[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

(Exact name of registrant as specified in its charter

Registrant's telephone number, including area code: 630-218-8000

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

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

LIMITED PARTNERSHIP UNITS

(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 _X_ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

State the aggregate market value of the voting stock held by nonaffiliates of the registrant. Not applicable.

The Prospectus of the Registrant dated August 4, 1988, as supplemented and filed pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is incorporated by reference in Parts I, II and III of this Annual Report on Form 10-K.

Indicate by a checkmark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2)          __ Yes           X  No

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

TABLE OF CONTENTS

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PART I

Item 1. Business

Inland Monthly Income Fund II, L.P. was formed on June 20, 1988, to invest in improved residential, retail, industrial and other income producing properties. On August 4, 1988, we commenced an offering of 50,000 limited partnership units (subject to an increase of up to 30,000 additional units) pursuant to a Registration under the Securities Act of 1933. The offering terminated on August 4, 1990, after we had sold 50,647.14 units at $500 per unit, resulting in gross offering proceeds of $25,323,569, not including the general partner's contribution of $500. All of the holders of our units were admitted to our partnership. Inland Real Estate Investment Corporation is our general partner. We acquired five properties utilizing $21,224,542 of capital proceeds collected. On January 8, 1991, we sold one of our properties, The Wholesale Club. On November 30, 1999, we sold another of our properties, Eurofresh Plaza. Our limited partners share in their portion of benefits of ownership of our real property invest ments according to the number of units held. We repurchased 551.64 units for $260,285 from various limited partners through the unit repurchase program. There are no funds remaining for the repurchase of units through this program.

We are engaged in the business of real estate investment which management considers being a single operating segment. A presentation of information about operating segments would not be material to an understanding of our business taken as a whole.

We acquired fee ownership of the following real property investments:

*The Kmart Corporation filed for Chapter 11 bankruptcy reorganization on January 22, 2002. As a result thereof, Kmart had the option to accept or reject our lease. On March 8, 2002, Kmart Corporation announced its intent to close 283 stores, including the Chandler, Arizona store. The Bankruptcy Court approved these closings on March 20, 2002, as well as the liquidation procedures. As of June 29, 2002, Kmart rejected their lease for the Chandler, Arizona property and ceased making rent payments. The general partner filed a lease rejection claim with the bankruptcy court on our behalf. The general partner believes that the current rent at $5.37 per square foot is lower than market, and therefore, the space should be leasable to new tenants. It is the intent of the general partner to use its best efforts to lease this space. Commissions, concessions and tenant improvements may be required to obtain or attract replacement tenants.

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We have utilized our offering proceeds to acquire properties. The leases at certain of our properties entitled us to participate in gross receipts of lessees above fixed minimum amounts. Our receipt of such amounts depended in part on the ability of those lessees to compete with similar businesses in their respective vicinities. As of December 31, 2002, there are no such leases.

We also compete with many other entities engaged in real estate investment activities in the disposition of property. The ability to locate purchasers for the properties will depend primarily on the operations of the properties and the desirability of the locations of the operating properties.

Our real property investments are subject to competition from similar types of properties in the vicinity in which each is located. Approximate occupancy levels for the properties are set forth on a year-end basis in the table in Item 2 below to which reference is hereby made. Our real property investments are located in Arizona, Illinois and Ohio. We have no real property investments located outside the United States. We do not segregate revenues or assets by geographic region, and such a presentation would not be material to an understanding of our business taken as a whole.

The following is a list of our significant net operating leases and the revenues from those leases as a percent of our gross income.

Elite, the tenant of the Colonial Manor Nursing Home, made the deferred rental payment which was due on February 1, 2001. The general partner and Elite entered into a revised ten-year lease, which began as of July 1, 2001. Under the new lease, Elite received a five-month rent abatement with the first payment due on December 1, 2001 and a 17% reduction in the annual rent. Effective March 1, 2003, due to economic conditions in the nursing home industry, the lease for the property has been amended to reduce the rent to $666,855 per year and to eliminate the increase in rent over the term of the lease.

The general partner has executed an amendment of the health club lease through September 30, 2013. Annual base rent will increase from $359,094 to $383,231 per year commencing April 1, 2003. As part of the extension, we will advance $400,000 for tenant improvements and equipment at the property.

We had no employees during 2002.

Our general partner and its affiliates provide services to us. The general partner and its affiliates are reimbursed for salaries and expenses of employees of the general partner and its affiliates relating to the administration of the partnership. An affiliate of the general partner receives a property management fee for management and leasing services relating to our properties.

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Item 2. Properties

We own directly the properties referred to in Item 1 to which reference is hereby made for a description of said properties.

The following is a list of approximate occupancy levels for our investment properties as of the end of each of the last five years. N/A indicates the property was not owned by us at the end of the year.

The following is a list of average effective annual rents per square foot for our investment properties for each of the last five years. N/A indicates the property was not owned by us at the end of the year.

