FEDERATED AMERICAN LEADERS FUND INC, N-30D, 2000-05-24

FEDERATED AMERICAN LEADERS FUND INC
N-30D, 2000-05-24

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Federated Investors
World-Class Investment Manager

John F. Donahue

President

Federated American Leaders Fund, Inc.

President's Message

Dear Fellow Shareholder:

Federated American Leaders Fund, Inc. was created in 1969 to allow investors the opportunity to own shares of high-quality large corporations and to participate in the growth and income of those very successful corporations. I am pleased to present the fund's 31st Annual Report.

This $3.7 billion fund invests in many of America's blue-chip corporations--well-known, large-cap corporations whose shares are held by individuals and institutions alike.

The fund's investment strategy is to focus on stocks selected from the "Leaders List," a list of 100 companies, leaders in their industries by sales, by earnings and by market capitalization. These companies are in the top 25% of their respective industries, and are trading at low valuations historically and in the current market. These companies are easily recognized, successful entities, for example: Motorola, Inc., GTE Corp., ExxonMobil, IBM, CBS, etc. The services and products provided by these corporations are an integral part of our everyday lives.

This report covers the 12-month period from April 1, 1999 through March 31, 2000. It begins with a discussion with portfolio manager Arthur J. Barry, Vice President, who co-manages the fund with Michael P. Donnelly, Senior Vice President, both of Federated Investment Management Company.

Following this discussion are three additional items of shareholder interest. First is a series of graphs indicating the fund's historical performance. Second is a complete listing of the fund's portfolio and third is the publication of the fund's financial statements.

During the reporting period, Federated American Leaders Fund continued to focus on attractively valued companies with solid earnings growth. Both the New Economy and old Economy stocks--for example, Sun Microsystems and AT&T--are well represented in the fund. Attractively valued companies with solid earnings have long played a fundamental, important role in the investment portfolios of American investors. However, over the 12-month period covered by this report, market sentiment favored "dot-com" stocks whose soaring prices were based on good ideas rather than real earnings. As a result, the fund's carefully selected, value-based portfolio produced a relatively flat total return. The fund's share class performance, plus dividend income, and capital gains, are listed below.¹

	Total Return	Income	Capital Gains	Net Asset Value Change
Class A Shares	1.97%	$0.16	$0.52	$24.90 to $24.74 = (0.64%)
Class B Shares	1.19%	$0.00	$0.52	$24.87 to $24.67 = (0.80%)
Class C Shares	1.19%	$0.00	$0.52	$24.88 to $24.68 = (0.80%)
Class F Shares	1.94%	$0.16	$0.52	$24.88 to $24.71 = (0.68%)

The value investment style incorporated in the fund's prudent strategy, which has served our shareholders well over time, will remain in place. We strongly believe that the fund's holdings will respond as a return to fundamentals, such as valuation, cash flow and earnings, emerges in the marketplace.

Thank you for owning shares of America's high-quality corporations. Remember, periods of price declines have proven to be good buying opportunities, and I strongly recommend that you consider adding to your account on a regular basis.

Sincerely,

John F. Donahue

John F. Donahue
President
May 15, 2000

1 Performance quoted is based on net asset value, reflects past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Total returns for the period, based on offering price, (i.e., less any applicable sales charge), for Class A, B, C, and F Shares were (3.64%), (4.27%), 0.20%, and (0.06%), respectively.

Arthur J. Barry, CFA

Vice President

Federated Investment Management Company

Michael P. Donnelly, CFA

Senior Vice President

Federated Investment Management Company

Investment Review

Federated American Leaders Fund, Inc.'s portfolio of large, blue-chip corporations has underperformed the Standard & Poor's 500 Index.¹ Why?

The primary reason for the fund's underperformance was that the fund had roughly one-half of the market exposure to technology stocks (17.5% fund allocation versus 33.4% of the index). The Standard & Poor's technology sector was up 78% over the past 12 months. The fund found it difficult to find "value" situations in technology-related stocks where price-to-earnings, price-to-sales, and other ratios are just mind boggling.

Secondly, value stocks struggled over the past 12 months. While traditional valuation metrics did not appear to matter to companies conducting business in the New Economy, for those companies not fortunate enough to participate, there did not seem to be a price low enough to entice anyone to buy these stocks. For the fund's fiscal year, the 200 stocks in the S&P 500 Index with the lowest price to earnings ratios lost 23% in value, while the 100 companies with the highest price to earnings ratios returned 59%! One-third of the stocks in the fund's portfolio traded at less than 11 times this year's earnings, a sizable discount to the S&P 500 Index which traded at 29 times this year's earnings.

1 The S&P 500 Index is comprised of common stocks in industry, transportation, and financial and public utility companies. This index is unmanaged and investments cannot be made in an index.

How did Federated American Leaders Fund, Inc. perform for shareholders during the 12-month period?

For the 12-month reporting period ended March 31, 2000, the fund's Class A, B, C, and F Shares produced total returns of 1.97%, 1.19%, 1.19%, and 1.94%, respectively.¹ This performance is based on net asset value and includes capital appreciation, income dividends, and capital gains. These returns did not match the 7.97% average return of the 480 multi-cap value funds tracked by Lipper Analytical Services, Inc.² The S&P 500 Index produced a total return of 17.93% for the reporting period.

In addition to the general weakness among value-oriented stocks, what impacted the fund's performance?

