AMERICAN CENTURY MUNICIPAL TRUST, 485BPOS, 1998-08-31

AMERICAN CENTURY MUNICIPAL TRUST
485BPOS, 1998-08-31

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-----

File No. 2-91229:

Pre-Effective Amendment No.____

Post-Effective Amendment No._25_ X
-----
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-----

File No. 811-4025:

Amendment No._26_

AMERICAN CENTURY MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)

4500 Main Street, P.O. Box 419200, Kansas City, MO 64141-6200
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: 816-531-5575

Douglas A. Paul
Secretary and Vice President
1665 Charleston Road, Mountain View, CA 94043
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: Immediately, upon effectiveness
(first offered 8/1/84)

It is proposed that this filing become effective:

_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on August 31, 1998 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a) of Rule 485
_____ on (date) pursuant to paragraph (a)(1) of Rule 485
_____ 75 days after filing pursuant to paragraph (a) (2) of Rule 485
_____ on (date) pursuant to paragraph (a)(2) of Rule 485

- --------------------------------------------------------------------------------
Registrant has elected to register an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. On August 18, 1998, the Registrant filed a Rule
24f-2 Notice on Form 24f-2 with respect to its fiscal year ended May 31, 1998.
<PAGE>
AMERICAN CENTURY MUNICIPAL TRUST
1933 Act Post-Effective Amendment No. 25
1940 Act Amendment No. 26

FORM N-1A
CROSS-REFERENCE SHEET

PART A: PROSPECTUS

ITEM PROSPECTUS CAPTION

1 Cover Page

2 Transaction and Operating Expense Table

3 Financial Highlights, Performance Advertising

4 Management, Further Information About American Century, Investment
Objectives of the Funds, Investment Policies of the Funds, Risk
Factors and Investment Techniques, Other Investment Practices, Their
Characteristics and Risks

5 Management

5A Not Applicable

6 Further Information About American Century, How to Redeem Shares,
Cover Page, Distributions, Taxes

7 Cover Page, Distribution of Fund Shares, How to Open an Account, Share
Price, Transfer and Administrative Services

8 How to Redeem Shares, Transfer and Administrative Services

9 Not Applicable

PART B: STATEMENT OF ADDITIONAL INFORMATION

ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION

10 Cover Page

11 Table of Contents

12 About the Trust

13 Investment Policies and Techniques, Investment Restrictions, Portfolio
Transactions

14 Trustee and Officers

15 Additional Purchase and Redemption Information, Trustees and Officers

16 Management, Transfer and Administrative Services, About the Trust

17 Portfolio Transactions

18 About the Trust

19 Additional Purchase and Redemption Information, Valuation of Portfolio
Securities

20 Taxes

21 Distribution of Fund Shares, Additional Purchase and Redemption
Information

22 Performance

23 Cover Page
<PAGE>
PROSPECTUS

[american century logo(reg.sm)]
American
Century(reg.sm)

AUGUST 31, 1998

BENHAM
GROUP(reg.tm)

INVESTOR CLASS

Arizona Intermediate-Term Municipal
Florida Municipal Money Market
Florida Intermediate-Term Municipal
New York Municipal Money Market

AMERICAN CENTURY INVESTMENTS

FAMILY OF FUNDS

American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios. To
help you find the funds that may meet your investment needs, American Century
funds have been divided into three groups based on investment style and
objectives. These groups, which appear below, are designed to help simplify your
fund decisions.

AMERICAN CENTURY INVESTMENTS--FAMILY OF FUNDS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Arizona Intermediate-
Term Municipal

Florida Municipal
Money Market

Florida Intermediate-
Term Municipal

New York Municipal
Money Market

PROSPECTUS

AUGUST 31, 1998

Arizona Intermediate-Term Municipal
Florida Municipal Money Market
Florida Intermediate-Term Municipal
New York Municipal Money Market

INVESTOR CLASS

AMERICAN CENTURY MUNICIPAL TRUST

American Century Municipal Trust is a part of American Century Investments,
a family of funds that includes nearly 70 no-load mutual funds covering a
variety of investment opportunities. Four of the funds from our Benham Group
that invest in various types of municipal securities are described in this
Prospectus. Their investment objectives are listed on page 2 of this Prospectus.
The other funds are described in separate prospectuses.

Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.

This Prospectus gives you information about the funds that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated August 31, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419200 Kansas City,
Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri: 816-444-3485
www.americancentury.com

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY -- BENHAM ARIZONA
INTERMEDIATE-TERM MUNICIPAL FUND

Arizona Intermediate-Term Municipal seeks to obtain as high a level of
current income exempt from Arizona and regular federal income tax as is
consistent with prudent investment management and conservation of shareholders'
capital.

AMERICAN CENTURY -- BENHAM FLORIDA
MUNICIPAL MONEY MARKET FUND

Florida Municipal Money Market is a money market fund, which seeks to obtain
as high a level of current income exempt from regular federal income tax as is
consistent with prudent investment management and conservation of shareholders'
capital. The fund intends to invest so as to qualify its shares for an exemption
from the Florida intangible personal property tax (the "Florida Intangibles
Tax"). THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE
NET ASSET VALUE PER SHARE.

AMERICAN CENTURY -- BENHAM FLORIDA
INTERMEDIATE-TERM MUNICIPAL FUND

Florida Intermediate-Term Municipal seeks to obtain as high a level of
current income exempt from regular federal income tax as is consistent with
prudent investment management and conservation of shareholders' capital. The
fund intends to invest so as to qualify its shares for an exemption from the
Florida Intangibles Tax.

AMERICAN CENTURY -- BENHAM NEW YORK
MUNICIPAL MONEY MARKET FUND

New York Municipal Money Market is a money market fund that seeks high
current tax-free income for New York residents while maintaining a stable $1.00
share price. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE PER SHARE.

AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.

For ease of reference, the funds sometimes will be referred to in this
Prospectus by their investment category or fund type. Florida Municipal Money
Market and Florida Intermediate-Term Municipal are referred to as the "Florida
Funds." Florida Municipal Money Market and New York Municipal Money Market are
called the "Money Market Funds." Arizona Intermediate-Term Municipal and Florida
Intermediate-Term Municipal are referred to as the "Variable-Price Funds."

ARIZONA INTERMEDIATE-TERM MUNICIPAL, THE FLORIDA FUNDS AND NEW YORK MONEY
MARKET CONCENTRATE THEIR INVESTMENTS GEOGRAPHICALLY BY INVESTING IN SECURITIES
ISSUED BY AGENCIES, INSTRUMENTALITIES AND MUNICIPALITIES OF THE STATES OF
ARIZONA, FLORIDA AND NEW YORK RESPECTIVELY. BECAUSE OF THIS CONCENTRATION, THEY
MAY BE RISKIER THAN SIMILAR MUTUAL FUNDS WITH NO GEOGRAPHIC CONCENTRATION.

There is no assurance that the funds will achieve
their respective investment objectives.

NO PERSON IS AUTHORIZED BY THE FUNDS TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY OR ON BEHALF OF THE FUNDS, AND YOU SHOULD NOT RELY
ON ANY OTHER INFORMATION OR REPRESENTATION.

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objectives of the Funds ........................................ 2
Transaction and Operating Expense Table ................................... 4
Financial Highlights ...................................................... 5

INFORMATION REGARDING THE FUNDS

Investment Policies of the Funds .......................................... 8
Arizona Intermediate-Term Municipal .................................... 8
Florida Municipal Money Market,
Florida Intermediate-Term Municipal .................................... 9
New York Municipal Money Market ........................................ 10
Portfolio Investment Quality and Maturity
Guidelines ............................................................. 11
Money Market Funds ..................................................... 11
Variable-Price Funds ................................................... 11
Risk Factors and Investment Techniques .................................... 11
Basic Fixed Income Investment Risks .................................... 12
Interest Rate Risk ............................................. 12
Credit Risk .................................................... 12
Concentration Risk ............................................. 12
Call Risk ...................................................... 12
Municipal Securities ................................................ 12
Tax-Exempt Securities .................................................... 14
Other Investment Practices, Their Characteristics
and Risks ........................................................ 14
Portfolio Turnover .................................................. 14
When-Issued and Forward Commitment
Agreements ....................................................... 14
Interest Rate Futures Contracts and Options Thereon ................. 15
Restricted Securities ............................................... 15
Cash Management ..................................................... 16
Other Techniques .................................................... 16
Performance Advertising .................................................. 16

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

American Century Investments .............................................. 18
Investing in American Century ............................................. 18
How to Open an Account .................................................... 18
By Mail ........................................................ 18
By Wire ........................................................ 18
By Exchange .................................................... 19
In Person ...................................................... 19
Subsequent Investments .............................................. 19
By Mail ........................................................ 19
By Telephone ................................................... 19
By Online Access ............................................... 19
By Wire ........................................................ 19
In Person ...................................................... 19
Automatic Investment Plan ........................................... 19
How to Exchange From One Account to Another .............................. 19
By Mail ........................................................ 20
By Telephone ................................................... 20
By Online Access ............................................... 20
How to Redeem Shares ..................................................... 20
By Mail ........................................................ 20
By Telephone ................................................... 20
By Check-A-Month ............................................... 20
Other Automatic Redemptions .................................... 20
Redemption Proceeds ................................................. 20
By Check ....................................................... 20
By Wire and ACH ................................................ 20
Redemption of Shares in Low-Balance Accounts ........................ 21
Signature Guarantee ...................................................... 21
Special Shareholder Services ............................................. 21
Automated Information Line ..................................... 21
Online Account Access .......................................... 21
CheckWriting ................................................... 21
Open Order Service ............................................. 22
Tax-Qualified Retirement Plans ................................. 22
Important Policies Regarding Your Investments ............................ 22
Reports to Shareholders .................................................. 23
Employer-Sponsored Retirement Plans and
Institutional Accounts ................................................. 23

ADDITIONAL INFORMATION YOU SHOULD KNOW

Share Price ............................................................... 25
When Share Price Is Determined ......................................... 25
How Share Price Is Determined .......................................... 25
Where to Find Information About Share Price ............................ 26
Distributions ............................................................. 26
Taxes ..................................................................... 26
Tax-Deferred Accounts .................................................. 26
Taxable Accounts ....................................................... 27
Special Tax Information ................................................... 28
Municipal Securities ................................................... 28
AMT Liability .......................................................... 28
Arizona Intermediate-Term and New York Municipal ....................... 28
Florida Funds .......................................................... 28
Management ................................................................ 29
Investment Management .................................................. 29
Code of Ethics ......................................................... 30
Transfer and Administrative Services ................................... 30
Year 2000 Issues ....................................................... 31
Distribution of Fund Shares ............................................... 31
Further Information About American Century ................................ 32

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE

Arizona
Intermediate-
Term Municipal,
Florida New York Florida
Municipal Municipal Intermediate-
Money Market Money Market Term Municipal
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases ......................... none none none
Maximum Sales Load Imposed on Reinvested Dividends .............. none none none
Deferred Sales Load ............................................. none none none
Redemption Fee(1) ............................................... none none none
Exchange Fee .................................................... none none none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):
Management Fees(2) .............................................. 0.50% 0.50% 0.51%
12b-1 Fees ...................................................... none none none
Other Expenses .................................................. 0.01% 0.00%(3) 0.01%
Total Fund Operating Expenses ................................... 0.51% 0.50% 0.52%

EXAMPLE:
You would pay the following expenses on a 1 year $ 5 $ 5 $ 5
$1,000 investment, assuming a 5% annual return 3 years 16 16 17
and redemption at the end of each time period: 5 years 29 28 29
10 years 64 63 65
</TABLE>

(1) Redemption proceeds sent by wire are subject to a $10 processing fee.

(2) A portion of the management fee may be paid by American Century Investment
Management, Inc. to unaffiliated third parties who provide recordkeeping
and administrative services that would otherwise be performed by an
affiliate of the manager. See "Management -- Transfer and Administrative
Services," page 30.

(3) Other expenses, which include the fees and expenses (including legal
counsel fees) of those Trustees who are not "interested persons" as defined
in the Investment Company Act of 1940, are expected to be less than 0.01 of
1% of average net assets for the current fiscal year.

The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares offered by this Prospectus.
The example set forth above assumes reinvestment of all dividends and
distributions and uses a 5% annual rate of return as required by SEC
regulations.

NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions, or 12b-1 fees. The Investor
Class is currently the only class of shares offered by the funds.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

FINANCIAL HIGHLIGHTS

ARIZONA INTERMEDIATE-TERM MUNICIPAL

The Financial Highlights for the year ended May 31, 1998, have been audited
by PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before May 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the years ended May 31, except
as noted.