* Effective annual rent as of the termination of the lease.

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The following tables set forth certain information with respect to the amount and expiration of leases for our investment properties as of December 31, 2002:

1. No assumptions have been made regarding the releasing of expired leases. It is the opinion of the general partner that the space will be released at market prices.
2. The general partner has executed an amendment of the health club lease through September 30, 2013. Annual base rent will increase from $359,094 to $383,231 per year commencing April 1, 2003. As part of the extension, we will advance $400,000 for tenant improvements and equipment at the property. The modification of this lease is included in the table above.
3. The general partner has executed an amendment to the Elite lease to reduce the annual rent to $666,855 per year with no increases in rent over the term of the lease. The modification of this lease is included in the table above.

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Item 3. Legal Proceedings

We are not subject to any material pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of our security holders during 2002.

PART II

Item 5. Market for the Partnership's limited partnership Units and Related Security Holder Matters

As of December 31, 2002, there were 1,952 holders of our units. There is no public market for units nor is it anticipated that any public market for units will develop. Reference is made to Item 6 below for a discussion of cash distributions made to the limited partners.

Although we have established a unit repurchase program, there are no funds remaining for the repurchase of units through this program.

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Item 6. Selected Financial Data

INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

For the years ended December 31, 2002, 2001, 2000, 1999, and 1998

(not covered by Independent Auditors' Report)

1. The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this annual report.
2. The net income per unit and distribution per unit data is based upon the weighted average number of units outstanding of 50,095.50.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this annual report on Form 10-K constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These factors include, among other things, competition for tenants; federal, state, or local regulations; adverse changes in general economic or local conditions; uninsured losses; and potential conflicts of interest between us and our Affiliates, including the general partner.

Liquidity and Capital Resources

On August 4, 1988, we commenced an offering of 50,000 (subject to increase to 80,000) limited partnership units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 4, 1990, after we had sold 50,647.14 units at $500 per unit, resulting in gross offering proceeds of $25,323,569, not including the general partner's contribution of $500. All of the holders of these units have been admitted to our partnership. We acquired five properties utilizing $21,224,542 of capital proceeds collected. On January 8, 1991, we sold one of our properties, The Wholesale Club. On November 30, 1999, we sold another of our properties, Eurofresh Plaza. As of December 31, 2002, cumulative distributions to limited partners totaled $29,309,086; of which $4,395,565 represents proceeds from the sale of The Wholesale Club, $2,392,818 represents proceeds from the sale of Eurofresh Plaza and $22,520,703 represents distributable cash flow from the properties. We repurchase d 551.64 units for $260,285 from various limited partners through the unit repurchase program. There are no funds remaining for the repurchase of Units through this program.

As of December 31, 2002, we had cash and cash equivalents of $1,356,342 which includes approximately $370,000 held in an unrestricted escrow account for the payment of real estate taxes for Colonial Manor Living Center. We intend to use such remaining funds for distributions and for working capital requirements.

As of December 31, 2002, we have made cumulative distributions of $253,868 in addition to the 8% annualized return to the limited partners from excess cash flow. Through June 30, 2002, the properties owned by us were generating cash flow in excess of the 8% annualized distributions to the limited partners (paid monthly), in addition to covering all our operating expenses. As a result of the termination of the Kmart lease on June 29, 2002, we reduced the annualized return to the limited partners to 5%, beginning in July 2002. In December 2002, the general partner temporarily suspended distributions to the limited partners due to uncertainty of the Elite and SHS leases and re-tenanting costs anticipated with the Kmart property. To the extent that the cash flow from the properties is insufficient to meet our needs, we may rely on advances from Affiliates of the general partner, other short-term financing, or may sell one or more of the properties.

The general partner has executed an amendment of the SHS lease through September 30, 2013. Annual base rent will increase from $359,094 to $383,231 per year commencing April 1, 2003. As part of the extension, we will advance $400,000 for tenant improvements and equipment at the property

Effective March 1, 2003, the general partner has executed an amendment to the Elite lease to reduce the annual rent to $666,855 per year with no increases in rent over the term of the lease.

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Results of Operations

At December 31, 2002, we own three operating properties. Two of our three operating properties, Scandinavian Health Spa and Colonial Manor Living Center, are leased on a "triple-net" basis which means that all expenses of the property are passed through to the tenant. We are responsible for maintenance of the structure and the parking lot and insurance, real estate taxes and common area maintenance of the Kmart property since the termination of the Kmart lease. We sold one of our properties, The Wholesale Club, on January 8, 1991. We sold another of our properties, Eurofresh Plaza, on November 30, 1999.