On the positive side, performance was aided by some of our large technology holdings such as Sun Microsystems, Motorola and Lexmark International. In addition, our communication services holdings, such as U.S. West, performed well during the fund's fiscal year. Detracting from relative performance was unfavorable relative security performance in the capital goods and financial sectors. Within the capital goods sector, two of our holdings--Waste Management and Tenneco--experienced fundamental stumbles. In the Financial sector, which was relatively weak during the fund's fiscal year, our valuation disciplines led us to some very inexpensive insurance and non-bank financial names which were significantly hurt by Federal Reserve Board tightenings versus some of the ultra-large names in the sector. Stocks such as Allstate, Washington Mutual, CIT Group and Conseco fall into this camp. We believe that with Congress' passage of H.R.10³ and the extreme undervalutation of these names that relative performance in this sector should improve during the coming fiscal year.

1 Performance quoted is based on net asset value, reflects past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Total returns for the period, based on offering price, for Class A, B, C, and F Shares were (3.64%), (4.27%), 0.20%, and (0.06%), respectively.

2 Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling into the category indicated. These figures do not reflect sales charges.

3 H.R.10, now known as the Gramm-Leach-Bliley Financial Services Modernization Act, was signed into law by President Bill Clinton. This act repeals the Glass-Steagall Act, which affected how banks, securities firms and insurance companies conducted business.

How was the fund's portfolio weighted among sectors at the end of the period?

On March 31, 2000, the fund's sector weightings were as follows:

Sector	Percentage of Net Assets	Percentage of S&P 500 Index
Technology	17.5%	33.4%
Financials	15.5%	13.0%
Consumer Cyclicals	11.8%	8.2%
Communication Services	10.4%	7.6%
Capital Goods	10.1%	8.2%
Energy	9.3%	5.4%
Consumer Staples	9.1%	9.9%
Health Care	8.5%	8.9%
Basic Materials	3.0%	2.5%
Utilities	3.0%	2.3%
Transportation	0.9%	0.6%
Other	0.4%	--

What were the fund's top ten holdings as of March 31, 2000, and tell us why you are bullish on these particular holdings.

The top ten holdings were as follows:

Name		Percentage of Net Assets
Sun Microsystems, Inc.		2.8%
News Corp. Ltd., ADR		2.2%
Motorola, Inc.		1.8%
AT&T Corp.		1.8%
U.S. West, Inc.		1.8%
GTE Corp.		1.7%
Seagate Technology, Inc.		1.7%
ABB AB, ADR		1.7%
Koninklijke (Royal) Philips Electronics NV, ADR		1.7%
Pharmacia & Upjohn, Inc.		1.6%
TOTAL PERCENTAGE OF PORTFOLIO		18.8%

Sun Microsystems, Inc.: In the last few years, Sun has made the transition from an unloved company to the premier beneficiary of the build-out of the eCommerce economy. As more companies embrace the Internet and more commerce occurs over the web, demand for Sun's products should increase. Even when many technology companies witnessed a Y2K hangover, Sun's sales and profit beat expectations, reflecting the unrelenting demand for servers.

News Corp.: News Corp is a leading vertically integrated media company with premier assets in broadcasting and satellites. Sales growth should be strong over the next couple of years as syndication sales ramp up. The company has been exhibiting improved financial discipline, and the stock is inexpensive versus its peer group.

Motorola, Inc.: Motorola gives the fund reasonably priced exposure to two very high growth industries--semiconductors and wireless communications. The company's restructuring is tracking ahead of plan and its redesigned phones are selling well. We expect wireless penetration worldwide to continue to increase and thus demand for wireless communication products to remain strong.

AT&T Corp.: With its acquisitions, AT&T can offer a full suite of telecommunication services. The company is well positioned to take advantage of two trends--broadband Internet access and interactive television. AT&T is unlocking value as it rationalizes its investment portfolio and issues tracking stock.

U.S. West, Inc.: U.S. West was the least expensive of all the Regional Bell Operating Companies and possesses a territory that will be the least effected by pending competition. These characteristics made U.S. West very attractive to both Global Crossing and Qwest, which were in a bidding war over the company. The company is to be acquired by Qwest.

GTE Corp.: GTE is currently the least expensive company amongst its peers and is one of few allowed to offer both local and long distance service to its customers. GTE is to be acquired by Bell Atlantic, which together form a phone company with an attractive package of assets.

Seagate Technology, Inc.: Seagate is improving earnings growth through productivity initiatives and as the disk drive market improves. The company has investments in other publicly owned companies that have significant value, most prominent of which is its over 30% holding in Veritas.

ABB AB, ADR: ABB is widely considered the "GE of Europe" without the financial services. The company is well positioned to benefit from the improvement in worldwide industrial production and has been dramatically improving its returns as it restructures its portfolio of businesses.

Koninklijke (Royal) Philips Electronics: Philips has strong competitive positions in lighting, consumer electronics and semiconductors. New management has improved these assets and shed weak divisions thereby improving business mix and profitability.

Pharmacia & Upjohn, Inc.: New management has improved the focus of the company. Pharmacia possesses one of the best growth rates in the pharmaceutical group due to its acquisition of Monsanto, good drug pipeline and low generic exposure.

In light of the current emphasis on the New Economy versus the Old Economy, and on growth management versus value management, what reasons would you cite to continue with the fund's long-term discipline?