1998 1997 1996 1995 1994(1)

PER-SHARE DATA

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..................$ 10.44 $ 10.31 $ 10.35 $ 10.13 $ 10.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations

Net Investment Income ............................... 0.46 0.45 0.51 0.51 0.07

Net Realized and Unrealized Gain (Loss)
on Investment Transactions .......................... 0.28 0.13 (0.03) 0.22 0.13
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .................... 0.74 0.58 0.48 0.73 0.20
---------- ---------- ---------- ---------- ----------
Distributions

From Net Investment Income .......................... (0.46) (0.45) (0.51) (0.51) (0.07)

From Net Realized Gains on
Investment Transactions ............................. (0.05) -- (0.01) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions ................................. (0.51) (0.45) (0.52) (0.51) (0.07)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ........................$ 10.67 $ 10.44 $ 10.31 $ 10.35 $ 10.13
========== ========== ========== ========== ==========
Total Return(2) ..................................... 7.19% 5.77% 4.65% 7.52% 1.99%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.54% 0.66% 0.14% -- --

Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver) ............................. 0.60% 0.79% 0.82% 1.01% 2.33%(3)

Ratio of Net Investment Income to Average Net Assets .. 4.33% 4.35% 4.85% 5.16% 5.08%(3)

Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver) ............................. 4.27% 4.22% 4.17% 4.15% 2.75%(3)

Portfolio Turnover Rate ............................... 39% 81% 36% 33% 18%

Net Assets, End of Period (in thousands) ..............$ 40,047 $ 30,555 $ 25,789 $ 19,778 $ 7,187
</TABLE>

(1) April 11, 1994 (inception) through May 31, 1994.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

FLORIDA MUNICIPAL MONEY MARKET

1998 1997 1996 1995 1994(1)

PER-SHARE DATA

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..................$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Income From Investment Operations

Net Investment Income ............................... 0.03 0.03 0.04 0.04 --
----------- ----------- ----------- ----------- -----------
Distributions

From Net Investment Income .......................... (0.03) (0.03) (0.04) (0.04) --
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ........................$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Return(2) ..................................... 3.31% 3.55% 3.86% 3.71% 0.40%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.51% 0.12% 0.01% -- --

Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver) ............................. 0.53% 0.66% 0.71% 0.88% 1.58%(3)

Ratio of Net Investment Income to Average Net Assets .. 3.25% 3.48% 3.75% 3.93% 2.99%(3)

Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver) ............................. 3.23% 2.94% 3.05% 3.05% 1.41%(3)

Net Assets, End of Period (in thousands) ..............$ 109,684 $ 112,129 $ 99,993 $ 45,147 $ 5,565
</TABLE>

(1) April 11, 1994 (inception) through May 31, 1994.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

FLORIDA INTERMEDIATE-TERM MUNICIPAL

1998 1997 1996 1995 1994(1)

PER-SHARE DATA

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..................$ 10.34 $ 10.18 $ 10.30 $ 10.11 $ 10.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations

Net Investment Income ............................... 0.45 0.46 0.52 0.52 0.07

Net Realized and Unrealized Gain(Loss)
on Investment Transactions .......................... 0.38 0.20 (0.08) 0.19 0.11
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .................... 0.83 0.66 0.44 0.71 0.18
---------- ---------- ---------- ---------- ----------
Distributions

From Net Investment Income .......................... (0.45) (0.46) (0.52) (0.52) (0.07)

From Net Realized Capital Gains ..................... (0.16) (0.04) (0.04) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions ................................. (0.61) (0.50) (0.56) (0.52) (0.07)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ........................$ 10.56 $ 10.34 $ 10.18 $ 10.30 $ 10.11
========== ========== ========== ========== ==========
Total Return(2) ..................................... 8.20% 6.63% 4.34% 7.31% 1.79%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.54% 0.65% 0.13% -- --

Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver) ............................. 0.58% 0.86% 0.88% 1.09% 1.92%(3)

Ratio of Net Investment Income to Average Net Assets .. 4.28% 4.42% 5.05% 5.23% 5.02%(3)

Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver) ............................. 4.24% 4.21% 4.30% 4.14% 3.10%(3)

Portfolio Turnover Rate ............................... 154% 82% 66% 37% 6%

Net Assets, End of Period (in thousands) ..............$ 29,605 $ 16,513 $ 10,319 $ 9,532 $ 5,892
</TABLE>

(1) April 11, 1994 (inception) through May 31, 1994.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 7

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

The funds have adopted certain investment restrictions that are set forth in
the Statement of Additional Information. Those restrictions, as well as the
investment objectives of the funds identified on page 2 of this Prospectus and
any other investment policies designated as "fundamental" in this Prospectus or
in the Statement of Additional Information, cannot be changed without
shareholder approval. The funds have implemented additional investment policies
and practices to guide their activities in the pursuit of their respective
investment objectives. These policies and practices, which are described
throughout this Prospectus, are not designated as fundamental policies and may
be changed without shareholder approval.

For an explanation of the securities ratings referred to in the following
discussion, see "Other Information" in the Statement of Additional Information.

Each fund is a "non-diversified company" as defined in the Investment
Company Act of 1940 (the "Investment Company Act"), which means the Investment
Company Act does not limit the proportion of a fund's assets that may be
invested in the securities of a single issuer. However, the funds intend to meet
federal tax requirements for qualification as a regulated investment company, as
described in the Statement of Additional Information.

ARIZONA INTERMEDIATE-TERM MUNICIPAL

Arizona Intermediate-Term Municipal is designed for individuals in upper tax
brackets seeking income free from Arizona state and regular federal income
taxes, although Arizona Intermediate-Term Municipal may generate some taxable
income. Because of this emphasis on tax-exempt income, Arizona Intermediate-Term
Municipal does not constitute a balanced investment.

Arizona Intermediate-Term Municipal intends to remain fully invested in
municipal obligations (obligations issued by or on behalf of a state, its
political subdivisions, agencies, and instrumentalities). As a fundamental
policy, Arizona Intermediate-Term Municipal will invest at least 80% of its net
assets in obligations with interest exempt from the regular federal income tax.
Arizona Intermediate-Term Municipal is not limited, however, in its investments
in securities that are subject to the Federal Alternative Minimum Tax (AMT).

In addition, Arizona Intermediate-Term Municipal will invest at least 65% of
its net assets in Arizona municipal obligations (obligations issued by or on
behalf of Arizona; its political subdivisions, agencies and instrumentalities;
or U.S. possessions or territories such as Puerto Rico). The remaining 35% of
its net assets may be invested in (1) obligations issued by other states and
their political subdivisions and (2) U.S. government securities.

Arizona Intermediate-Term Municipal is authorized under normal conditions to
invest as much as 100% of its net assets in municipal obligations for which the
interest is a tax preference item for purposes of the AMT. If you are or become
subject to the AMT, a portion of your income distributions that are exempt from
the regular federal income tax may not be exempt from the AMT. Interest from AMT
bonds is considered to be exempt from federal income tax for purposes of the 80%
policy noted above.

Because Arizona Intermediate-Term Municipal invests primarily in Arizona
municipal securities, political and economic conditions and developments within
Arizona affect the Arizona Fund's yield and share price. The following summary
is derived from official statements of the state of Arizona as well as from
other publicly available documents. This summary has not been independently
verified by the manager and does not purport to be a complete description of the
conditions and developments in Arizona that may affect Arizona Intermediate-Term
Municipal.

8 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

Arizona has been, and is projected to continue to be, one of the faster-growing
areas in the United States. During the last several decades, the state has
outpaced most other regions of the country in population and personal income
growth, gross state product, and job creation, although growth has slowed
somewhat in recent years. The Arizona economy continues to diversify away from
its historical reliance on the mining and agricultural employment sectors.
Significant job growth has occurred in the areas of aerospace, information
technology, construction, finance, insurance and real estate.

Under its constitution, the state of Arizona is not permitted to issue
general obligation bonds secured by the full faith and credit of the state.
However, certain agencies and instrumentalities of the state are authorized to
issue bonds secured by revenues from specific projects and activities, and state
and local government units may enter into lease transactions. The particular
source of payments and security for an Arizona municipal obligation is detailed
in the instruments themselves and in related offering materials.

Limitations imposed under Arizona law on taxation and bond indebtedness may
affect the ability of the issuers to generate revenues to satisfy their debt
obligations. Arizona is required by law to maintain a balanced budget. In the
past, the state has instituted a combination of spending reductions and tax
increases to avoid potential budgetary shortfalls and may require doing so
again.

For further information about the risks associated with investing in Arizona
obligations, please see the Statement of Additional Information.

FLORIDA MUNICIPAL MONEY MARKET FLORIDA INTERMEDIATE-TERM MUNICIPAL

The Florida Funds seek to obtain as high a level of current income exempt
from regular federal income tax as is consistent with prudent investment
management and conservation of shareholders' capital. In addition, fund shares
are intended to be exempt from the Florida Intangibles Tax.

The Florida Funds are designed for individuals in upper tax brackets seeking
income free from regular federal income tax, although the Florida Funds may
generate some taxable income. The Florida Funds also provide an investment that
is intended to be exempt from the Florida Intangibles Tax. Because of this
emphasis on tax-exempt income, the Florida Funds by themselves do not constitute
a balanced investment plan.

Each Florida Fund intends to remain fully invested in municipal obligations
(obligations issued by or on behalf of a state, its political subdivisions,
agencies, and instrumentalities). As a fundamental policy, each Florida Fund
will invest at least 80% of its net assets in obligations with interest exempt
from the regular federal income tax. The Florida Funds are not limited, however,
in their investments in securities that are subject to the AMT.

In addition, each Florida Fund will invest at least 65% of its net assets in
Florida municipal obligations (obligations issued by or on behalf of Florida,
its political subdivisions, agencies and instrumentalities, or U.S. possessions
or territories such as Puerto Rico). The remaining 35% of each Florida Fund's
net assets may be invested in (1) obligations issued by other states and their
political subdivisions and (2) U.S. government securities.

Each Florida Fund is authorized under normal conditions to invest as much as
100% of its net assets in municipal obligations for which the interest is a tax
preference item for purposes of the AMT. If you are or become subject to the
AMT, a portion of your income distributions that are exempt from the regular
federal income tax may not be exempt from the AMT. Interest from AMT bonds is
considered to be exempt from federal income tax purposes of the 80% policy noted
above.

As discussed more fully on page 28 under "Special Tax Information," a
Florida Fund may need to sell certain investments near the end of each calendar
year so that on January 1 of each year, its portfolio consists only of
investments that are exempt from the Florida Intangibles Tax. As a result, a
fund could incur additional costs or taxable income or gains.

Because the Florida Funds invest primarily in Florida municipal securities,
political and economic conditions and developments within the state of Florida
affect the funds' yields and share prices. The following summary is derived from
independent municipal credit reports but has not been independently verified by
the manager and does not purport to be a complete description of the conditions
and

PROSPECTUS INFORMATION REGARDING THE FUNDS 9

developments in Florida that may affect the Florida Funds.

Historically, the Florida economy has been dependent upon agriculture and
seasonal tourism. These industries are vulnerable to widespread crop failures,
severe weather conditions and other agriculture-related problems, and trends and
difficulties in the tourism industry. In recent years, the economy has broadened
into a service and trade economy with substantial insurance, banking and export
participation as well as a tourism industry that operates less seasonally.

Population growth was significant in the 1980s and is expected to continue
but at reduced rates. The retiree component of the population is expected to
continue to be a major factor. The population growth and expanding economy have
brought pressures for more infrastructure, educational facilities and other
needs. Therefore, construction is very important to the Florida economy but is
vulnerable to declines in economic and population growth and has been weak in
recent years.

Florida is heavily dependent upon sales tax revenues, making the state's
general fund vulnerable to recession and presenting difficulties in expanding
the tax base in an economy increasingly geared to services. This dependence on
sales tax has resulted in budgetary shortfalls in the past; Florida has reacted
to preserve an adequate financial position primarily through expenditure
reductions and by doubling the Florida Intangibles Tax.

For further information about the risks associated with investing in Florida
obligations, please see the Statement of Additional Information.

NEW YORK MUNICIPAL MONEY MARKET

New York Municipal Money Market is a money market fund that seeks high
current tax-free income for New York residents while maintaining a stable $1.00
share price.

New York Municipal Money Market is designed for individuals in upper tax
brackets seeking income free from New York state and regular federal income
taxes, although New York Municipal Money Market may generate some taxable
income. Because of this emphasis on tax-exempt income, New York Municipal Money
Market does not constitute a balanced investment.

New York Municipal Money Market intends to remain fully invested in
municipal obligations (obligations issued by or on behalf of a state, its
political subdivisions, agencies and instrumentalities). As a fundamental
policy, New York Municipal Money Market will invest at least 80% of its net
assets in obligations with interest exempt from the regular federal income tax.
New York Municipal Money Market is not limited, however, in its investments in
securities that are subject to the federal AMT.

In addition, New York Municipal Money Market will invest at least 65% of its
net assets in New York municipal obligations (obligations issued by or on behalf
of the state of New York, its political subdivisions, agencies and
instrumentalities or U.S. possessions or territories such as Puerto Rico). The
remaining 35% of its net assets may be invested in (1) obligations issued by
other states and their political subdivisions and (2) U.S. government
securities.

New York Municipal Money Market is authorized under normal conditions to
invest as much as 100% of its net assets in municipal obligations for which the
interest is a tax preference item for purposes of the AMT. If you are or become
subject to the AMT, a portion of your income distributions that are exempt from
the regular federal income tax may not be exempt from the AMT. Interest from AMT
bonds is considered to be exempt from federal income tax for purposes of the 80%
policy noted above.

Because New York Municipal Money Market invests primarily in New York
municipal securities, political and economic developments within the state of
New York affect the fund's yield. The following summary is derived from
independent municipal credit reports but has not been independently verified by
the manager and does not purport to be a complete description of the conditions
and developments in New York that may affect New York Municipal Money Market.

Like many issuers, New York state and its municipal issuers have experienced
financial difficulties. In 1975, financial difficulties ultimately resulted in
low credit ratings and loss of access to the public debt markets. Fiscal reforms
and better economic conditions allowed New York and its municipalities to
reestablish financial stability in the early 1980s. Similarly, in the early
1990s the state and New York

10 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

City experienced a moderate economic decline and another period of financial
difficulties. While conditions have been improving since 1993, below-average
economic performance and tight budgetary conditions persisted for a number of
years. Both the state and the city benefited in 1997 from a strong national
economy and financial services sector.

Any events that affect the revenue received by the state and local bodies in
New York may have an impact on the fund. For example, recent developments at the
federal level, particularly federal welfare reform, may have the effect of
offsetting any revenue gains that may be achieved by the state of New York. The
ability of state and local entities to make scheduled payments of interest and
principal on their outstanding debt obligations could be negatively impacted by
such events.

For further information about the risks associated with investing in New
York obligations, please see the Statement of Additional Information.

PORTFOLIO INVESTMENT QUALITY AND
MATURITY GUIDELINES

The Money Market Funds may be appropriate for investors seeking share price
stability who can accept the lower yields that short-term obligations typically
provide. To offer investors the potential for higher yields, the Variable-Price
Funds invest in obligations with longer maturities.

MONEY MARKET FUNDS

In selecting investments for the Money Market Funds, the manager adheres to
regulatory guidelines concerning the quality and maturity of money market fund
investments as well as to internal guidelines designed to minimize credit risk.

In particular, each fund:

(1) Buys only U.S. dollar-denominated obligations with remaining maturities of
13 months or less (and variable- and floating-rate obligations with demand
features that effectively shorten their maturities to 13 months or less);

(2) Maintains a dollar-weighted average maturity of 90 days or less; and

(3) Restricts its investments to high-quality obligations determined by the
manager, pursuant to procedures established by the Board of Trustees, to
present minimal credit risks.

