Milburn J. Donohoe Jr., 64, a third-generation Washington real estate business man who was widely known on Capitol Hill, died Sunday at Georgetown University Hospital as the result of circulatory problems.

A real estate appraiser, he headed the firm of Donohoe & Drury Real Estate. His career spanned more than 30 years.

Mr. Donohoe was born on Capitol Hill. He attended Gonzaga High School and graduated with honors from Niagara University in Buffalo, N.Y., in 1937. He earned a master's degree at the Wharton School of Finance of the University of Pennsylvania the following year.

He was with the real estate firm of Arms & Drury on Capitol Hill from 1938 until he volunteered for Navy duty in 1942. He became a lieutenant senior grade and served primarily as a ship armament officer.

After World War II, he joined the family firm of John F. Donohoe & Sons Real Estate. His grandfather, John F. Donohoe, had founded the firm in 1884. In 1952, Mr. Donohoe organized his own firm.

In addition to being a member and officer of the American Society of Appraisers and the Society of Residential Appraisers, he also was a member of the boards of St. Ann's Infant and Maternity Home, the Merrick Boys Club, the Lions Club of Capitol Hill and the Oldest Inhabitants of D.C.

Surviving are his wife, Alyee, and a son, Mark Edward, of the home in Washington; a sister, Frances Jordan of Chevy Chase; five brothers, James of Mclean; Paul and Daniel of Chevy Chase; Raymond of Arlington, and Louis of Corpus Christi, Tex.

The family suggests that expressions of sympathy be in the form of contributions to the Kennedy Institute or the Montgomery County Association for Retarded Citizens.