We are obviously not pleased with this year's fund performance, but we maintain faith in the value disciplines that have served the fund well over the long term--identifying leading companies that are temporarily out of favor and appear inexpensive relative to their history relative to the market, as well as to their expected growth. We believe that the market environment witnessed over the past fiscal year is not normal and that a return to the fundamentals of earnings, cashflow and valuation sensitivity will emerge in the market place. During the past 18 months, we have witnessed a momentum-driven, casino-like environment which history has shown as not being sustainable. Great concepts must be converted into solid, profitable businesses for long-term investment success. Since 1969, the fund's managers have pursued ownership of large, blue-chip companies; corporations well-known and recognized by all of us. The success of these corporations, we believe, will continue, and now may be an excellent time to invest in a portfolio of these large, leading, undervalued companies.

Two Ways You May Seek to Invest for Success:

INITIAL INVESTMENT

If you made an initial investment of $32,000 in the Class A Shares of Federated American Leaders Fund, Inc. on 2/26/69, reinvested dividends and capital gains, and did not redeem any shares, your account would have been worth $806,546 on 3/31/00. You would have earned an 11.07%¹ average annual total return for the investment life span.

One key to investing wisely is to reinvest all distributions in fund shares. This increases the number of shares on which you can earn future dividends, and you gain the benefit of compounding.

As of 3/31/00, the Class A Shares' average annual 1-year, 5-year, and 10-year total returns were (3.64)%, 17.98%, and 14.86%, respectively. Class B Shares' average annual 1-year, 5-year, and since inception (7/25/94) total returns were (4.27)%, 18.21%, and 17.40%, respectively. Class C Shares' average annual 1-year, 5-year, and since inception (4/22/93) total returns were 0.20%, 18.41%, and 15.27%, respectively. Class F Shares' average annual 1-year, 5-year, and since inception (7/28/93) total returns were (0.06)%, 19.04%, and 15.81%, respectively.²

[Graphic Representation Omitted - See Appendix]

1 Total return represents the change in the value of an investment after reinvesting all income and capital gains, and takes into account the 5.50% sales charge applicable to an initial investment in Class A Shares. Data quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.

2 The total returns stated take into account all applicable sales charges. The maximum sales charges and contingent deferred sales charges for the fund are as follows: Class A Shares, 5.50% sales charge; Class B Shares, 5.50% contingent deferred sales charge; Class C Shares, 1.00% contingent deferred sales charge; Class F Shares, 1.00% sales charge and 1.00% contingent deferred sales charge.

ONE STEP AT A TIME

$1,000 initial investment and subsequent investments of $1,000 each year for 31 years (reinvesting all dividends and capital gains) grew to $356,846.

With this approach, the key is consistency.

If you had started investing $1,000 annually in the Class A Shares of Federated American Leaders Fund, Inc. on 2/26/69, reinvested your dividends and capital gains and did not redeem any shares, you would have invested only $32,000, but your account would have reached a total value of $356,846¹ by 3/31/00. You would have earned an average annual total return of 12.70%.

A practical investment plan helps you pursue long-term performance from blue-chip stocks. Through systematic investing, you buy shares on a regular basis and reinvest all earnings. An investment plan can work for you when you invest only $1,000 annually. You can take it one step at a time. Put time, money and compounding to work.

[Graphic Representation Omitted - See Appendix]

1 This chart assumes that the subsequent annual investments are made on the last day of each anniversary month. No method of investing can guarantee a profit or protect against loss in down markets.

Hypothetical Investor Profile--
Investing for a College Education

David and Joan Rice are a fictional couple who, like many shareholders, are searching for a way to make their money grow over time.

David and Joan have been planning for the college education of their three children. On March 31, 1985, they invested $5,000 in the Class A Shares of Federated American Leaders Fund, Inc. Since then, David and Joan have made additional investments of $250 every month.

As this chart shows, over 15 years, the original $5,000 investment, along with their additional monthly $250 investments totaling $50,000 has grown to $171,450. This represents a 13.76% average annual total return. For the Rices, a dedicated program of monthly investments really paid off.

[Graphic Representation Omitted - See Appendix]

This hypothetical scenario is provided for illustrative purposes only and does not represent the result obtained by any particular shareholder. Past performance does not guarantee future results.

Federated American Leaders Fund, Inc.--Class A Shares

GROWTH OF $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,000¹ in Federated American Leaders Fund, Inc. (Class A Shares) (the "Fund") from March 31, 1990 to March 31, 2000, compared to the Standard & Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average (LGIFA).²

Average Annual Total Return³ as of March 31, 2000
1 Year		(3.64%)
5 Years		17.98%
10 Years		14.86%
Start of Performance (2/26/69)		11.07%

[Graphic Representation Omitted - See Appendix]

Past performance is no guarantee of future performance. Your investment return and principal value will fluctuate, so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550) that was effective prior to October 1, 1994. As of October 1, 1994, the maximum sales charge is 5.50%. The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the LGIFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.

2 The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The index is unmanaged. The LGIFA represents the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling in the category indicated, and is not adjusted to reflect any sales charges. However, these total returns are reported net of expenses or other fees that the Securities and Exchange Commission requires to be reflected in a fund's performance.

3 Total returns quoted reflect all applicable sales charges.

Federated American Leaders Fund, Inc.--Class B Shares

GROWTH OF $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,000¹ in Federated American Leaders Fund, Inc. (Class B Shares) (the "Fund") from July 25, 1994 (start of performance) to March 31, 2000, compared to the Standard & Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average (LGIFA).²

Average Annual Total Return³ as of March 31, 2000
1 Year		(4.27%)
5 Years		18.21%
Start of Performance (7/25/94)		17.40%

[Graphic Representation Omitted - See Appendix]

1 Represents a hypothetical investment of $10,000 in the Fund. The ending value of the Fund reflects a 1.00% contingent deferred sales charge on any redemption less than six years from the purchase date. The maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the LGIFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.