Rental income decreased from $1,733,051 in 2001 to $1,474,395 in 2002, due to the termination of the Kmart lease in June 2002. Rental income increased from $1,685,876 in 2000 to $1,733,051 in 2001, due to a higher effective annual rent on the revised lease with Elite. Elite, the tenant of the Colonial Manor Nursing Home, made the deferred rental payment, which was due on February 1, 2001 under the prior lease. The general partner and Elite entered into a revised ten-year lease, which began as of July 1, 2001. Under the new lease, Elite received a five-month rent abatement with the first payment due on December 1, 2001 and a 17% reduction in the annual rent. Although the tenant received a reduction in the annual rent payment based on the prior lease rates, the effective annual rental rate over the term of the new lease increased from $8.00 to $8.24. Effective March 1, 2003, the general partner has executed an amendment to the Elite lease to reduce the annual rent to $666,855 per year with no increases in rent over the term of the lease.

The Kmart Corporation filed for Chapter 11 bankruptcy reorganization on January 22, 2002. As a result thereof, Kmart had the option to accept or reject its lease with the Partnership. On March 8, 2002, Kmart Corporation announced its intent to close 283 stores, including the Chandler, Arizona store. The Bankruptcy Court approved these closings on March 20, 2002, as well as the liquidation procedures. As of June 29, 2002, Kmart rejected their lease for the Chandler, Arizona property and ceased making rent payments. The general partner filed a lease rejection claim with the bankruptcy court on our behalf. The general partner believes that the current rent at $5.37 per square foot is lower than market, and therefore, the space should be leasable to new tenants. It is the intent of the general partner to use its best efforts to lease this space. Commissions, concessions and tenant improvements may be required to obtain or attract replacement tenants.

Interest income decreased from $62,899 for the year ended December 31, 2000 to $30,055 in 2001 and $15,190 in 2002, due to lower interest rates and less cash to invest on a short-term basis.

Other income increased from $13,310 in 2000 to $47,403 in 2001, due to final payments received from the original tenant of the nursing home.

Professional services to affiliates decreased from $23,130 for the year ended December 31, 2001 to $13,357 for the year ended December 31, 2002, due to a decrease in legal services. Professional services to non-affiliates decreased from $31,210 for the year ended December 31, 2000 to $26,935 for the year ended December 31, 2001, due to a decrease in accounting fees.

General and administrative expenses to affiliates decreased from $27,861 for the year ended December 31, 2001 to $22,803 for the year ended December 31, 2002, due to a decrease in investor services and postage expenses. General and administrative expenses to affiliates decreased from $37,058 for the year ended December 31, 2000 to $27,861 for the year ended December 31, 2001, due to a decrease in investor services and data processing expenses. General and administrative expenses to non-affiliates increased from $20,957 for the year ended December 31, 2001 to $28,997 for the year ended December 31, 2002, due to increases in state tax expense, postage and printing expenses. General and administrative expenses to non-affiliates decreased from $34,294 for the year ended December 31, 2000 to $20,957 for the year ended December 31, 2001, due to a decrease in state tax expenses.

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Property operating expenses to non-affiliates increased from $6,043 in 2001 to $197,019 in 2002, due to the termination of the Kmart lease. Beginning July 2002, we are responsible for maintenance of the structure and the parking lot and insurance, real estate taxes and common area maintenance of the Kmart property. Property operating expenses to affiliates and non-affiliates decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to the sale of Eurofresh Plaza.

Selected Quarterly Financial Data (unaudited)

The following represents the results of operations for each quarter during the years ended December 31, 2002, 2001 and 2000.

Inflation

In general, rental income and operating expenses for our properties operated under triple-net leases, Scandinavian Health Spa and Colonial Manor Living Center, are not likely to be directly affected by future inflation, since rents are fixed under the leases and property expenses are the responsibility of tenants. The capital appreciation of triple-net-leased properties is likely to be influenced by interest rate fluctuations. To the extent that inflation affects interest rates, future inflation may have an effect on the capital appreciation of triple-net-leased properties.

Item 7(a). Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

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Item 8. Financial Statements and Supplementary Data

INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

Schedules not filed:

All schedules other than those indicated in the index have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

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INDEPENDENT AUDITORS' REPORT

To the Partners of

Inland Monthly Income Fund II, L.P.

We have audited the accompanying balance sheets of Inland Monthly Income Fund II, L.P. (a limited partnership) (the "Partnership") as of December 31, 2002 and 2001, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2002. Our audits also included the financial statement schedule listed in the Index at Item 14(c). These financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of Inland Monthly Income Fund II, L.P. as of December 31, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United State of America. Also, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

Deloitte & Touche LLP

January 30, 2003

Chicago, Illinois

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

Balance Sheets

December 31, 2002 and 2001

See accompanying notes to financial statements.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

Balance Sheets
(continued)

December 31, 2002 and 2001



Liabilities and Partners' Capital

See accompanying notes to financial statements.

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 INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

Statements of Operations

For the years ended December 31, 2002, 2001 and 2000

See accompanying notes to financial statements.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

Statements of Partners' Capital

For the years ended December 31, 2002, 2001 and 2000

See accompanying notes to financial statements.

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 INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)

Statements of Cash Flows

For the years ended December 31, 2002, 2001 and 2000