To be considered high quality, an obligation must be:

(1) A U.S. government obligation; or

(2) Rated (or issued by an issuer rated with respect to a class of comparable
short-term obligations) in one of the two highest rating categories for
short-term obligations by at least two nationally recognized statistical
rating agencies ("rating agencies") (or one if only one has rated the
obligation); or

(3) An obligation judged by the manager, pursuant to guidelines established by
the Board of Trustees, to be of quality comparable to the securities
listed above.

VARIABLE-PRICE FUNDS

The Variable-Price Funds' maturity criteria are as follows:

Arizona Intermediate-Term Municipal invests primarily in intermediate-term
Arizona municipal obligations with maturities of four or more years. The manager
expects the fund to maintain a weighted average portfolio maturity that ranges
from five to 10 years.

Florida Intermediate-Term Municipal invests primarily in intermediate-term
Florida municipal obligations with maturities of four or more years. The manager
expects the fund to maintain a weighted average portfolio maturity that ranges
from five to 10 years.

In terms of credit quality, each Variable-Price Fund restricts its
investments to:

(1) Municipal bonds rated, when acquired, within the four highest categories
designated by a rating agency;

(2) Municipal notes (including variable-rate demand obligations) and
tax-exempt commercial paper rated, when acquired, within the two highest
categories designated by a rating agency; and

(3) An obligation judged by the manager, under the direction of the Board of
Trustees, to be of comparable quality.

RISK FACTORS AND INVESTMENT TECHNIQUES

Each fund described in this Prospectus offers a range of potential for
income and total return based

PROSPECTUS INFORMATION REGARDING THE FUNDS 11

on its maturity criteria. The market value of the investments of each fund will
change over time in response to a number of factors, which are summarized in the
following paragraphs.

BASIC FIXED INCOME INVESTMENT RISKS

The Money Market Funds may be appropriate for investors who would like to
(1) earn income at tax-exempt money market rates while preserving their
investment or (2) use a money market fund as part of a long-term, balanced
investment portfolio consisting of money market instruments, bonds and stocks.

The Variable-Price Funds offer a range of potential for income and total
return based on their respective quality and maturity criteria.

INTEREST RATE RISK

One feature the funds have in common is their susceptibility to changing
interest rates. For both Money Market Funds, interest rate changes affect the
level of income the funds generate for shareholders. For the Variable-Price
Funds, changing interest rates affect not only the level of income the funds
generate for shareholders, but their share prices as well. In general, when
interest rates rise, the Variable-Price Funds' share prices decline; when
interest rates decline, their share prices rise.

This pattern is due to the time value of money. A bond's worth is determined
by the present value of its future cash flows. Consequently, changing interest
rates have a greater effect on the present value of a long-term bond than a
short-term bond.

CREDIT RISK

In selecting investments for each fund, the manager carefully considers the
creditworthiness of parties and their reliability for the timely payment of
interest and repayment of principal.

In many cases, these parties include not only the issuer of the obligation,
but a bank or other financial intermediary who offers a letter of credit or
other form of guarantee on the obligation.

A security's ratings reflect the opinions of the rating agencies that issue
them and are not absolute standards of quality. Because of the cost of obtaining
credit ratings, some issuers forego them. Under the direction of the Board of
Trustees, the manager may buy unrated bonds for the funds if these securities
are judged to be of a quality consistent with the funds' investment policies.
Similarly, on behalf of the Variable-Price Funds, the manager may purchase
securities whose ratings are not consistent with the funds' rating criteria but
that the manager judges, under the direction of the Board of Trustees, to
present credit risks consistent with the funds' quality standards.

The Variable-Price funds described in this Prospectus may invest up to 15%
of their total assets in unrated securities. Each of the Money Market Funds may
invest up to 10% of its total assets in unrated securities. Unrated securities
may be less liquid than rated securities.

The Variable-Price Funds may invest in securities rated Baa or BBB (the
lowest investment grade category). Each Variable-Price Fund will limit its
investment in securities rated Baa or BBB to 25% of a fund's total assets. Such
securities are medium-grade investment obligations that may have speculative
characteristics. Changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity for such obligations to make principal and
interest payments.

CONCENTRATION RISK

Each of the funds described in this Prospectus may invest 25% or more of its
total assets in obligations that generate income from similar types of projects
(in particular, projects in health care, electric, water/sewer, education and
transportation). Political or economic developments affecting a single issuer or
industry or similar types of projects may have a significant effect on fund
performance.

CALL RISK

Many municipal obligations are issued with a call feature (features that
include a date on which the issuer has reserved the right to redeem the
obligation prior to maturity). An obligation may be called for redemption before
the manager would otherwise choose to eliminate it from a fund's holdings. A
call also may reduce an obligation's yield to maturity.

MUNICIPAL SECURITIES

Municipal securities are issued to raise money for a variety of public
purposes, including general financing for state and local governments as well as

12 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

financing for specific projects and public facilities. Municipal securities may
be backed by the full taxing power of a municipality, the revenues from a
specific project or the credit of a private organization. The following
discussion provides a brief description of some securities the funds may buy.
The funds are not limited by this discussion, and they may buy other types of
securities and enter into other types of transactions that meet their respective
quality, maturity and liquidity requirements.

MUNICIPAL NOTES typically have maturities of 13 months or less and are used
to provide short-term capital or to meet cash-flow demands.

GENERAL OBLIGATION BONDS are backed by the taxing power of the issuer.

REVENUE BONDS are backed by the revenues derived from a specific project,
system or facility. Industrial development bonds are a type of revenue bond that
are backed by the credit of a private issuer.

VARIABLE- AND FLOATING-RATE DEMAND OBLIGATIONS have interest rate adjustment
formulas designed to stabilize their market values. These obligations normally
have maturities in excess of one year but carry demand features permitting the
holders to demand repayment of principal at any time or at specified intervals.
With respect to the Money Market Funds, such intervals may not exceed 13 months.

TENDER OPTION BONDS are created by combining an intermediate- or long-term,
fixed-rate tax-exempt bond with a tender agreement that gives the holder the
option to tender the bond at face value. Tender option bonds purchased by the
funds are structured with rates that are reset weekly or at other regular
intervals.

A sponsor may terminate a tender option agreement if, for example, the
issuer of the underlying bond defaults on interest payments, or if the
underlying bond is downgraded or becomes taxable. Under such circumstances, a
fund might then own a bond that does not meet its quality or maturity criteria.

The manager monitors the credit quality of bonds underlying the funds'
tender option bond holdings and will sell or put back a tender option bond if
the rating on the underlying bond falls below the second-highest rating
designated by a rating agency.

MUNICIPAL LEASE OBLIGATIONS are issued by state and local governments to
acquire land and a wide variety of equipment and facilities. These obligations
typically are not fully backed by the issuing municipality's ability to assess
taxes to meet its debt obligations. If the state or local government does not
make appropriations for the following years lease payments, the lease may
terminate, with the possibility of default on the lease obligation and loss to
investors.

ZERO-COUPON MUNICIPAL SECURITIES do not make regular interest payments.
Instead, they are sold at a deep discount to their face value. In calculating
daily dividends, the funds take into account, as income, a portion of the
difference between these securities' purchase prices and face values. Because
zero-coupon securities do not pay current income, their prices can be very
volatile when interest rates change.

The Variable-Price Funds may invest in INVERSE FLOATERS to generate higher
tax-exempt yields than are offered by other instruments. Inverse floaters bear
interest rates that move inversely to market interest rates. Generally, the
interest rate on the inverse floater is computed as the difference between an
above-market fixed rate of interest and a floating rate determined by reference
to a market-based or bond-specific interest rate.

Because inverse floaters are long-term bonds, the value of these securities
may be volatile when market interest rates change. In addition, there is no
guarantee that the manager will be able to find a ready buyer for inverse
floaters. The Money Market Funds may not invest in inverse floaters.

AMT SECURITIES typically are tax-exempt "private activity" bonds issued
after August 7, 1986, whose proceeds are directed at least in part to a private,
for-profit organization. Although the interest income from AMT Securities is
exempt from regular federal income tax, that income is a tax preference item for
purposes of the AMT.

In addition, corporate investors should note that all income from a fund
might be part of an adjustment to AMT under Section 55 of the Internal Revenue
Code. The AMT is a special separate tax that applies to certain taxpayers that
have certain adjustments to income or tax preference items. Each fund is
authorized to invest as much as 100% of its assets in AMT Securities.

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

TAX-EXEMPT SECURITIES

Historically, interest paid on securities issued by states, cities,
counties, school districts and other political subdivisions of the United States
has been exempt from federal income tax. Legislation since 1985, however,
affects the tax treatment of certain types of municipal bonds issued after
certain dates and, in some cases, subjects the income from certain bonds to
differing tax treatment depending on the tax status of its recipient.

The funds should be expected to invest at least some portion of their assets
in securities that, in the hands of some holders, would be subject to the AMT,
as long as management determines it is in the best interest of shareholders
generally to invest in such securities. See "Taxes," page 26.

Each fund may quote tax-equivalent yields, which show the taxable yields an
investor would have to earn before taxes to equal the fund's tax-free yields. As
a prospective investor in the funds, you should determine whether your
tax-equivalent yield is likely to be higher with a taxable or with a tax-exempt
fund. To determine this, you may use the formulas depicted below.

For the Florida Funds, the tax-equivalent yield is based on each fund's
current tax-free yield, your federal income tax bracket, and the Florida
Intangibles Tax applicable to a taxable investment. The formula is:

Fund's Tax-Free Yield Florida Your Tax-
--------------------------- + Intangibles Tax = Equivalent
100% - Federal Rate Yield
Tax Rate

For Arizona Intermediate-Term Municipal, the tax-equivalent yield is based
on the current double tax-exempt yield and your combined federal and state
marginal tax rate. Assuming that all of Arizona Intermediate-Term Municipal's
dividends are tax-exempt in Arizona (which may not always be the case) and that
your Arizona taxes are fully deductible for federal income tax purposes, you can
calculate your tax-equivalent yield for Arizona Intermediate-Term Municipal
using the following equation:

Fund's Double Tax-Free Yield Your Tax-
- --------------------------------------------------------- = Equivalent
(100% - Federal Tax Rate) (100% - Arizona Tax Rate) Yield

For New York Municipal Money Market, the tax-equivalent yield is based on
the current triple tax-exempt yield and your combined federal and state marginal
tax rate. Assume that all of New York Municipal Money Market's dividends are
tax-exempt in New York (which may not always be true) and that your New York
state and New York City income taxes are fully deductible for federal income tax
purposes. You then can calculate your tax-equivalent yield for New York
Municipal Money Market using the following equation:

Fund's Triple Tax-Free Yield Your Tax-
- --------------------------------------------------- = Equivalent
(100% -Federal) (100% - NY State) (100% - NYC) Yield
Tax Rate Tax Rate Tax Rate

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

For additional information regarding the investment practices of any of the
funds, see the Statement of Additional Information.

PORTFOLIO TURNOVER

The portfolio turnover rates of the Variable-Price Funds are shown in the
financial information of this Prospectus.

Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the particular fund's
objectives. The manager believes that the rate of portfolio turnover is
irrelevant when it determines a change is in order to achieve those objectives
and accordingly, the annual portfolio turnover rate cannot be accurately
predicted.

The portfolio turnover of each fund may be higher than other mutual funds
with similar investment objectives. Higher turnover would generate
correspondingly higher transaction costs that are borne directly by a fund.
Portfolio turnover also may affect the character of capital gains, if any,
realized and distributed by a fund since short-term capital gains are taxable as
ordinary income.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

Each of the funds may purchase new issues of securities on a when-issued or
forward commitment basis when, in the opinion of the manager, such

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

purchases will further the investment objectives of the fund. The price of
when-issued securities is established at the time the commitment to purchase is
made. Delivery of and payment for these securities typically occurs 15 to 45
days after the commitment to purchase. Market rates of interest on debt
securities at the time of delivery may be higher or lower than those contracted
for on the when-issued security. Accordingly, the value of such security may
decline prior to delivery, which could result in a loss to the fund. The manager
will segregate cash or appropriate assets in an amount at least equal to the
when-issued commitments. No income will accrue to the fund prior to delivery.

INTEREST RATE FUTURES CONTRACTS AND OPTIONS THEREON

The Variable-Price Funds may buy and sell interest rate futures contracts
relating to debt securities ("debt futures," i.e., futures relating to debt
securities, and "bond index futures," i.e., futures relating to indices on types
or groups of bonds) and write and buy put and call options relating to interest
rate futures contracts.

For options sold, a fund will segregate cash or appropriate liquid assets
equal to the value of securities underlying the option unless the option is
otherwise covered.

A fund will deposit in a segregated account with its custodian bank cash or
appropriate liquid assets in an amount equal to the fluctuating market value of
long futures contracts it has purchased, less any margin deposited on its long
position. It may hold cash or acquire such debt obligations for the purpose of
making these deposits.

The Variable-Price Funds may use futures and options transactions to
maintain cash reserves while remaining fully invested, to facilitate trading, to
reduce transaction costs, or to pursue higher investment returns when a futures
contract is priced more attractively than its underlying security or index.

Because futures contracts and options thereon can replicate movements in the
cash markets for the securities in which a fund invests without the large cash
investments required for dealing in such markets, they may subject a fund to
greater and more volatile risks than might otherwise be the case. The principal
risks related to the use of such instruments are (1) a possibly imperfect
offsetting correlation between movements in the market price of the portfolio
investments (held or intended) being hedged and in the price of the futures
contract or option; (2) possible lack of a liquid secondary market for closing
out futures or option positions; (3) the need of additional portfolio management
skills and techniques; and (4) losses due to unanticipated market price
movements. For a hedge to be completely effective, the price change of the
hedging instrument should equal the price change of the securities being hedged.
Such equal price changes are not always possible because the investment
underlying the hedging instrument may not be the same investment that is being
hedged.

The manager will attempt to create a closely correlated hedge but hedging
activities may not be completely successful in eliminating market value
fluctuation. The ordinary spreads between prices in the cash and futures
markets, due to the differences in the nature of those markets, are subject to
distortion. Due to the possibility of distortion, a correct forecast of general
interest rate trends by the manager may still not result in a successful
transaction. The manager may be incorrect in its expectations as to the extent
of various interest rate movements or the time span within which the movements
take place.