2 The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in a fund's performance. The index is unmanaged. The LGIFA represents the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling in the category indicated, and is not adjusted to reflect any sales charges. However, these total returns are reported net of expenses or other fees that the Securities and Exchange Commission requires to be reflected in a fund's performance.

3 Total returns quoted reflect all applicable contingent deferred sales charges.

Federated American Leaders Fund, Inc.--Class C Shares

GROWTH OF $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,000¹ in Federated American Leaders Fund, Inc. (Class C Shares) (the "Fund") from April 22, 1993 (start of performance) to March 31, 2000, compared to the Standard & Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average (LGIFA).²

Average Annual Total Return³ as of March 31, 2000
1 Year		0.20%
5 Years		18.41%
Start of Performance (4/22/93)		15.27%

[Graphic Representation Omitted - See Appendix]

1 Represents a hypothetical investment of $10,000 in the Fund. A maximum 1.00% contingent deferred sales charge would be applied to any redemption less than one year from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the LGIFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.

3 Total returns quoted reflect all applicable contingent deferred sales charges.

Federated American Leaders Fund, Inc.--Class F Shares

GROWTH OF $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,000¹ in Federated American Leaders Fund, Inc. (Class F Shares) (the "Fund") from July 28, 1993 (start of performance) to March 31, 2000, compared to the Standard & Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average (LGIFA).²

Average Annual Total Return³ as of March 31, 2000
1 Year		(0.06%)
5 Years		19.04%
Start of Performance (7/28/93)		15.81%

[Graphic Representation Omitted - See Appendix]

1 Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900). A contingent deferred sales charge of 1.00% would be applied to any redemption less than four years from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the LGIFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.

3 Total returns quoted reflect all applicable sales charges and contingent deferred sales charges.

Portfolio of Investments

MARCH 31, 2000

Shares

Value

COMMON STOCKS--98.8%

Basic Materials--3.0%

1,337,100

Corn Products International, Inc.

$32,173,969

847,900

Nucor Corp.

42,395,000

661,300

PPG Industries, Inc.

34,594,256

TOTAL

109,163,225

Capital Goods--10.1%

1,347,000

Boeing Co.

51,101,812

751,800

Deere & Co.

28,568,400

655,500

Honeywell International, Inc.

34,536,656

805,400

Ingersoll-Rand Co.

35,638,950

587,000

Johnson Controls, Inc.

31,734,687

358,108

Koninklijke (Royal) Philips Electronics NV, ADR

61,348,377

522,600

Textron, Inc.

31,813,275

177,000

TRW, Inc.

10,354,500

1,165,964

Tyco International Ltd.

58,152,454

1,024,500

Viasystems Group, Inc.

15,879,750

1,083,200

Waste Management, Inc.

14,826,300

TOTAL

373,955,161

Communication Services--10.4%

1,194,900

AT&T Corp.

67,213,125

363,900

AT&T Corp. -- Liberty Media Group, Inc., Class A

21,561,075

178,200

BCE, Inc.

22,352,962

950,800

BellSouth Corp.

44,687,600

1,490,700

Charter Communications, Inc.

21,358,936

906,100

GTE Corp.

64,333,100

329,600

Montana Power Co.

21,094,400

900,247

SBC Communications, Inc.

37,810,374

173,500

Telephone and Data Systems, Inc.

19,258,500

907,042

U S West, Inc.

65,873,925

TOTAL

385,543,997

Shares

Value

COMMON STOCKS--continued

Consumer Cyclicals--11.5%

869,200

Block (H&R), Inc.

38,896,700

1,025,000

Brunswick Corp.

19,410,937

1,549,800

Cendant Corp.

28,671,300

983,600

Cooper Tire & Rubber Co.

12,356,475

1,045,724

Delphi Automotive Systems Corp.

16,731,584

794,500

Federated Department Stores, Inc.

33,170,375

800,400

Ford Motor Co.

36,768,375

536,700

General Motors Corp.

44,445,469

2,184,400

Kmart Corp.

21,161,375

641,400

Knight Ridder, Inc.

32,671,312

818,200

Liz Claiborne, Inc.

37,483,787

1,396,200

Sherwin-Williams Co. (The)

30,629,137

2,427,400

Toys "R" Us, Inc.

35,955,863

697,100

Wal-Mart Stores, Inc.

38,689,050

TOTAL

427,041,739

Consumer Staples--9.1%

511,800

Anheuser-Busch Cos., Inc.

31,859,550

988,524

CBS Corp.

55,975,172

554,600

Kimberly-Clark Corp.

31,057,600

1,712,300

News Corp. Ltd., ADR

81,762,325

1,221,800

Philip Morris Cos., Inc.

25,810,525

1,883,000

Sara Lee Corp.

33,894,000

2,038,600

UST, Inc.

31,853,125

856,100

Viacom, Inc., Class A

45,747,844

TOTAL

337,960,141

Energy--9.3%

1,168,700

Ashland, Inc.

39,078,410

713,000

Coastal Corp.

32,798,000

887,800

Diamond Offshore Drilling, Inc.

