts.

        As owner of the commercial properties along the wharf, the Registrant is
        responsible for maintaining the bulkheads. The Registrant anticipates
        spending approximately $4,000,000 to replace the bulkheads (the
        "Bulkhead Project"). Of this amount, the Registrant spent approximately
        $278,000 during 2003 for the soil borings and to purchase steel for
        Phase 1 of the Bulkhead Project. During the six months ended June 30,
        2004 , the Registrant spent $438,000 to continue Phase 1 of the Bulkhead
        Project. The Registrant expects to utilize cash flow from operations,
        cash reserves and by obtaining one or more loans from the General
        Partner or a third party to fund the remaining Bulkhead Project costs.
        During the second quarter of 2004, the Partnership borrowed $873,000
        from an affiliate of the General Partner, of which $63,000 was repaid
        during the second quarter of 2004, and an additional $505,000 was repaid
        during July 2004. The loan bears interest at prime plus 3%. The General
        Partner or its affiliates may advance additional cash to fund operating
        deficits and capital expenditures in the future.

        The Registrant received a letter from the U.S. Department of Justice
        ("DOJ") in 1998 relating to potential non-compliance with the American
        Disabilities Act (the "Act"). After review of the commercial properties
        compliance with the Act, the Registrant agreed that certain
        modifications are required and submitted a compliance study to the DOJ.
        Every year the Registrant has been making modifications to the
        properties in accordance with the compliance study. The General Partner
        does not believe these costs will have a material adverse effect on the
        Registrant.

                                    8 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

        Liquidity and Capital Resources (Continued)

        The Registrant's only significant critical accounting policy relates to
        the evaluation of the fair value of real estate. The Registrant
        evaluates the need for an impairment loss on its real estate assets when
        indicators of impairment are present and the undiscounted cash flows are
        not sufficient to recover the asset's carrying amount. The impairment
        loss is measured by comparing the fair value of the asset to its
        carrying amount. The evaluation of the fair value of real estate is an
        estimate that is susceptible to change and actual results could differ
        from those estimates.

        None of the recently issued accounting standards had any effect on the
        Registrant's consolidated financial statements.

        Results of Operations

        The Registrant experienced a net loss of $841,000 for the six months
        ended June 30, 2004, as compared to net loss of $1,241,000 for the six
        months ended June 30, 2003 primarily as a result of a decrease in
        operating expenses.

        Operating expenses decreased by $397,000 for the six months ended June
        30, 2004, as compared to 2003, primarily due to decreases in commercial
        rental expense of $12,000 and legal and professional fees of $525,000,
        which were partially offset by an increase in real estate taxes of
        $129,000 and an increase in insurance of $13,000. Legal and professional
        fees decreased by $525,000 due to the settlement of lawsuits in 2003.
        Insurance expense increased by $13,000 because of an increase in
        insurance premiums. Real estate taxes increased by $129,000 due to an
        increase in assessed value and a reimbursement to tenants from a prior
        year abatement.

        Interest income decreased by $3,000 due to lower interest rates and a
        decrease in cash available for investment. Interest expense decreased by
        $12,000 due to the amortization of the loan balance.

        The results of operations in future periods may differ from the results
        of operations for corresponding prior periods as weather conditions
        could adversely affect operating results due to the short seasonal
        nature of the business. Inflation and changing economic conditions could
        also affect occupancy levels, rental rates and operating expenses.


                                    9 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

        Quantitative and Qualitative Disclosures of Market Risk

        Interest Rate Risk

        The Registrant has one financial instrument that would expose it to
        market risk associated with the risk of loss arising from adverse
        changes in market rates and prices. The related party note payable has
        an interest rate of prime plus three percent (7% at June 30, 2004).
        Based on the outstanding balance at June 30, 2004, for every 1% increase
        in prime, the Registrant would pay an additional $8,100 in interest per
        year. The Registrant's mortgage loan requires interest payments based on
        a fixed rate (9.03% per annum). The Registrant does not believe that it
        has any risks related to derivative financial instruments.


ITEM 3. CONTROLS AND PROCEDURES

        The Registrant's management, with the participation of the Registrant's
        Chief Executive Officer and Chief Financial Officer, has evaluated the
        effectiveness of the Registrant's disclosure controls and procedures (as
        such term is defined in Rules 13a-15(e) under the Securities Exchange
        Act of 1934, as amended) as of the end of the period covered by this
        report. Based on such evaluation, the Registrant's Chief Executive
        Officer and Chief Financial Officer have concluded that, as of the end
        of such period, the Registrant's disclosure controls and procedures are
        effective.

        There have not been any changes in the Registrant's internal control
        over financial reporting (as defined in the Rule 13a - 15(f) under the
        Securities and Exchange Act of 1934, as amended) during the fiscal
        quarter to which this report relates that have materially affected, or
        are reasonably likely to materially affect, the Registrant's internal
        control over financial reporting.



                                    10 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.


        (a) Exhibits:

            Exhibits required by Item 601 of Regulation S-B are filed herewith
            and are listed in the attached Exhibit Index.

        (b) Reports of Form 8-K:

            No reports on Form 8-K were filed during the period ended June 30,
            2004.




                                    11 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004


                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                            BY: THREE WINTHROP PROPERTIES, INC.
                                                Managing General Partner




                                                BY: /s/ Michael L. Ashner
                                                    ----------------------------
                                                    Michael L. Ashner
                                                    Chief Executive Officer




                                                BY: /s/ Thomas Staples
                                                    ----------------------------
                                                    Thomas Staples
                                                    Chief Financial Officer



                                                Dated: August 16, 2004



                                    12 of 18


        NANTUCKET ISLAND ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

                            FORM 10-QSB JUNE 30, 2004

EXHIBIT INDEX




  Exhibit                                                                               Page No.
  -------                                                                               --------


  31.1     Chief Executive Officer's Certification, pursuant to Section 302 of the
           Sarbanes-Oxley Act of 2002.                                                  14 - 15

  31.2     Chief Financial Officer's Certification, pursuant to Section 302 of the
           Sarbanes-Oxley Act of 2002.                                                  16 - 17

    32     Certification of Chief Executive Officer and Chief Financial Officer,
           pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
           of the Sarbanes-Oxley Act of 2002.                                             18







                                    13 of 18