See the Statement of Additional Information for further information about
these instruments and their risks.

RESTRICTED SECURITIES

The funds may, from time to time, purchase securities that are subject to
restrictions on resale ("restricted securities"). The funds purchase these
securities when they present attractive investment opportunities that otherwise
meet the funds' criteria for selection. Restricted securities typically are
privately placed with and traded among qualified institutional investors rather
than the general public.

PROSPECTUS INFORMATION REGARDING THE FUNDS 15

based upon consideration of the readily available trading markets and the review
of any contractual restrictions. The staff also acknowledges that while the
Board retains ultimate responsibility, it may delegate this function to the
manager. Accordingly, the Board of Trustees has established guidelines and
procedures for determining the liquidity of these restricted securities and has
delegated the day-to-day function of determining the liquidity of these
restricted securities to the manager. The Board retains the responsibility to
monitor the implementation of the guidelines and procedures it has adopted.

Because the secondary market for restricted securities is often limited to
certain qualified institutional buyers, the liquidity of restricted securities
may be limited accordingly and a fund may, from time to time, hold restricted
securities that are illiquid.

No fund may invest more than 15% (10% for the Money Market Funds) of its net
assets in illiquid securities (securities that may not be sold within seven days
at approximately the price used in determining the net asset value of fund
shares).

CASH MANAGEMENT

Up to 10% of a fund's total assets may be invested in this manner.

OTHER TECHNIQUES

The manager may buy other types of securities or employ other portfolio
management techniques on behalf of the funds. When SEC guidelines require it to
do so, a fund will set aside cash or appropriate liquid assets in a segregated
account to cover its obligations. See the Statement of Additional Information
for a more detailed discussion of these investments and some of the risks
associated with them.

PERFORMANCE ADVERTISING

From time to time, the funds may advertise performance data. Fund
performance may be shown by presenting one or more performance measurements,
including cumulative total return or average annual total return, yield,
effective yield and tax-equivalent yield (for tax-exempt funds).

Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced the fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.

A quotation of yield reflects a fund's income over a stated period expressed
as a percentage of the fund's share price. In the case of the Money Market
Funds, yield is calculated by measuring the income generated by an investment in
the fund over a seven-day period (net of expenses). This income is then
annualized, that is, the amount of income generated by the investment over the
seven-day period is assumed to be generated over each similar period each week
throughout a full year and is shown as a percentage of the investment.

With respect to the Variable-Price Funds, yield is calculated by adding over
a 30-day (or one-month) period all interest and dividend income (net of fund
expenses) calculated on each day's market values, dividing this sum by the
average number of fund shares outstanding during the period, and expressing the
result as a percentage of the fund's share price on the last day of the 30-day
(or one-month) period. The percentage is then annualized. Capital gains and
losses are not included in the calculation.

The effective yield is calculated in a similar manner but, when annualized,
the income earned by the investment is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
on the assumed reinvestment.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules. Because yield accounting methods differ from the
methods used for other accounting purposes, a fund's yield may not equal the
income paid on its shares or the income reported in the fund's financial
statements.

A tax-equivalent yield demonstrates the taxable yield necessary to produce
after-tax yield equivalent to that of a mutual fund that invests in exempt
obligations. See "Tax-Exempt Securities," page 14, for a

INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

description of the formulas used in comparing yields to tax-equivalent yields.

The funds also may include in advertisements data comparing their
performance with the performance of non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations (such as Lipper Analytical Services or IBC's Money Fund Report)
and publications that monitor the performance of mutual funds. Performance
information may be quoted numerically or may be presented in a table, graph or
other illustration. In addition, fund performance may be compared to well-known
indices of market performance. Fund performance also may be compared, on a
relative basis, to other funds in our fund family. This relative comparison,
which may be based upon historical or expected fund performance, volatility or
other fund characteristics, may be presented numerically, graphically or in
text. Fund performance also may be combined or blended with other funds in our
fund family, and that combined or blended performance may be compared to the
same indices to which individual funds may be compared.

All performance information advertised by the funds is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

PROSPECTUS INFORMATION REGARDING THE FUNDS 17

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

The funds offered by this Prospectus are a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-2021 for a brochure or prospectuses for the other funds in the
American Century Investments family.

To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.

INVESTING IN AMERICAN CENTURY

The following sections explain how to invest in American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
Guide that you will receive when you open an account.

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Employer-Sponsored Retirement Plans and Institutional Accounts," page 23.

HOW TO OPEN AN ACCOUNT

To open an account, you must complete and sign an application, furnishing
your taxpayer identification number. (You also must certify whether you are
subject to withholding for failing to report income to the IRS.) Investments
received without a certified taxpayer identification number will be returned.

The minimum investment is $2,500 for the Money Market Funds and $5,000 for
the Variable-Price Funds.

The minimum investment requirements may be different for some types of
retirement accounts. Call an Investor Services Representative for information on
our retirement plans, which are available for individual investors or for those
investing through their employers.

Please note: If you register your account as belonging to multiple owners
(e.g., as joint tenants), you must provide us with specific authorization on
your application in order for us to accept written or telephone instructions
from a single owner. Otherwise, all owners will have to agree to any
transactions that involve the account (whether the transaction request is in
writing or over the telephone).

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111

o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

o REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see "Bank to Bank Information" on the following page.

o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

o BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):

* Taxpayer identification or Social Security
number

* If more than one account, account numbers and amount to be invested in
each account.

* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See this
page for more information on exchanges.

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street, Kansas City, Missouri 64111

4917 Town Center Drive, Leawood, Kansas 66211

1665 Charleston Road, Mountain View, California 94043

2000 S. Colorado Blvd., Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

Subsequent investments may be made by an automatic bank, payroll or
government direct deposit (see "Automatic Investment Plan" on this page) or by
any of the following methods. The minimum investment requirement for subsequent
investments is $250 for checks submitted without the investment slip portion of
a previous statement or confirmation and $50 for all other types of subsequent
investments.

BY MAIL

When making subsequent investments, enclose your check with the investment
slip portion of a previous statement or confirmation. If the investment slip is
not available, indicate your name, address and account number on your check or a
separate piece of paper. (Please be aware that the investment minimum for
subsequent investments is higher without an investment slip.)

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Investor Services Representative
or use our Automated Information Line.

BY ONLINE ACCESS

Upon completion of your application and once your account is open, you may
make investments online.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 18 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

By completing the application and electing to make investments
automatically, we will draw on your bank account regularly. Such investments
must be at least the equivalent of $50 per month. You also may choose an
automatic payroll or government direct deposit. If you are establishing a new
account, check the appropriate box under "Automatic Investments" on your
application to receive more information. If you would like to add a direct
deposit to an existing account, please call one of an Investor Services
Representative.

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

As long as you meet any minimum investment requirements, you may exchange
your fund shares to our other funds up to six times per year per account. An
exchange request will be processed as of the same day it is received, if it is
received before the funds' net asset values are calculated, which is one hour
prior to the close of the New York Stock Exchange for funds issued by American
Century Target Maturities Trust

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 19

and at the close of the Exchange for all of our other funds. See "When Share
Price Is Determined," page 25.

For any single exchange, the shares of each fund being acquired must have a
value of at least $100. However, we will allow investors to set up an Automatic
Exchange Plan between any two funds in the amount of at least $50 per month. See
our Investor Services Guide for further information about exchanges.

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

You can make exchanges over the telephone (either with an Investor Services
Representative or using our Automated Information Line--see page 21) upon
completion and receipt of your application or by calling us at 1-800-345-2021 to
get the appropriate form.

BY ONLINE ACCESS

You can make exchanges online. This service is established upon completion
and receipt of your application or by calling us at 1-800-345-2021 to get the
appropriate form.

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W-4P and a reason for withdrawal as
specified by the IRS.

BY MAIL

Your written instructions to redeem shares may be made either by a
redemption form, which we will send to you upon request or by a letter to us.
Certain redemptions may require a signature guarantee. Please see "Signature
Guarantee," page 21.

BY TELEPHONE

Upon completion of your application and once your account is open, you may
redeem your shares by calling an Investor Services Representative.

BY CHECK-A-MONTH

If you have at least a $10,000 balance in your Variable-Price Fund account,
you may redeem shares by Check-A-Month. There are no minimum balance
requirements for Check-A-Month for Money Market Fund accounts. A Check-A-Month
plan automatically redeems enough shares each month to provide you a check in an
amount you choose (minimum $50). To set up a Check-A-Month plan, please call and
request our Check-A-Month brochure.

OTHER AUTOMATIC REDEMPTIONS

If you have at least a $10,000 balance in your account, you may elect to
make redemptions automatically by authorizing us to send funds to you or to your
account at a bank or other financial institution. To set up automatic
redemptions, call an Investor Services Representative.

REDEMPTION PROCEEDS

Please note that shortly after a purchase of shares is made by check or
electronic draft (also known as an ACH draft) from your bank, we may wait up to
15 days or longer to send redemption proceeds (to allow your purchase funds to
clear). No interest is paid on the redemption proceeds after the redemption is
processed but before your redemption proceeds are sent.

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

Ordinarily, all redemption checks will be made payable to the registered
owner of the shares and will be mailed only to the address of record. For more
information, please refer to our Investor Services Guide.

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

Your bank usually will receive wired funds within 48 hours of transmission.
Funds transferred by ACH

20 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

may be received up to seven days after transmission. Wired funds are subject to
a $10 fee to cover bank wire charges, which is deducted from redemption
proceeds. Once the funds are transmitted, the time of receipt and the funds'
availability are not under our control.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

Whenever the shares held in an account have a value of less than the
required minimum, a letter will be sent advising you to bring the value of the
shares held in the account up to the minimum or to establish an automatic
investment that is the equivalent of at least $50 per month. See "How to Open an
Account," page 18. If action is not taken within 90 days of the letter's date,
the shares held in the account will be redeemed and proceeds from the redemption
will be sent by check to your address of record. We reserve the right to
increase the investment minimums.

SIGNATURE GUARANTEE

To protect your accounts from fraud, some transactions will require a
signature guarantee. A signature guarantee is required when redeeming more than
$100,000.

You can obtain a signature guarantee from a bank or trust company, credit
union, broker-dealer, securities exchange or association, clearing agency or
savings association, as defined by federal law.

For a more in-depth explanation of our signature guarantee policy, or if you
live outside the United States and would like to know how to obtain a signature
guarantee, please consult our Investor Services Guide.

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

SPECIAL SHAREHOLDER SERVICES

We offer several services to make your account easier to manage. These are
listed on the account application. You will find more information about each of
these services in our Investor Services Guide.

Our special shareholder services include:

AUTOMATED INFORMATION LINE

We offer an Automated Information Line, 24 hours a day, seven days a week,
at 1-800-345-8765. By calling the Automated Information Line, you may listen to
fund prices, yields and total return figures. You also may use the Automated
Information Line to make investments into your accounts (if we have your bank
information on file) and obtain your share balance, value and most recent
transactions. You also may exchange shares from one fund to another via the
Automated Information Line. Redemption instructions cannot be given via the
Automated Information Line.

ONLINE ACCOUNT ACCESS

You may contact us 24 hours a day, seven days a week at
www.americancentury.com to access daily share prices, receive updates on major
market indices and view historical performance of the fund. You can use your
personal access code and Social Security number to view your account balance and
account activity, make subsequent investments from your bank account or exchange
shares from one fund to another.

CHECKWRITING

We offer CheckWriting as a service option for your account in either of the
Money Market Funds. CheckWriting allows you to redeem shares in your account by
writing a draft ("check") against your account balance. (Shares held in
certificate form may not be redeemed by check.) There is no limit on the number
of checks you can write, but each one must be for at least $100.

When you write a check, you will continue to receive dividends on all shares
until your check is presented for payment to our clearing bank. If you redeem
all shares in your account by check, any accrued distributions on the redeemed
shares will be paid to you in cash on the next monthly distribution date.

If you want to add CheckWriting to an existing account that offers
CheckWriting, contact us by telephone or mail for an appropriate form. For a new
account, you will have CheckWriting upon completion and receipt by us of your
application. CheckWriting is not available for any account held in an IRA or
403(b) plan.

CheckWriting redemptions may be made only on checks provided by us.
Currently, there is no charge for checks or for the CheckWriting service.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 21

We will return checks drawn on insufficient funds or on funds from
investments made by means other than by wire within the previous 15 days.
Neither the company nor our clearing bank will be liable for any losses or
expenses associated with returned checks. Your account may be assessed a $15
service charge for checks drawn on insufficient funds.

A stop payment may be ordered on a check written against your account. We
will use reasonable efforts to stop a payment, but we cannot guarantee that we
will be able to do so. If we are successful in fulfilling a stop-payment order,
your account may be assessed a $15 fee.

OPEN ORDER SERVICE

Through our open order service, you may designate a price at which to buy
shares of a variable-priced fund by exchange from one of our money market funds,
or a price at which to sell shares of a variable-priced fund by exchange to one
of our money market funds. The designated purchase price must be equal to or
lower, or the designated sale price equal to or higher, than the variable-priced
fund's net asset value at the time the order is placed. If the designated price
is met within 90 calendar days, we will execute your exchange order
automatically at that price (or better). Open orders not executed within 90 days
will be canceled.

If the fund you have selected deducts a distribution from its share price,
your order price will be adjusted accordingly so the distribution does not
inadvertently trigger an open order transaction on your behalf. If you close or
re-register the account from which the shares are to be redeemed, your open
order will be canceled.

Because of their time-sensitive nature, open order transactions are accepted
only by telephone or in person. These transactions are subject to exchange
limitations described in each fund's prospectus, except that orders and
cancellations received before 2 p.m. Central time are effective the same day,
and orders or cancellations received after 2 p.m. Central time are effective the
next business day.

TAX-QUALIFIED RETIREMENT PLANS

Some funds are available for your tax-deferred retirement plan. Call or
write us and request the appropriate forms for:

* Individual Retirement Accounts (IRAs);

* 403(b) plans for employees of public school
systems and non-profit organizations; or

* Profit-sharing plans and pension plans for
corporations and other employers.

If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.