35,456,513

748,654

ExxonMobil Corp.

58,254,639

785,500

Royal Dutch Petroleum Co., ADR

45,215,344

671,000

Schlumberger Ltd.

51,331,500

Shares

Value

COMMON STOCKS--continued

Energy--continued

892,400

Sunoco, Inc.

24,429,450

129,905

Transocean Sedco Forex, Inc.

6,665,750

949,700

USX -- Marathon Group

24,751,556

600,700

Williams Cos., Inc.

26,393,256

TOTAL

344,374,418

Financials--15.5%

570,345

ABB AB, ADR

63,256,165

1,424,800

Allstate Corp.

33,928,050

921,700

BankAmerica Corp.

48,331,644

1,033,984

Bear Stearns Cos., Inc.

47,175,520

500,050

CIGNA Corp.

37,878,788

2,638,900

CIT Group, Inc., Class A

51,458,550

341,900

Chase Manhattan Corp.

29,809,406

3,347,904

Conseco, Inc.

38,291,652

434,400

John Hancock Financial Services, Inc.

7,846,350

985,200

Lincoln National Corp.

33,004,200

634,200

Loews Corp.

31,710,000

777,600

MBIA, Inc.

40,483,800

380,050

Marsh & McLennan Cos., Inc.

41,924,266

858,600

PNC Financial Services Group

38,690,663

1,094,600

Washington Mutual, Inc.

29,006,900

TOTAL

572,795,954

Health Care--8.5%

1,001,000

Abbott Laboratories

35,222,688

665,500

Baxter International, Inc.

41,718,531

582,600

Bristol-Myers Squibb Co.

33,645,150

4,162,400

Healthsouth, Corp.

23,153,350

603,200

Merck & Co., Inc.

37,473,800

2,096,700

Oxford Health Plans, Inc.

31,974,675

1,021,000

Pharmacia & Upjohn, Inc.

60,494,250

858,900

United Healthcare Corp.

51,211,913

TOTAL

314,894,357

Shares

Value

COMMON STOCKS--continued

Technology--17.5%

750,000

Compaq Computer Corp.

19,968,750

416,300

Computer Sciences Corp.

32,939,738

877,200

Electronic Data Systems Corp.

56,305,275

1,323,600

First Data Corp.

58,569,300

484,000

International Business Machines Corp.

57,112,000

523,800

Lexmark International Group, Inc., Class A

55,391,850

389,800

Lucent Technologies, Inc.

23,680,350

220,900

Micron Technology, Inc.

27,833,400

477,300

Motorola, Inc.

67,955,588

1,471,600

Novell, Inc.

42,124,550

371,000

Parametric Technology Corp.

7,814,188

1,066,100

Seagate Technology, Inc.

64,232,525

1,085,300

Sun Microsystems, Inc.

101,696,002

1,302,800

Unisys Corp.

33,221,400

TOTAL

648,844,916

Transportation--0.9%

857,600

Union Pacific Corp.

33,553,600

Utilities--3.0%

723,100

Duke Energy Corp.

37,962,750

1,722,300

Entergy Corp.

34,768,931

836,800

FPL Group, Inc.

38,545,100

TOTAL

111,276,781

TOTAL COMMON STOCKS (IDENTIFIED COST $3,109,898,883)

3,659,404,289

PREFERRED STOCK--0.3%

Consumer Cyclicals--0.3%

344,900

Cendant Corp., Conv. Pfd., $3.75 (identified cost $9,383,993)

9,894,520

Principal
Amount

Value

REPURCHASE AGREEMENT--0.4%³

16,640,000

ABN AMRO, Inc., 6.18%, dated 3/31/2000, due 4/3/2000 (at amortized cost)

16,640,000

TOTAL INVESTMENTS (IDENTIFIED COST $3,135,922,876)⁴

3,685,938,809

1 Non-income producing security.

2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the fund's board of directors. At March 31, 2000, these securities amounted to $63,256,165 which represents 1.71% of net assets.

3 The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investment in the repurchase agreement is through participation in a joint account with other Federated funds.

4 The cost of investments for federal tax purposes amounts to $3,136,012,731. The net unrealized appreciation of investments on a federal tax basis amounts to $549,926,078 which is comprised of $957,241,782 appreciation and $407,315,704 depreciation at March 31, 2000.

Note: The categories of investments are shown as a percentage of net assets ($3,702,285,793) at March 31, 2000.

The following acronym is used throughout this portfolio:

ADR	--American Depositary Receipt

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

MARCH 31, 2000

Assets:

Total investments in securities, at value (identified cost $3,135,922,876 and tax cost $3,136,012,731)

3,685,938,809

Cash

784

Income receivable

8,016,270

Receivable for investments sold

28,978,189

Receivable for shares sold

11,044,100

TOTAL ASSETS

3,733,978,152

Liabilities:

Payable for investments purchased

20,304,727

Payable for shares redeemed

9,339,031

Accrued expenses

2,048,601

TOTAL LIABILITIES

31,692,359

Net assets for 149,868,730 shares outstanding

3,702,285,793

Net Assets Consist of:

Paid-in capital

3,077,879,729

Accumulated net unrealized appreciation of investments¹

550,015,933

Accumulated net realized gain on investments

73,499,349

Undistributed net investment income

890,782

TOTAL NET ASSETS

3,702,285,793

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Class A Shares:

Net Asset Value Per Share ($1,671,779,968 ÷ 67,580,942 shares outstanding)

