Rule 497(e)
Registration No. 2-74452
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
Supplement dated July 10, 1996 to the
Prospectus of the Company
CAPITALIZED TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL HAVE THE
MEANING ASCRIBED TO THEM IN THE PROSPECTUS OF THE COMPANY
The Board of Directors of Merrill Lynch Variable Series Funds, Inc. (the
"Company") has approved the following proposals for submission to stockholders
of the affected Funds at a meeting of stockholders of the Company scheduled to
be held on October 11, 1996: (i) a proposal to amend the fundamental investment
restrictions of each of the Company's Funds other than the Merrill Lynch
Domestic Money Market Fund and Merrill Lynch Reserve Assets Fund, (ii) a
proposal to amend the investment objective of the Merrill Lynch Intermediate
Government Bond Fund and to change the name of that Fund, (iii) a proposal to
amend the investment objective of the Merrill Lynch World Income Focus Fund and
to change the name of that Fund, (iv) a proposal to approve an Agreement and
Plan of Reorganization providing for the combination of the Company's Merrill
Lynch International Bond Fund with and into its Merrill Lynch World Income
Focus Fund and (v) a proposal to approve an Agreement and Plan of
Reorganization providing for the combination of the Company's Merrill Lynch
Flexible Strategy Fund with and into its Merrill Lynch Global Strategy Focus
Fund. With respect to proposal (ii) above, it is proposed that the
Intermediate Government Bond Fund's investment objective be changed to permit
that Fund to invest in debt securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities with a maturity GREATER THAN
fifteen years. With respect to proposal (iii) above, it is proposed that the
World Income Focus Fund's investment objective be changed from seeking "to
provide to stockholders high current income" to seeking "to provide to
stockholders a high total investment return".
It is anticipated that all the proposals, if approved by the stockholders
of the affected Funds, will be implemented on or about December 13, 1996 or
such later date as the proposed reorganizations contemplated in proposals (iv)
and (v) above are consummated.