You also can transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

Every account is subject to policies that could affect your investment.
Please refer to the Investor Services Guide for further information about the
policies discussed below, as well as further detail about the services we offer

(1) We reserve the right for any reason to suspend the offering of shares for
a period of time, or to reject any specific purchase order (including
purchases by exchange). Additionally, purchases may be refused if, in the
opinion of the manager, they are of a size that would disrupt the
management of the fund.

(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and
redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all shareholders
or only certain series or classes of shareholders.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(4) Transactions requesting a specific price and date, other than open orders,
will be refused. Once you have mailed or otherwise transmitted your
transaction instructions to us, they may not be modified or canceled.

(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require evidence
satisfactory to us of the authority of the individual making the request.

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting

22 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for losses
due to unauthorized or fraudulent instructions. The company, its transfer
agent and manager will not be responsible for any loss due to instructions
they reasonably believe are genuine.

(7) All signatures should be exactly as the name appears in the registration.
If the owner's name appears in the registration as Mary Elizabeth Jones,
she should sign that way and not as Mary E. Jones.

(8) Unusual stock market conditions have in the past resulted in an increase
in the number of shareholder telephone calls. If you experience difficulty
in reaching us during such periods, you may send your transaction
instructions by mail, express mail or courier service, or you may visit
one of our Investor Centers. You also may use our Automated Information
Line if you have requested and received an access code and are not
attempting to redeem shares.

(9) If you fail to provide us with the correct certified taxpayer
identification number, we may reduce any redemption proceeds by $50 to
cover the penalty the IRS will impose on us for failure to report your
correct taxpayer identification number on information reports.

(10) We will perform special inquiries on shareholder accounts. A research fee
of $15 per hour may be applied.

REPORTS TO SHAREHOLDERS

At the end of each calendar quarter, we will send you a consolidated
statement that summarizes all of your American Century holdings, as well as an
individual statement for each fund you own that reflects all year-to-date
activity in your account. You may request a statement of your account activity
at any time.

With the exception of most automatic transactions and transactions by
CheckWriting, each time you invest, redeem, transfer or exchange shares, we will
send you a confirmation of the transactions. Transactions initiated by
CheckWriting will be confirmed on a monthly basis. See the Investor Services
Guide for more detail.

Carefully review all the information relating to transactions on your
statements and confirmations to ensure that your instructions were acted on
properly. Please notify us immediately in writing if there is an error. If you
fail to provide notification of an error with reasonable promptness (i.e.,
within 30 days of non-automatic transactions or within 30 days of the date of
your consolidated quarterly statement, in the case of automatic transactions),
we will deem you to have ratified the transaction.

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

Each year, we will send you an annual and a semiannual report relating to
your fund, each of which is incorporated herein by reference. The annual report
includes audited financial statements and a list of portfolio securities as of
the fiscal year end. The semiannual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You also will receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your fund.

EMPLOYER-SPONSORED RETIREMENT PLANS AND
INSTITUTIONAL ACCOUNTS

Information contained in our Investor Services Guide pertains to
shareholders who invest directly with American Century rather than through an
employer-sponsored retirement plan or through a financial intermediary.

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan, your ability to purchase shares of the
funds, exchange them for shares of other American Century funds, and redeem them
will depend on the terms of your plan.

If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance company or other financial intermediary, your ability
to

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 23

purchase, exchange and redeem shares will depend on your agreement with, and the
policies of, such financial intermediary.

You may reach an Institutional Service Representative by calling
1-800-345-3533 to request information about our funds and services, to obtain a
current prospectus or to get answers to any questions about our funds and
services that you are unable to obtain through your plan administrator or
financial intermediary.

24 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares also is referred to as their net asset value. Net
asset value is determined by calculating the total value of a fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except the funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange is open, usually
3 p.m. Central time. Net asset values for the Target Maturities funds are
determined one hour prior to the close of the Exchange.

Investments and requests to redeem or exchange shares will receive the share
price next determined after our receipt of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of, the close of the Exchange on the next day the Exchange is open.

Investments are considered received only when payment is received by us.
Wired funds are considered received on the day they are deposited in our bank
account if they are deposited before the time as of which the net asset value of
the fund is determined.

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

Investment and transaction instructions received by us on any business day
by mail before the time as of which the net asset value is determined will
receive that day's price. Investments and instructions received after that time
will receive the price determined on the next business day.

If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, it is the responsibility of your plan
recordkeeper or financial intermediary to transmit your purchase, exchange and
redemption requests to the funds' transfer agent prior to the applicable cut-off
time for receiving orders, and to make payment for any purchase transactions in
accordance with the funds' procedures or any contractual arrangements with the
funds or the funds' distributor, in order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the funds have authorized such
intermediaries and their designees to accept purchase and redemption orders on
the funds' behalf up to the applicable cut-off time. The funds will be deemed to
have received such orders upon acceptance by a duly authorized intermediary, and
such orders will be priced at the funds' net asset values next determined after
acceptance on the funds' behalf by such intermediary.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

The portfolio securities of each fund, except as otherwise noted, listed or
traded on a domestic securities exchange, are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Trustees.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

Debt securities not traded on a principal securities exchange are valued
through valuations obtained from a commercial pricing service or at the most
recent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the Board of Trustees.

Pursuant to a determination by the Money Market Funds' Board of Trustees and
Rule 2a-7 under the Investment Company Act, portfolio securities of the funds
are valued at amortized cost. When a security is valued at amortized cost, it is
valued at its cost when purchased, and thereafter by assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset values of the Investor Class of the funds are published in
leading newspapers daily. The yields of the Investor Class of the Money Market
Funds are published weekly in leading financial publications and daily in many
local newspapers. The net asset values, as well as yield information on all of
the funds and other funds in the American Century family of funds, also may be
obtained by calling us or by accessing our Web site at www.americancentury.com.

DISTRIBUTIONS

At the close of each day, including Saturdays, Sundays and holidays, net
investment income of the Variable-Price Funds is determined and declared as a
distribution. Distributions will be paid monthly on the last Friday of each
month, except for year-end distributions which will be made on the last business
day of the year. For the Money Market Funds, dividends are declared and credited
(i.e., available for redemption) daily and distributed monthly on the last
Friday of each month.

You will begin to participate in the distributions the day after your
purchase is effective. See "When Share Price Is Determined," page 25.) If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed the distribution on the redeemed shares
will be included with your redemption proceeds.

Distributions from net realized capital gains, if any, generally are
declared and paid once a year, but the funds may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act. Florida Municipal Money Market and New York Municipal
Money Market do not expect to realize any long-term capital gains, and
accordingly do not expect to pay any capital gains distributions.

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 59(1)/(2) years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.

A distribution does not increase the value of your shares or your total
return. At any given time the value of your shares includes the undistributed
net gains, if any, realized by the fund on the sale of portfolio securities, and
undistributed dividends and interest received, less fund expenses.

Because such gains and dividends are included in the value of your shares,
when they are distributed the value of your shares is reduced by the amount of
the distribution. If you buy your shares through a taxable account just before
the distribution, you will pay the full price for your shares, and then receive
a portion of the purchase price back as a taxable distribution.

TAXES

Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that because each fund distributes all of its income, it pays
no income tax.

TAX-DEFERRED ACCOUNTS

If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

retirement or savings plans, income and capital gains distributions paid by the
funds generally will not be subject to current taxation, but will accumulate in
your account under the plan on a tax-deferred basis.

Employer-sponsored retirement and savings plans are governed by complex tax
rules. If you elect to participate in your employer's plan, consult your plan
administrator, your summary plan description or a professional tax advisor
regarding the tax consequences of participation in the plan, contributions to,
and withdrawals or distributions from the plan.

TAXABLE ACCOUNTS

If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. The dividends from net income of the Variable-Price Funds do
not qualify for the 70% dividends-received deduction for corporations because
they are derived from interest income. Dividends representing income derived
from tax-exempt bonds generally retain the bonds' tax-exempt character in a
shareholder's hands. Distributions from gains on assets held longer than 12
months, but no more than 18 months (28% rate gain) and/or assets held longer
than 18 months (20% rate gain) are taxable as long-term gains regardless of the
length of time you have held the shares. However, you should note that any loss
realized upon the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of any distribution of
long-term capital gains to you with respect to such shares (28% or 20% rate
gain).

Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you
purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain).

In January of the year following the distribution, you will receive a Form
1099-DIV notifying you of the status of your distributions for federal income
tax purposes. Please note, however, that tax-exempt dividends are not included
on Form 1099-DIV. The funds anticipate that substantially all of the dividends
to be paid by the funds will be exempt from federal income taxes to an
individual unless, due to that person's own tax situation, he or she is subject
to the AMT. In that case, it is likely that a portion of the dividends will be
taxable to that shareholder while remaining tax-exempt in the hands of most
other shareholders. The funds will advise shareholders of the percentage subject
to the individual AMT should a shareholder be subject to it.

Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.

If you have not complied with certain provisions of the Internal Revenue
Code and regulations, we are required by federal law to withhold and remit to
the IRS 31% of reportable payments (which may include dividends, capital gains
distributions and redemptions). Those regulations require you to certify that
the Social Security number or tax identification number you provide is correct
and that you are not subject to 31% withholding for previous under-reporting to
the IRS. You will be asked to make the appropriate certification on your
application. Payments reported by us that omit your Social Security number or
tax identification number will subject American Century to a penalty of $50,
which will be charged against your account if you fail to provide the
certification by the time the report is filed. This charge is not refundable.

Redemption of shares of a fund (including a redemption made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

Assuming that shareholders hold such shares as a capital asset, the gain or loss
will be a capital gain or loss and generally will be considered long-term
subject to tax at a maximum rate of 28% if shareholders have held such shares
for a period of more than 12 months but no more than 18 months, and long-term
subject to tax at a maximum rate of 20% if shareholders have held such shares
for a period of more than 18 months. If a loss is realized on the redemption of
fund shares, the reinvestment in additional fund shares within 30 days before or
after the redemption may be subject to the "wash sale" rules of the Internal
Revenue Code, resulting in a postponement of the recognition of such loss for
federal income tax purposes.

In addition to the federal income tax consequences described above relating
to an investment in the fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.

SPECIAL TAX INFORMATION

Each fund intends to invest at least 50% of its assets in state and
municipal obligations so that it will qualify to pay "exempt-interest dividends"
to shareholders. Such exempt-interest dividends generally are excludable from a
shareholder's gross income for federal tax purposes. If a fund earned federally
taxable income from any of its investments, the income would be distributed to
shareholders as a taxable dividend as described above.

MUNICIPAL SECURITIES

Opinions relating to the validity of municipal securities and the exemptions
of interest thereon from federal income tax are rendered by bond counsel to the
issuers. The funds and the manager rely on the opinion of bond counsel and do
not undertake any independent investigation of proceedings relating to the
issuance of state or municipal securities. The funds may invest in various
instruments that are not traditional state and local obligations and that are
believed to generate interest excludable from taxable income under Code Section
103, including, but not limited to, municipal lease obligations and inverse
floaters. Although the funds may invest in these instruments, they cannot
guarantee the tax-exempt status of the income earned thereon from any other
investment.

AMT LIABILITY

To the extent that a fund invests in municipal obligations (private activity
bonds) whose interest is treated as a tax preference item in calculating AMT
liability, shareholders who calculate AMT liability will be required to include
a portion of the fund's dividends as a tax preference item in making this
calculation. In addition, corporate shareholders may be required to include all
dividends and distributions by the fund in an adjustment of alternative minimum
taxable income for purposes of the AMT imposed under Internal Revenue Code,
Section 55.

ARIZONA INTERMEDIATE-TERM AND NEW YORK MUNICIPAL

Under the tax regulations of Arizona, shareholders who are otherwise subject
to Arizona income tax will not be taxed on fund dividends if the dividends are
attributable to obligations of the state of Arizona or its political
subdivisions. Similarly, New York state and city tax regulations provide that no
income tax will be assessed on dividends attributable to obligations of the
state of New York or its political subdivisions. All three also extend this
tax-free treatment to dividends attributable to obligations issued by Guam,
Puerto Rico or the Virgin Islands.

In addition, fund dividends that are attributable to interest payments on
direct U.S. government obligations will not be subject to income tax. This is
only true, however, if the funds qualify as a regulated investment company under
Subchapter M of the Code. The funds fully intend to qualify as a regulated
investment company.

Other distributions from the funds, such as distributions of capital gains
or income earned on obligations other than those specified above, generally will
be subject to all forms of taxation in their respective states and localities.

FLORIDA FUNDS

Florida currently does not have a personal income tax, so dividends from the
Florida Funds and distributions earned by Florida residents will not be subject

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

to such a tax. Dividends and distributions earned by corporate shareholders who
are subject to the Florida corporate income tax may be taxable by Florida; these
shareholders should consult their tax advisors regarding the application of the
Florida corporate income tax to dividends and distributions from the Florida
Funds.

The Florida Funds may apply for rulings from the Florida Department of
Revenue to the effect that shares of a Florida Fund be exempt from the Florida
Intangibles Tax each year if the Florida Fund's portfolio of investments on
January 1 of that year consists of qualifying investments.

Investments exempt from the Florida Intangibles Tax include but are not
limited to (1) notes, bonds and other obligations issued by Florida or its
municipalities, counties and other taxing districts and (2) notes, bonds, and
other obligations issued by the U.S. government and its agencies. Obligations
issued by the governments of Puerto Rico, Guam and the Virgin Islands are also
exempt if permitted by ruling.

If a Florida Fund's portfolio of investments on January 1 of each year
includes investments that are not exempt from the Florida Intangibles Tax, the
Florida Fund's shares could be subject to the Florida Intangibles Tax. The
Florida Funds intend that on January 1 of each year, each Florida Fund's
portfolio of investments will consist solely of investments exempt from the
Florida Intangibles Tax. Shareholders who are domiciled outside of Florida may
be subject to income, personal property, intangibles or similar taxes in their
respective states.

MANAGEMENT

INVESTMENT MANAGEMENT

The funds are open-end series of the American Century Municipal Trust (the
"Trust"). Under the laws of the Commonwealth of Massachusetts, the Board of
Trustees is responsible for managing the business and affairs of the Trust.
Acting pursuant to an investment management agreement entered into with the
funds, American Century Investment Management, Inc. serves as the investment
manager of the funds. Its principal place of business is American Century Tower,
4500 Main Street, Kansas City, Missouri 64111. The manager has been providing
investment advisory services to investment companies and institutional clients
since it was founded in 1958.