$24.74

Offering Price Per Share (100/94.50 of $24.74)²

$26.18

Redemption Proceeds Per Share

$24.74

Class B Shares:

Net Asset Value Per Share ($1,721,728,953 ÷ 69,780,748 shares outstanding)

$24.67

Offering Price Per Share

$24.67

Redemption Proceeds Per Share (94.50/100 of $24.67)²

$23.31

Class C Shares:

Net Asset Value Per Share ($185,062,620 ÷ 7,499,510 shares outstanding)

$24.68

Offering Price Per Share

$24.68

Redemption Proceeds Per Share (99.00/100 of $24.68)²

$24.43

Class F Shares:

Net Asset Value Per Share ($123,714,252 ÷ 5,007,530 shares outstanding)

$24.71

Offering Price Per Share (100/99.00 of $24.71)²

$24.96

Redemption Proceeds Per Share (99.00/100 of $24.71)²

$24.46

1 Includes $1,694,671 of unrealized appreciation at December 3, 1999, related to the tax-free transfer of assets from a Common Trust Fund.

2 See "What Do Shares Cost?" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

YEAR ENDED MARCH 31, 2000

Investment Income:

Dividends (net of foreign taxes withheld of $272,844)

68,423,709

Interest

3,709,279

TOTAL INCOME

72,132,988

Expenses:

Investment adviser fee

25,334,934

Administrative personnel and services fee

2,960,000

Custodian fees

203,181

Transfer and dividend disbursing agent fees and expenses

4,871,018

Directors'/Trustees' fees

32,667

Auditing fees

34,859

Legal fees

17,717

Portfolio accounting fees

392,927

Distribution services fee--Class B Shares

14,096,176

Distribution services fee--Class C Shares

1,440,103

Shareholder services fee--Class A Shares

4,295,921

Shareholder services fee--Class B Shares

4,698,725

Shareholder services fee--Class C Shares

480,034

Shareholder services fee--Class F Shares

343,667

Share registration costs

357,725

Printing and postage

804,224

Insurance premiums

7,963

Taxes

608,936

Miscellaneous

56,760

TOTAL EXPENSES

61,037,537

Expenses Reduced by Directed Brokerage Arrangements

(101,946

)

Net expenses

60,935,591

Net investment income

11,197,397

Realized and Unrealized Gain on Investments:

Net realized gain on investments

84,487,948

Net change in unrealized appreciation of investments

(56,015,276

)

Net realized and unrealized gain on investments

28,472,672

Change in net assets resulting from operations

39,670,069

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Year Ended March 31

2000

1999

Increase (Decrease) in Net Assets:

Operations:

Net investment income

11,197,397

16,069,315

Net realized gain on investments ($84,569,215 and $279,325,542, respectively, as computed for federal tax purposes)

84,487,948

279,325,386

Net change in unrealized appreciation of investments

(56,015,276

)

(90,333,825

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

39,670,069

205,060,876

Distributions to Shareholders:

Distributions from net investment income

Class A Shares

(10,546,813

)

(12,269,937

)

Class B Shares

(1,639,307

)

Class C Shares

(131,274

)

Class F Shares

(843,498

)

(1,055,791

)

Distributions from net realized gain on investments

Class A Shares

(34,738,302

)

(174,322,085

)

Class B Shares

(38,153,931

)

(168,304,148

)

Class C Shares

(3,849,961

)

(17,835,525

)

Class F Shares

(2,855,500

)

(15,130,507

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(90,988,005

)

(390,688,574

)

Share Transactions:

Proceeds from sale of shares

1,146,997,915

1,361,055,422

Proceeds from shares issued in connection with the tax-free transfer of assets from a Common Trust Fund

2,156,473

Net asset value of shares issued to shareholders in payment of distributions declared

82,739,460

352,843,676

Cost of shares redeemed

(1,149,105,835

)

(781,014,882

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

82,788,013

932,884,216

Change in net assets

31,470,077

747,256,518

Net Assets:

Beginning of period

3,670,815,716

2,923,559,198

End of period (including undistributed net investment income of $890,782 and $1,083,696, respectively)

3,702,285,793

3,670,815,716

1 Includes $1,694,671 of unrealized appreciation at December 3, 1999, related to the tax-free transfer of assets from a Common Trust Fund.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class A Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Year Ended March 31

2000

1999

1998

1997

1996

Net Asset Value, Beginning of Period

$24.90

$26.64

$21.40

$19.78

$15.66

Income From Investment Operations:

Net investment income

0.17

0.21

0.29

0.23

0.22

Net realized and unrealized gain on investments

0.35

1.26

8.39

3.11

4.70

TOTAL FROM INVESTMENT OPERATIONS

0.52

1.47

8.68

3.34

4.92

Less Distributions:

Distributions from net investment income

(0.16

)

(0.20

)

(0.21

)

(0.21

)

(0.17

)

Distributions from net realized gain on investments

(0.52

)

(3.01

)

(3.23

)

(1.51

)

(0.63

)

TOTAL DISTRIBUTIONS

(0.68

)

(3.21

)

(3.44

)

(1.72

)

(0.80

)

Net Asset Value, End of Period

$24.74

$24.90

$26.64

$21.40

$19.78

Total Return²

1.97

6.31

43.95

17.40

32.00

Ratios to Average Net Assets:

Expenses

1.16

1.11

1.14

1.17

1.16

Net investment income

0.68

0.87

0.84

0.95

1.07

Expense waiver/reimbursement³

0.03

0.07

Supplemental Data:

Net assets, end of period (000 omitted)

$1,671,780

$1,621,527

$1,457,925

$638,082

$455,867

Portfolio turnover

1 For the year ended March 31, 2000, the Fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class B Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Year Ended March 31

2000

1999

1998

1997

1996

Net Asset Value, Beginning of Period

$24.87

$26.61

$21.40

$19.79

$15.67

Income From Investment Operations:

Net investment income (net operating loss)

(0.02

)

0.03

0.06

0.05

0.10

Net realized and unrealized gain on investments

0.34

1.26

8.41

3.12

4.70

TOTAL FROM INVESTMENT OPERATIONS

0.32

1.29

8.47

3.17

4.80

Less Distributions:

Distributions from net investment income

(0.02

)

(0.03

)

(0.05

)

(0.05

)

Distributions from net realized gain on investments

(0.52

)

(3.01

)

(3.23

)

(1.51

)

(0.63

)

TOTAL DISTRIBUTIONS

(0.52

)

(3.03

)

(3.26

)

(1.56

)

(0.68

)

Net Asset Value, End of Period

$24.67

$24.87

$26.61

$21.40

$19.79

Total Return²

1.19

5.54

42.78

16.49

31.10

Ratios to Average Net Assets:

Expenses

1.91

1.86

1.89

1.95

1.93

Net investment income (net operating loss)

(0.07

0.13

0.11

0.18

0.32

Expense waiver/reimbursement³

0.05

Supplemental Data:

Net assets, end of period (000 omitted)

$1,721,729

$1,738,564

$1,201,402

$540,995

$261,024

Portfolio turnover

1 For the year ended March 31, 2000, the Fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 This voluntary expense decrease is reflected in both the expense and net investment income (net operating loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class C Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Year Ended March 31

2000

1999

1998

1997

1996

Net Asset Value, Beginning of Period

$24.88

$26.61

$21.40

$19.80

$15.66

Income From Investment Operations:

Net investment income (net operating loss)

(0.02

)

0.03

0.05

0.04

0.05

Net realized and unrealized gain on investments

0.34

1.27

8.42

3.12

4.75

TOTAL FROM INVESTMENT OPERATIONS

0.32

1.30

8.47

3.16

4.80

Less Distributions:

Distributions from net investment income

(0.02

)

(0.03

)

(0.05

)

(0.03

)

Distributions from net realized gain on investments

(0.52

)

(3.01

)

(3.23

)

(1.51

)

(0.63

)

TOTAL DISTRIBUTIONS

(0.52

)

(3.03

)

(3.26

)

(1.56

)

(0.66

)

Net Asset Value, End of Period

$24.68

$24.88

$26.61

$21.40

$19.80

Total Return²

1.19

5.55

42.78

16.42

31.14

Ratios to Average Net Assets:

Expenses

1.91

1.86

1.89

1.95

1.96

Net investment income (net operating loss)

(0.07

0.12

0.11

0.18

0.27

Expense waiver/reimbursement³

0.02

Supplemental Data:

Net assets, end of period (000 omitted)

$185,063

$175,843

$134,773

$69,990

$44,434

Portfolio turnover

1 For the year ended March 31, 2000, the Fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 This voluntary expense decrease is reflected in both the expense and net investment income (net operating loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class F Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Year Ended March 31

2000

1999

1998

1997

1996

Net Asset Value, Beginning of Period

$24.88

$26.61

$21.40

$19.78

$15.66

Income From Investment Operations:

Net investment income

0.17

0.21

0.22

0.20

0.19

Net realized and unrealized gain on investments

0.34

1.27

8.43

3.13

4.72

TOTAL FROM INVESTMENT OPERATIONS

0.51

1.48

8.65

3.33

4.91

Less Distributions:

Distributions from net investment income

(0.16

)

(0.20

)

(0.21

)

(0.20

)

(0.16

)

Distributions from net realized gain on investments

(0.52

)

(3.01

)

(3.23

)

(1.51

)

(0.63

)

TOTAL DISTRIBUTIONS

(0.68

)

(3.21

)

(3.44

)

(1.71

)

(0.79

)

Net Asset Value, End of Period

$24.71

$24.88

$26.61

$21.40

$19.78

Total Return²

1.94

6.36

43.80

17.39

31.95

Ratios to Average Net Assets:

Expenses

1.16

1.11

1.14

1.19

1.21

Net investment income

0.68

0.87

0.86

0.94

1.02

Expense waiver/reimbursement³

0.01

0.02

Supplemental Data:

Net assets, end of period (000 omitted)

$123,714

$134,881

$129,458

$85,151

$55,329

Portfolio turnover

1 For the year ended March 31, 2000, the Fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

MARCH 31, 2000

ORGANIZATION

Federated American Leaders Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund offers four classes of shares: Class A Shares, Class B Shares, Class C Shares and Class F Shares. The investment objective of the Fund is to seek growth of capital and of income by concentrating the area of investment decision in the securities of high-quality companies.

On December 3, 1999, the Fund received a tax-free transfer of assets from a Common Trust Fund as follows:

Class A
Shares Issued

Common Trust
Fund Net
Assets Received

Unrealized
Appreciation

86,190

$2,156,473

$1,694,671

1 Unrealized appreciation is included in the Common Trust Fund Net Assets Received amount shown above.

SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.

Investment Valuations

Listed equity securities are valued at the last sale price reported on a national securities exchange. Securities for which no quotations are readily available will be priced at their fair value as determined in good faith using methods approved by the Board of Directors (the "Directors"). Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value.

Repurchase Agreements

It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Directors. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis.

CAPITAL STOCK

At March 31, 2000, par value shares ($0.20 per share) authorized were as follows:

Class Name		Number of Par Value Capital Stock Authorized
Class A Shares		30,000,000
Class B Shares		20,000,000
Class C Shares		25,000,000
Class F Shares		25,000,000
TOTAL		100,000,000

Transactions in capital stock were as follows:

Year Ended March 31

2000

1999

Class A Shares:

Shares

Amount

Shares

Amount

Shares sold

22,768,346

573,212,123

23,860,472

592,015,541

Shares issued in connection with the tax-free transfer of assets from a Common Trust Fund

86,190

2,156,473

Shares issued to shareholders in payment of distributions declared

1,529,350

39,587,541

6,671,760

160,839,562

Shares redeemed

(21,912,496

)

(549,187,290

)

(20,151,161

)

(497,963,928

)

NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS

2,471,390

65,768,847

10,381,071

254,891,175

Year Ended March 31

2000

1999

Class B Shares:

Shares

Amount

Shares

Amount

Shares sold

18,854,524

480,573,533

27,415,116

682,194,308

Shares issued to shareholders in payment of distributions declared

1,380,839

36,036,354

6,634,213

159,886,480

Shares redeemed

(20,350,448

)

(503,640,825

)

(9,306,496

)

(227,618,837

)

NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS

(115,085

)

12,969,062

24,742,833

614,461,951

Year Ended March 31

2000

1999

Class C Shares:

Shares

Amount

Shares

Amount

Shares sold

2,930,413

73,888,427

2,821,388

70,046,322

Shares issued to shareholders in payment of distributions declared

140,378

3,662,744

701,366

16,918,449

Shares redeemed

(2,639,486

)

(65,391,276

)

(1,519,177

)

(37,222,724

)

NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS

431,305

12,159,895

2,003,577

49,742,047

Year Ended March 31

2000

1999

Class F Shares:

Shares

Amount

Shares

Amount

Shares sold

699,432

17,629,161

670,331

16,799,251

Shares issued to shareholders in payment of distributions declared

133,418

3,452,821

630,147

15,199,185

Shares redeemed

(1,247,578

)

(30,886,444

)

(744,093

)

(18,209,393

)

NET CHANGE RESULTING FROM CLASS F SHARE TRANSACTIONS

(414,728

)

(9,804,462

)

556,385

13,789,043

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

2,372,882

81,093,342

37,683,866

932,884,216

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Mangament Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to (a) a maximum of 0.55% of the average daily net assets of the Fund, and (b) 4.50% of the gross income of the Fund, excluding capital gains or losses.

Administrative Fee

Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Class B and Class C Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.

Share Class

Percentage of
Average Daily
Net Assets of Class

Class B Shares

0.75%

Class C Shares

0.75%

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Expense Reduction

The Fund directs certain portfolio trades to a broker that, in turn, pays a portion of the Fund's operating expenses. For the period ended March 31, 2000, the Fund's expenses were reduced by $101,946 under these arrangements.

General

Certain of the Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended March 31, 2000, were as follows:

Purchases		$	1,404,809,935
Sales		$	1,366,556,182

CHANGE OF INDEPENDENT AUDITOR

On May 19, 1999, the Fund's Directors, upon the recommendation of the Audit Committee of the Directors, requested and subsequently accepted the resignation of Arthur Andersen LLP ("AA") as the Fund's independent auditors. AA's reports on the Fund's financial statements for the fiscal years ended March 31, 1998 and March 31, 1999, contained no adverse opinion or disclaimer of opinion nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the Fund's fiscal years ended March 31, 1998 and March 31, 1999: (i) there were no disagreements with AA on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of AA, would have caused it to make reference to the subject matter of the disagreements in connection with its reports on the financial statements for such years; and (ii) there were no reportable events of the kind described in Item 304(a)(1)(v) of Regulation S-K under the Securities Act of 1934, as amended.

The Fund, by action of its Directors, upon the recommendation of the Audit Committee of the Directors, has engaged Deloitte & Touche LLP ("D&T") as the independent auditors to audit the Fund's financial statements for the fiscal year ended March 31, 2000. During the Fund's fiscal years ended March 31, 1998 and March 31, 1999, neither the Fund nor anyone on its behalf has consulted D&T on items which: (i) concerned the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Fund's financial statements; or (ii) concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K) of reportable events (as described in paragraph (a)(1)(v) of said Item 304).

Independent Auditors' Report

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
FEDERATED AMERICAN LEADERS FUND, INC.:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Federated American Leaders Fund, Inc. (the "Fund") as of March 31, 2000, and the related statements of operations and changes in net assets and the financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The statement of changes in net assets for the year ended March 31, 1999, and the financial highlights for each of the periods in the four years ended March 31, 1999 were audited by other auditors whose report dated May 20, 1999, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to provide reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at March 31, 2000, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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 our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2000, the results of its operations, the changes in its net assets and its financial highlights for the respective stated periods in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts
May 19, 2000

Directors

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

President

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD B. FISHER

Vice President

RICHARD J. THOMAS

Treasurer

C. GRANT ANDERSON

Assistant Secretary

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information.

Federated
World-Class Investment Manager

ANNUAL REPORT

AS OF MARCH 31, 2000