The manager supervises and manages the investment portfolio of each fund and
directs the purchase and sale of its investment securities. It utilizes teams of
portfolio managers, assistant portfolio managers and analysts acting together to
manage the assets of the funds. The teams meet regularly to review portfolio
holdings and to discuss purchase and sale activity. The teams adjust holdings in
the funds' portfolios as they deem appropriate in pursuit of the funds'
investment objectives. Individual portfolio manager members of the team may also
adjust portfolio holdings of the funds as necessary between team meetings.

The portfolio manager members of the teams managing the funds described in
this Prospectus and their work experience for the last five years are as
follows:

G. DAVID MACEWEN, Vice President and Senior Portfolio Manager, supervises
the team that manages the funds in the American Century Municipal Trust. Mr.
MacEwen joined American Century in 1991 as a Municipal Portfolio Manager. Mr.
MacEwen is a member of the Association of Investment Management and Research
(AIMR) and the Securities Analysts of San Francisco. He holds a bachelor's
degree in economics from Boston University and an MBA in finance from the
University of Delaware.

BRYAN E. KARCHER, Portfolio Manager, has been a member of the team that
manages Florida Municipal Money Market since April 1995. Mr. Karcher joined
American Century in 1989. Before being promoted to his current position, Mr.
Karcher was a research analyst. He holds a bachelor's degree in economics from
the University of California, Los Angeles and is a Chartered Financial Analyst.

TODD PARDULA, Portfolio Manager, has been a member of the team that manages
New York Municipal Money Market since its inception in August 1998. Mr. Pardula
joined American Century in 1990. Before being promoted to his current position,
Mr. Pardula was an associate credit analyst. He holds a bachelor's degree in
finance from Santa Clara University and is a Chartered Financial Analyst.

KENNETH SALINGER, Associate Portfolio Manager, has been a member of the team
that manages Arizona Intermediate-Term Municipal since July 1998 and

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 29

Florida Intermediate-Term Municipal since October 1996. Mr. Salinger joined
American Century in 1992. Before being promoted to his current position, Mr.
Salinger was a municipal portfolio trader. He holds a bachelor's degree in
Quantitative Economics from the University of California, San Diego and is a
candidate for the Chartered Financial Analyst designation.

The activities of the manager are subject only to directions of the funds'
Board of Trustees. The manager pays all the expenses of the funds except
brokerage, taxes, portfolio insurance, interest, fees and expenses of the
non-interested person Trustees (including counsel fees), and extraordinary
expenses.

For the services provided to the funds, the manager receives a monthly fee
based on a percentage of the average net assets of each fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category that are managed by the manager (the "Investment Category
Fee"). There are three investment categories: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the "Complex Fee"). The Investment
Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for each of the funds is an annual rate of the average net assets
of the fund as follows: Florida Municipal Money Market and New York Money
Market, 0.20%; and Arizona Intermediate-Term Municipal and Florida
Intermediate-Term Municipal, 0.21%. The Complex Fee is currently an annual rate
of 0.30% of the average net assets of a fund. Further information about the
calculation of the annual management fee is contained in the Statement of
Additional Information.

On the first business day of each month, the funds pay a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for a fund by the
aggregate average daily closing value of a fund's net assets during the previous
month by a fraction, the numerator of which is the number of days in the
previous month and the denominator of which is 365 (366 in leap years).

CODE OF ETHICS

The funds and the manager have adopted a Code of Ethics that restricts
personal investing practices by employees of the manager and its affiliates.
Among other provisions, the Code of Ethics requires that employees with access
to information about the purchase or sale of securities in the funds' portfolios
obtain clearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of the fund
shareholders come before the interests of the people who manage those funds.

TRANSFER AND ADMINISTRATIVE SERVICES

American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111 acts as transfer agent and dividend-paying agent for the funds.
It provides facilities, equipment and personnel to the funds and is paid for
such services by the manager.

Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the funds as a funding medium, by broker-dealers and financial
advisors for their customers investing in shares of American Century, or by
sponsors of multi mutual fund no- or low-transaction fee programs. The manager
or an affiliate may enter into contracts to pay them for such recordkeeping and
administrative services out of its unified management fee.

Although there is no sales charge levied by the funds, transactions in
shares of the funds may be executed by brokers or investment advisors who charge
a transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the funds or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.

30 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

From time to time, special services may be offered to shareholders who
maintain higher share balances in our family of funds. These services may
include the waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by the manager
or its affiliates.

The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (ACC), which is controlled by James E. Stowers Jr.

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the Co-Administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The manager
pays the fees and expenses of FDI.

YEAR 2000 ISSUES

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the funds, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the funds' other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
funds' business, particularly its ability to provide shareholder services, may
be hampered.

In addition, the issuers of securities the funds own could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the funds' performance. The manager has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the manager may consider when making investment decisions, and other factors may
receive greater weight.

DISTRIBUTION OF FUND SHARES

The funds' shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the funds are processed by the
transfer agent, which is authorized to accept any instructions relating to fund
accounts. All purchase orders must be accepted by the distributor. All fees and
expenses of FDI in acting as distributor for the funds are paid by the manager.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Municipal Trust was organized as a Massachusetts business
trust on May 1, 1984. The Trust is an open-end management investment company.
Its business and affairs are managed by its officers under the direction of its
Board of Trustees.

The principal office of the Trust is American Century Tower, 4500 Main
Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-2021 (international
calls: 816-531-5575).

The funds are individual series of the Trust which issues shares with no par
value. The assets belonging to each series of shares are held separately by the
custodian and in effect each series is a separate fund.

Each share, irrespective of series, is entitled to one vote for each dollar
of net asset value applicable to such share on all questions, except those
matters that must be voted on separately by the series of shares

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 31

affected. Matters affecting only one fund are voted upon only by that fund.

Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of Trustees can elect all of the
Trustees if they choose to do so, and, in such event the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Trustees.

Unless required by the Investment Company Act, it will not be necessary for
the Trust to hold annual meetings of shareholders. As a result, shareholders may
not vote each year on the election of Trustees or the appointment of auditors.
However, pursuant to the Trust's by-laws, the holders of shares representing at
least 10% of the votes entitled to be cast may request that the Trust hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.

WE RESERVE THE RIGHT TO CHANGE ANY OF OUR POLICIES, PRACTICES AND PROCEDURES
DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION,
WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER
APPROVAL IS EXPRESSLY REQUIRED.

THIS PROSPECTUS CONSTITUTES AN OFFER TO SELL SECURITIES OF A FUND ONLY IN
THOSE STATES WHERE THE FUND'S SHARES HAVE BEEN REGISTERED OR OTHERWISE QUALIFIED
FOR SALE. A FUND WILL NOT ACCEPT APPLICATIONS FROM PERSONS RESIDING IN STATES
WHERE THE FUND'S SHARES ARE NOT REGISTERED.

32 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

NOTES

NOTES 33

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485

FAX: 816-340-7962

www.americancentury.com

[american century logo(reg.sm)]
American
Century(reg.sm)

9808 [recycled logo]
SH-BKT-12834 Recycled
<PAGE>

PROSPECTUS

[american century logo(reg.sm)]
American
Century(reg.sm)

AUGUST 31, 1998

BENHAM
GROUP(reg.tm)

Arizona Intermediate-Term Municipal
Florida Municipal Money Market
Florida Intermediate-Term Municipal

INVESTOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

AMERICAN CENTURY INVESTMENTS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Arizona Intermediate-Term
Municipal

Florida Municipal
Money Market

Florida Intermediate-Term
Municipal

PROSPECTUS
AUGUST 31, 1998

Arizona Intermediate-Term Municipal
Florida Municipal Money Market
Florida Intermediate-Term Municipal

INVESTOR CLASS

AMERICAN CENTURY MUNICIPAL TRUST

American Century Municipal Trust is a part of American Century Investments,
a family of funds that includes nearly 70 no-load mutual funds covering a
variety of investment opportunities. Three of the funds from our Benham Group
that invest in various types of municipal securities are described in this
Prospectus. Their investment objectives are listed on page 2 of this Prospectus.
The other funds are described in separate prospectuses.

Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419200
Kansas City, Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri: 816-444-3485
Internet: www.americancentury.com

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY -- BENHAM ARIZONA
INTERMEDIATE-TERM MUNICIPAL FUND

AMERICAN CENTURY -- BENHAM FLORIDA
MUNICIPAL MONEY MARKET FUND

AMERICAN CENTURY -- BENHAM FLORIDA
INTERMEDIATE-TERM MUNICIPAL FUND

AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.

For ease of reference, the funds sometimes will be referred to in this
Prospectus by their investment category or fund type. Florida Municipal Money
Market and Florida Intermediate-Term Municipal are referred to as the "Florida
Funds." Arizona Intermediate-Term Municipal and Florida Intermediate-Term
Municipal are referred to as the "Variable-Price Funds."

ARIZONA INTERMEDIATE-TERM MUNICIPAL AND THE FLORIDA FUNDS CONCENTRATE THEIR
INVESTMENTS GEOGRAPHICALLY BY INVESTING IN SECURITIES ISSUED BY AGENCIES,
INSTRUMENTALITIES AND MUNICIPALITIES OF THE STATES OF ARIZONA AND FLORIDA
RESPECTIVELY. BECAUSE OF THIS CONCENTRATION, THEY MAY BE RISKIER THAN SIMILAR
MUTUAL FUNDS WITH NO GEOGRAPHIC CONCENTRATION.

There is no assurance that the funds will achieve
their respective investment objectives.

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objectives of the Funds .......................................... 2
Transaction and Operating Expense Table ..................................... 4
Financial Highlights ........................................................ 5

INFORMATION REGARDING THE FUNDS

Investment Policies of the Funds ............................................ 8
Arizona Intermediate-Term Municipal ..................................... 8
Florida Municipal Money Market,
Florida Intermediate-Term Municipal ..................................... 9
Portfolio Investment Quality and Maturity
Guidelines .............................................................. 10
Money Market Fund ....................................................... 10
Variable-Price Funds .................................................... 10
Risk Factors and Investment Techniques ...................................... 11
Basic Fixed Income Investment Risks ..................................... 11
Interest Rate Risk .............................................. 11
Credit Risk ..................................................... 11
Concentration Risk .............................................. 11
Call Risk ....................................................... 12
Municipal Securities .................................................... 12
Tax-Exempt Securities ....................................................... 13
Other Investment Practices, Their Characteristics
and Risks ............................................................... 13
Portfolio Turnover ...................................................... 13
When-Issued and Forward Commitment
Agreements ........................................................ 13
Interest Rate Futures Contracts and Options Thereon ..................... 14
Restricted Securities ................................................... 14
Cash Management ......................................................... 15
Other Techniques ........................................................ 15
Performance Advertising ..................................................... 15

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

American Century Investments ................................................ 17
Investing in American Century ............................................... 17
How to Open an Account ...................................................... 17
By Mail ......................................................... 17
By Wire ......................................................... 17
By Exchange ..................................................... 18
In Person ....................................................... 18
Subsequent Investments .................................................. 18
By Mail ......................................................... 18
By Telephone .................................................... 18
By Online Access ................................................ 18
By Wire ......................................................... 18
In Person ....................................................... 18
Automatic Investment Plan ............................................... 18
How to Exchange From One Account to Another ................................. 18
By Mail ......................................................... 19
By Telephone .................................................... 19
By Online Access ................................................ 19
How to Redeem Shares ........................................................ 19
By Mail ......................................................... 19
By Telephone .................................................... 19
By Check-A-Month ................................................ 19
Other Automatic Redemptions ..................................... 19
Redemption Proceeds ..................................................... 19
By Check ........................................................ 19
By Wire and ACH ................................................. 19
Redemption of Shares in Low-Balance Accounts ............................ 20
Signature Guarantee ......................................................... 20
Special Shareholder Services ................................................ 20
Automated Information Line ...................................... 20
Online Account Access ........................................... 20
CheckWriting .................................................... 20
Open Order Service .............................................. 21
Tax-Qualified Retirement Plans .................................. 21
Important Policies Regarding Your Investments ............................... 21
Reports to Shareholders ..................................................... 22
Employer-Sponsored Retirement Plans and
Institutional Accounts .................................................. 22

ADDITIONAL INFORMATION YOU SHOULD KNOW

Share Price ................................................................. 24
When Share Price Is Determined .......................................... 24
How Share Price Is Determined ........................................... 24
Where to Find Information About Share Price ............................. 25
Distributions ............................................................... 25
Taxes ....................................................................... 25
Tax-Deferred Accounts ................................................... 25
Taxable Accounts ........................................................ 26
Special Tax Information ..................................................... 27
Municipal Securities .................................................... 27
AMT Liability ........................................................... 27
Arizona Intermediate-Term Municipal ..................................... 27
Florida Funds ........................................................... 27
Management .................................................................. 28
Investment Management ................................................... 28
Code of Ethics .......................................................... 29
Transfer and Administrative Services .................................... 29
Year 2000 Issues ........................................................ 30
Distribution of Fund Shares ................................................. 30
Further Information About American Century .................................. 30

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE

Arizona Intermediate-
Term Municipal,
Florida Municipal Florida Intermediate-
Money Market Term Municipal

SHAREHOLDER TRANSACTION EXPENSES:

<S> <C> <C>
Maximum Sales Load Imposed on Purchases .................... none none
Maximum Sales Load Imposed on Reinvested Dividends ......... none none
Deferred Sales Load ........................................ none none
Redemption Fee(1) .......................................... none none
Exchange Fee ............................................... none none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):

Management Fees(2) ......................................... 0.50% 0.51%
12b-1 Fees ................................................. none none
Other Expenses(3) .......................................... 0.01% 0.01%
Total Fund Operating Expenses .............................. 0.51% 0.52%

EXAMPLE:

You would pay the following expenses on a 1 year $ 5 $ 5
$1,000 investment, assuming a 5% annual return 3 years 16 17
and redemption at the end of each time period: 5 years 29 29
10 years 64 65
</TABLE>

(1) Redemption proceeds sent by wire are subject to a $10 processing fee.

(2) A portion of the management fee may be paid by American Century Investment
Management, Inc. to unaffiliated third parties who provide recordkeeping and
administrative services that would otherwise be performed by an affiliate of
the manager. See "Management -- Transfer and Administrative Services," page
29.

(3) Other expenses include the fees and expenses (including legal counsel fees)
of those Trustees who are not "interested persons" as defined in the
Investment Company Act of 1940.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ARIZONA INTERMEDIATE-TERM MUNICIPAL

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before May 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the years ended May 31, except
as noted.

1998 1997 1996 1995 1994(1)

PER-SHARE DATA

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ............... $ 10.44 $ 10.31 $ 10.35 $ 10.13 $ 10.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations

Net Investment Income ........................... 0.46 0.45 0.51 0.51 0.07

Net Realized and Unrealized Gain (Loss)
on Investment Transactions ...................... 0.28 0.13 (0.03) 0.22 0.13
---------- ---------- ---------- ---------- ----------
Total From Investment Operations ................ 0.74 0.58 0.48 0.73 0.20
---------- ---------- ---------- ---------- ----------
Distributions

From Net Investment Income ...................... (0.46) (0.45) (0.51) (0.51) (0.07)

From Net Realized Gains on
Investment Transactions ......................... (0.05) -- (0.01) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions ............................. (0.51) (0.45) (0.52) (0.51) (0.07)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ..................... $ 10.67 $ 10.44 $ 10.31 $ 10.35 $ 10.13
========== ========== ========== ========== ==========
Total Return(2) ................................. 7.19% 5.77% 4.65% 7.52% 1.99%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets .. 0.54% 0.66% 0.14% -- --

Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver) ......................... 0.60% 0.79% 0.82% 1.01% 2.33%(3)

Ratio of Net Investment Income to Average Net
Assets ......................................... 4.33% 4.35% 4.85% 5.16% 5.08%(3)

Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver) ......................... 4.27% 4.22% 4.17% 4.15% 2.75%(3)

Portfolio Turnover Rate ............................ 39% 81% 36% 33% 18%

Net Assets, End of Period (in thousands) ........... $ 40,047 $ 30,555 $ 25,789 $ 19,778 $ 7,187
</TABLE>

(1) April 11, 1994 (inception) through May 31, 1994.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
FLORIDA MUNICIPAL MONEY MARKET

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before May 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the years ended May 31, except
as noted.

1998 1997 1996 1995 1994(1)

PER-SHARE DATA

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Income From Investment Operations

Net Investment Income .............................. 0.03 0.03 0.04 0.04 --
----------- ----------- ----------- ----------- -----------
Distributions

From Net Investment Income ......................... (0.03) (0.03) (0.04) (0.04) --
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Return(2) .................................... 3.31% 3.55% 3.86% 3.71% 0.40%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.51% 0.12% 0.01% -- --

Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver) ............................ 0.53% 0.66% 0.71% 0.88% 1.58%(3)

Ratio of Net Investment Income to Average Net Assets .. 3.25% 3.48% 3.75% 3.93% 2.99%(3)

Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver) ............................ 3.23% 2.94% 3.05% 3.05% 1.41%(3)

Net Assets, End of Period (in thousands) .............. $ 109,684 $ 112,129 $ 99,993 $ 45,147 $ 5,565
</TABLE>

(1) April 11, 1994 (inception) through May 31, 1994.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
FLORIDA INTERMEDIATE-TERM MUNICIPAL

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before May 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the years ended May 31, except
as noted.

1998 1997 1996 1995 1994(1)

PER-SHARE DATA

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 10.34 $ 10.18 $ 10.30 $ 10.11 $ 10.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations

Net Investment Income .............................. 0.45 0.46 0.52 0.52 0.07

Net Realized and Unrealized Gain (Loss)
on Investment Transactions ......................... 0.38 0.20 (0.08) 0.19 0.11
---------- ---------- ---------- ---------- ----------
Total From Investment Operations ................... 0.83 0.66 0.44 0.71 0.18
---------- ---------- ---------- ---------- ----------
Distributions

From Net Investment Income ......................... (0.45) (0.46) (0.52) (0.52) (0.07)

From Net Realized Capital Gains .................... (0.16) (0.04) (0.04) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions ................................ (0.61) (0.50) (0.56) (0.52) (0.07)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ........................ $ 10.56 $ 10.34 $ 10.18 $ 10.30 $ 10.11
========== ========== ========== ========== ==========
Total Return(2) .................................... 8.20% 6.63% 4.34% 7.31% 1.79%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.54% 0.65% 0.13% -- --

Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver) ............................ 0.58% 0.86% 0.88% 1.09% 1.92%(3)

Ratio of Net Investment Income to Average Net Assets .. 4.28% 4.42% 5.05% 5.23% 5.02%(3)

Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver) ............................ 4.24% 4.21% 4.30% 4.14% 3.10%(3)

Portfolio Turnover Rate ............................... 154% 82% 66% 37% 6%

Net Assets, End of Period (in thousands) .............. $ 29,605 $ 16,513 $ 10,319 $ 9,532 $ 5,892
</TABLE>

(1) April 11, 1994 (inception) through May 31, 1994.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 7

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

For an explanation of the securities ratings referred to in the following
discussion, see "Other Information" in the Statement of Additional Information.

ARIZONA INTERMEDIATE-TERM MUNICIPAL

8 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

Arizona has been, and is projected to continue to be, one of the
faster-growing areas in the United States. During the last several decades, the
state has outpaced most other regions of the country in population and personal
income growth, gross state product, and job creation, although growth has slowed
somewhat in recent years. The Arizona economy continues to diversify away from
its historical reliance on the mining and agricultural employment sectors.
Significant job growth has occurred in the areas of aerospace, information
technology, construction, finance, insurance and real estate.

For further information about the risks associated with investing in Arizona
obligations, please see the Statement of Additional Information.

FLORIDA MUNICIPAL MONEY MARKET FLORIDA INTERMEDIATE-TERM MUNICIPAL

As discussed more fully on page 27 under "Special Tax Information," a
Florida Fund may need to sell certain investments near the end of each calendar
year so that on January 1 of each year, its portfolio consists only of
investments that are exempt from the Florida Intangibles Tax. As a result, a
fund could incur additional costs or taxable income or gains.

PROSPECTUS INFORMATION REGARDING THE FUNDS 9

developments in Florida that may affect the Florida Funds.

For further information about the risks associated with investing in Florida
obligations, please see the Statement of Additional Information.

PORTFOLIO INVESTMENT QUALITY AND
MATURITY GUIDELINES

The Money Market Fund may be appropriate for investors seeking share price
stability who can accept the lower yields that short-term obligations typically
provide. To offer investors the potential for higher yields, the Variable-Price
Funds invest in obligations with longer maturities.

MONEY MARKET FUND

In selecting investments for the Money Market Fund, the manager adheres to
regulatory guidelines concerning the quality and maturity of money market fund
investments as well as to internal guidelines designed to minimize credit risk.

In particular, the fund:

(1) Buys only U.S. dollar-denominated obligations with remaining maturities
of 13 months or less (and variable- and floating-rate obligations with
demand features that effectively shorten their maturities to 13 months
or less);

(2) Maintains a dollar-weighted average maturity of 90 days or less; and

(3) Restricts its investments to high-quality obligations determined by the
manager, pursuant to procedures established by the Board of Trustees,
to present minimal credit risks.

To be considered high quality, an obligation must be:

(1) A U.S. government obligation; or

(2) Rated (or issued by an issuer rated with respect to a class of
comparable short-term obligations) in one of the two highest rating
categories for short-term obligations by at least two nationally
recognized statistical rating agencies ("rating agencies") (or one if
only one has rated the obligation); or

(3) An obligation judged by the manager, pursuant to guidelines established
by the Board of Trustees, to be of quality comparable to the securities
listed above.

VARIABLE-PRICE FUNDS

The Variable-Price Funds' maturity criteria are as follows:

In terms of credit quality, each Variable-Price Fund restricts its
investments to:

10 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

(1) Municipal bonds rated, when acquired, within the four highest
categories designated by a rating agency;

(2) Municipal notes (including variable-rate demand obligations) and
tax-exempt commercial paper rated, when acquired, within the two
highest categories designated by a rating agency; and

(3) An obligation judged by the manager, under the direction of the Board
of Trustees, to be of comparable quality.

RISK FACTORS AND INVESTMENT TECHNIQUES

Each fund described in this Prospectus offers a range of potential for
income and total return based on its maturity criteria. The market value of the
investments of each fund will change over time in response to a number of
factors, which are summarized in the following paragraphs.

BASIC FIXED INCOME INVESTMENT RISKS

The Money Market Fund may be appropriate for investors who would like to (1)
earn income at tax-exempt money market rates while preserving their investment
or (2) use a money market fund as part of a long-term, balanced investment
portfolio consisting of money market instruments, bonds and stocks.

The Variable-Price Funds offer a range of potential for income and total
return based on their respective quality and maturity criteria.

INTEREST RATE RISK

One feature the funds have in common is their susceptibility to changing
interest rates. For the Money Market Fund, interest rate changes affect the
level of income the fund generates for shareholders. For the Variable-Price
Funds, changing interest rates affect not only the level of income the funds
generate for shareholders, but their share prices as well. In general, when
interest rates rise, the Variable-Price Funds' share prices decline; when
interest rates decline, their share prices rise.

CREDIT RISK

In selecting investments for each fund, the manager carefully considers the
creditworthiness of parties and their reliability for the timely payment of
interest and repayment of principal.

In many cases, these parties include not only the issuer of the obligation,
but a bank or other financial intermediary who offers a letter of credit or
other form of guarantee on the obligation.

The Variable-Price funds described in this Prospectus may invest up to 15%
of their total assets in unrated securities. The Money Market Fund may invest up
to 10% of its total assets in unrated securities. Unrated securities may be less
liquid than rated securities.

CONCENTRATION RISK

PROSPECTUS INFORMATION REGARDING THE FUNDS 11

industry or similar types of projects may have a significant effect on fund
performance.

CALL RISK

MUNICIPAL SECURITIES

Municipal securities are issued to raise money for a variety of public
purposes, including general financing for state and local governments as well as
financing for specific projects and public facilities. Municipal securities may
be backed by the full taxing power of a municipality, the revenues from a
specific project or the credit of a private organization. The following
discussion provides a brief description of some securities the funds may buy.
The funds are not limited by this discussion, and they may buy other types of
securities and enter into other types of transactions that meet their respective
quality, maturity and liquidity requirements.

MUNICIPAL NOTES typically have maturities of 13 months or less and are used
to provide short-term capital or to meet cash-flow demands.

GENERAL OBLIGATION BONDS are backed by the taxing power of the issuer.

AMT SECURITIES typically are tax-exempt "private activity" bonds issued
after August 7, 1986, whose

12 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

proceeds are directed at least in part to a private, for-profit organization.
Although the interest income from AMT Securities is exempt from regular federal
income tax, that income is a tax preference item for purposes of the AMT.

TAX-EXEMPT SECURITIES

Fund's Tax-Free Yield Florida Your Tax-
------------------------------- + Intangibles Tax = Equivalent
100% - Federal Rate Yield
Tax Rate

Fund's Double Tax-Free Yield Your Tax-
-------------------------------------- = Equivalent
(100% - Federal (100% - Arizona Yield
Tax Rate) Tax Rate)

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

For additional information regarding the investment practices of any of the
funds, see the Statement of Additional Information.

PORTFOLIO TURNOVER

The portfolio turnover rates of the Variable-Price Funds are shown in the
financial information of this Prospectus.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

typically occurs 15 to 45 days after the commitment to purchase. Market rates of
interest on debt securities at the time of delivery may be higher or lower than
those contracted for on the when-issued security. Accordingly, the value of such
security may decline prior to delivery, which could result in a loss to the
fund. The manager will segregate cash or appropriate assets in an amount at
least equal to the when-issued commitments. No income will accrue to the fund
prior to delivery.

INTEREST RATE FUTURES CONTRACTS AND OPTIONS THEREON

For options sold, a fund will segregate cash or appropriate liquid assets
equal to the value of securities underlying the option unless the option is
otherwise covered.

See the Statement of Additional Information for further information about
these instruments and their risks.

RESTRICTED SECURITIES

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

gate this function to the manager. Accordingly, the Board of Trustees has
established guidelines and procedures for determining the liquidity of these
restricted securities and has delegated the day-to-day function of determining
the liquidity of these restricted securities to the manager. The Board retains
the responsibility to monitor the implementation of the guidelines and
procedures it has adopted.

No fund may invest more than 15% (10% for the Money Market Fund) of its net
assets in illiquid securities (securities that may not be sold within seven days
at approximately the price used in determining the net asset value of fund
shares).

CASH MANAGEMENT

Up to 10% of a fund's total assets may be invested in this manner.

OTHER TECHNIQUES

PERFORMANCE ADVERTISING

A quotation of yield reflects a fund's income over a stated period expressed
as a percentage of the fund's share price. In the case of the Money Market Fund,
yield is calculated by measuring the income generated by an investment in the
fund over a seven-day period (net of expenses). This income is then annualized,
that is, the amount of income generated by the investment over the seven-day
period is assumed to be generated over each similar period each week throughout
a full year and is shown as a percentage of the investment.

The funds also may include in advertisements data comparing performance with
their performance of

PROSPECTUS INFORMATION REGARDING THE FUNDS 15

non-related investment media, published editorial comments and performance
rankings compiled by independent organizations (such as Lipper Analytical
Services or IBC's Money Fund Report) and publications that monitor the
performance of mutual funds. Performance information may be quoted numerically
or may be presented in a table, graph or other illustration. In addition, fund
performance may be compared to well-known indices of market performance. Fund
performance also may be compared, on a relative basis, to other funds in our
fund family. This relative comparison, which may be based upon historical or
expected fund performance, volatility or other fund characteristics, may be
presented numerically, graphically or in text. Fund performance also may be
combined or blended with other funds in our fund family, and that combined or
blended performance may be compared to the same indices to which individual
funds may be compared.

16 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

INVESTING IN AMERICAN CENTURY

HOW TO OPEN AN ACCOUNT

The minimum investment is $2,500 for the Money Market Fund and $5,000 for
the Variable-Price Funds.

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

* RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

* BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111

* BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

* REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see "Bank to Bank Information" on the following page.

* ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 17

* BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):

* Taxpayer identification or Social Security
number

* If more than one account, account numbers and amount to be invested in
each account.

* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See this
page for more information on exchanges.

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street,
Kansas City, Missouri 64111

4917 Town Center Drive,
Leawood, Kansas 66211

1665 Charleston Road,
Mountain View, California 94043

2000 S. Colorado Blvd.,
Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Investor Services Representative
or use our Automated Information Line.

BY ONLINE ACCESS

Upon completion of your application and once your account is open, you may
make investments online.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 17 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

other funds. See "When Share Price Is Determined," page 24.

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

You can make exchanges over the telephone (either with an Investor Services
Representative or using our Automated Information Line--see page 20) upon
completion and receipt of your application or by calling us at 1-800-345-2021 to
get the appropriate form.

BY ONLINE ACCESS

You can make exchanges online. This service is established upon completion
and receipt of your application or by calling us at 1-800-345-2021 to get the
appropriate form.

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W-4P and a reason for withdrawal as
specified by the IRS.

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
redeem your shares by calling an Investor Services Representative.

BY CHECK-A-MONTH

OTHER AUTOMATIC REDEMPTIONS

REDEMPTION PROCEEDS

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

Your bank usually will receive wired funds within 48 hours of transmission.
Funds transferred by ACH

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 19

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

Whenever the shares held in an account have a value of less than the
required minimum, a letter will be sent advising you to bring the value of the
shares held in the account up to the minimum or to establish an automatic
investment that is the equivalent of at least $50 per month. See "How to Open an
Account," page 17. If action is not taken within 90 days of the letter's date,
the shares held in the account will be redeemed and proceeds from the redemption
will be sent by check to your address of record. We reserve the right to
increase the investment minimums.

SIGNATURE GUARANTEE

To protect your accounts from fraud, some transactions will require a
signature guarantee. A signature guarantee is required when redeeming more than
$100,000.

You can obtain a signature guarantee from a bank or trust company, credit
union, broker-dealer, securities exchange or association, clearing agency or
savings association, as defined by federal law.

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

SPECIAL SHAREHOLDER SERVICES

Our special shareholder services include:

AUTOMATED INFORMATION LINE

ONLINE ACCOUNT ACCESS

CHECKWRITING

We offer CheckWriting as a service option for your account in the Money
Market Fund. CheckWriting allows you to redeem shares in your account by writing
a draft ("check") against your account balance. (Shares held in certificate form
may not be redeemed by check.) There is no limit on the number of checks you can
write, but each one must be for at least $100.

CheckWriting redemptions may be made only on checks provided by us.
Currently, there is no charge for checks or for the CheckWriting service.

20 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

OPEN ORDER SERVICE

TAX-QUALIFIED RETIREMENT PLANS

Some funds are available for your tax-deferred retirement plan. Call or
write us and request the appropriate forms for:

* Individual Retirement Accounts (IRAs);

* 403(b) plans for employees of public school systems and non-profit
organizations; or

* Profit-sharing plans and pension plans for corporations and other
employers.

If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.

You also can transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

(1) We reserve the right for any reason to suspend the offering of shares
for a period of time, or to reject any specific purchase order
(including purchases by exchange). Additionally, purchases may be
refused if, in the opinion of the manager, they are of a size that
would disrupt the management of the fund.

(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and
redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all
shareholders or only certain series or classes of shareholders.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(4) Transactions requesting a specific price and date, other than open
orders, will be refused. Once you have mailed or otherwise transmitted
your transaction instructions to us, they may not be modified or
canceled.

(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require
evidence satisfactory to us of the authority of the individual making
the request.

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include request-

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 21

ing personal identification from callers, recording telephone calls,
and providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for
losses due to unauthorized or fraudulent instructions. The company, its
transfer agent and manager will not be responsible for any loss due to
instructions they reasonably believe are genuine.

(7) All signatures should be exactly as the name appears in the
registration. If the owner's name appears in the registration as Mary
Elizabeth Jones, she should sign that way and not as Mary E. Jones.

(8) Unusual stock market conditions have in the past resulted in an
increase in the number of shareholder telephone calls. If you
experience difficulty in reaching us during such periods, you may send
your transaction instructions by mail, express mail or courier service,
or you may visit one of our Investor Centers. You also may use our
Automated Information Line if you have requested and received an access
code and are not attempting to redeem shares.

(10) We will perform special inquiries on shareholder accounts. A research
fee of $15 per hour may be applied.

REPORTS TO SHAREHOLDERS

Carefully review all the information relating to transactions on your
statements and confirmations to ensure that your instructions were acted on
properly. Please notify us immediately in writing if there is an error. If you
fail to provide notification of an error with reasonable promptness (i.e.,
within 30 days of non-automatic transactions or within 30 days of the date of
your consolidated quarterly statement, in the case of automatic transactions) we
will deem you to have ratified the transaction.

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS AND
INSTITUTIONAL ACCOUNTS

If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance company or other financial intermediary, your ability
to

22 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENT

purchase, exchange and redeem shares will depend on your agreement with, and the
policies of, such financial intermediary.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 23

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

24 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

Pursuant to a determination by the Money Market Fund's Board of Trustees and
Rule 2a-7 under the Investment Company Act, portfolio securities of the fund are
valued at amortized cost. When a security is valued at amortized cost, it is
valued at its cost when purchased, and thereafter by assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset values of the Investor Class of the funds are published in
leading newspapers daily. The yield of the Investor Class of the Money Market
Fund is published weekly in leading financial publications and daily in many
local newspapers. The net asset values, as well as yield information on all of
the funds and other funds in the American Century family of funds, also may be
obtained by calling us or by accessing our Web site at www.americancentury.com.

DISTRIBUTIONS

At the close of each day, including Saturdays, Sundays and holidays, net
investment income of the Variable-Price Funds is determined and declared as a
distribution. Distributions will be paid monthly on the last Friday of each
month, except for year-end distributions which will be made on the last business
day of the year. For the Money Market Fund, dividends are declared and credited
(i.e., available for redemption) daily and distributed monthly on the last
Friday of each month.

You will begin to participate in the distributions the day after your
purchase is effective. See "When Share Price Is Determined," page 24.) If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed (other than by CheckWriting), the
distribution on the redeemed shares will be included with your redemption
proceeds.

Distributions from net realized capital gains, if any, generally are
declared and paid once a year, but the funds may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act. Florida Municipal Money Market does not expect to
realize any long-term capital gains, and accordingly does not expect to pay any
capital gains distributions.

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 59 (1)/(2) years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.

TAXES

Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that because each fund distributes all of its income, it pays
no income tax.

TAX-DEFERRED ACCOUNTS

If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

TAXABLE ACCOUNTS

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

basis of the shares and the amount received. Assuming that shareholders hold
such shares as a capital asset, the gain or loss will be a capital gain or loss
and generally will be considered long-term subject to tax at a maximum rate of
28% if shareholders have held such shares for a period of more than 12 months
but no more than 18 months, and long-term subject to tax at a maximum rate of
20% if shareholders have held such shares for a period of more than 18 months.
If a loss is realized on the redemption of fund shares, the reinvestment in
additional fund shares within 30 days before or after the redemption may be
subject to the "wash sale" rules of the Internal Revenue Code, resulting in a
postponement of the recognition of such loss for federal income tax purposes.

In addition to the federal income tax consequences described above relating
to an investment in a fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.

SPECIAL TAX INFORMATION

MUNICIPAL SECURITIES

AMT LIABILITY

ARIZONA INTERMEDIATE-TERM MUNICIPAL

Under a ruling by the Arizona Department of Revenue, shareholders who are
otherwise subject to Arizona income tax will not be subject to such tax on fund
dividends to the extent that such dividends are attributable either to (1)
obligations of the state of Arizona or its political subdivisions or (2)
obligations issued by the governments of Guam, Puerto Rico or the Virgin
Islands.

In addition, Arizona Intermediate-Term Municipal dividends that are
attributable to interest payments on direct obligations of the U.S. government
will not be subject to Arizona income tax if, as intended, Arizona
Intermediate-Term Municipal qualifies as a regulated investment company under
Subchapter M of the Code. Other distributions from the fund, however, such as
distributions of short-term or long-term capital gains or income earned on
obligations of other states, generally will be subject to income, personal
property, intangibles or similar taxes in their respective states and
localities.

FLORIDA FUNDS

Florida currently does not have a personal income tax, so dividends from the
Florida Funds and distributions earned by Florida residents will not be subject
to such a tax. Dividends and distributions earned by corporate shareholders who
are subject to the Florida corporate income tax may be taxable by Florida; these

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

shareholders should consult their tax advisors regarding the application of the
Florida corporate income tax to dividends and distributions from the Florida
Funds.

MANAGEMENT

INVESTMENT MANAGEMENT

The manager supervises and manages the investment portfolio of each fund and
directs the purchase and sale of its investment securities. It utilizes teams of
portfolio managers, assistant portfolio managers and analysts acting together to
manage the assets of the funds. The teams meet regularly to review portfolio
holdings and to discuss purchase and sale activity. The teams adjust holdings in
the funds' portfolios as they deem appropriate in pursuit of the funds'
investment objectives. Individual portfolio manager members of the team also may
adjust portfolio holdings of the funds as necessary between team meetings.

The portfolio manager members of the teams managing the funds described in
this Prospectus and their work experience for the last five years are as
follows:

KENNETH SALINGER, Associate Portfolio Manager, has been a member of the team
that manages Arizona Intermediate-Term Municipal since July 1998 and Florida
Intermediate-Term Municipal since October 1996. Mr. Salinger joined American
Century in 1992. Before being promoted to his current position, Mr. Salinger was
a municipal portfolio trader. He holds a bachelor's degree in Quantitative
Economics from the University of California, San Diego and is a candidate for
the Chartered Financial Analyst designation.

The activities of the manager are subject only to directions of the funds'
Board of Trustees. The manager pays all the expenses of the funds except broker-

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

age, taxes, portfolio insurance, interest, fees and expenses of the
non-interested person Trustees (including counsel fees), and extraordinary
expenses.

For the services provided to the funds, the manager receives a monthly fee
based on a percentage of the average net assets of each fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category that are managed by the manager (the "Investment Category
Fee"). There are three investment categories: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the "Complex Fee"). The Investment
Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for each of the funds is an annual rate of the average net assets
of the fund as follows: Florida Municipal Money Market, 0.20%; and Arizona
Intermediate-Term Municipal and Florida Intermediate-Term Municipal, 0.21%. The
Complex Fee is currently an annual rate of 0.30% of the average net assets of a
fund. Further information about the calculation of the annual management fee is
contained in the Statement of Additional Information.

CODE OF ETHICS

TRANSFER AND ADMINISTRATIVE SERVICES

The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (ACC), which is controlled by James E. Stowers Jr.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 29

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the manager out of its unified fee.

YEAR 2000 ISSUES

DISTRIBUTION OF FUND SHARES

The funds' shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly owned, indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of Trustees can elect all of the

30 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

Trustees if they choose to do so and, in such event, the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Trustees.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 31

NOTES

32 NOTES

NOTES

NOTES 33

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485

FAX: 816-340-7962

www.americancentury.com

[american century logo(reg.sm)]
American
Century(reg.sm)

9808 [recycled logo]
SH-BKT-13464 Recycled
<PAGE>

PROSPECTUS

AUGUST 31, 1998

[american century logo(reg.sm)]
American
Century(reg.sm)

BENHAM
GROUP(reg.tm)

Tax-Free Money Market
Limited-Term Tax-Free
Intermediate-Term Tax-Free
Long-Term Tax-Free
High-Yield Municipal

INVESTOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

Limited-Term Tax-Free

Intermediate-Term
Tax-Free

Long-Term Tax-Free

High-Yield Municipal

PROSPECTUS
AUGUST 31,1998

Tax-Free Money Market * Limited-Term
Tax-Free * Intermediate-Term Tax-Free *
Long-Term Tax-Free * High-Yield Municipal
INVESTOR CLASS

AMERICAN CENTURY MUNICIPAL TRUST

American Century Municipal Trust is a part of American Century Investments,
a family of funds that includes nearly 70 no-load mutual funds covering a
variety of investment opportunities. Five of the funds from our Benham Group
that invest in various types of municipal securities are described in this
Prospectus. Their investment objectives are listed on page 2 of this Prospectus.
The other funds are described in separate prospectuses.

Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY -- BENHAM TAX-FREE
MONEY MARKET FUND

Tax-Free Money Market is a money market fund which seeks as high a level of
interest income exempt from regular federal income tax as is consistent with
prudent investment management, while seeking to conserve shareholders' capital.
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE PER SHARE.

AMERICAN CENTURY -- BENHAM LIMITED-TERM
TAX-FREE FUND
AMERICAN CENTURY -- BENHAM INTERMEDIATE-TERM
TAX-FREE FUND
AMERICAN CENTURY -- BENHAM LONG-TERM
TAX-FREE FUND

Limited-Term Tax-Free, Intermediate-Term Tax-Free and Long-Term Tax-Free
seek as high a level of interest income exempt from regular federal income taxes
as is consistent with prudent investment management, while seeking to conserve
shareholders' capital.

AMERICAN CENTURY -- BENHAM
HIGH-YIELD MUNICIPAL FUND

High-Yield Municipal seeks to provide high current income exempt from
federal income taxes as is consistent with its investment policies, which permit
investment in lower-rated and unrated securities. As a secondary objective, the
fund seeks capital appreciation.

HIGH-YIELD MUNICIPAL CAN INVEST ENTIRELY IN LOWER-QUALITY, HIGH-YIELD,
LONG-TERM MUNICIPAL BONDS. THESE BONDS ARE SUBJECT TO SUBSTANTIAL RISKS
INCLUDING PRICE VOLATILITY, LIQUIDITY RISK AND DEFAULT RISK. YOU SHOULD
CAREFULLY CONSIDER THE INCREASED RISKS OF INVESTING IN HIGH-YIELD MUNICIPAL
BEFORE INVESTING.

AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.

For ease of reference, the funds sometimes will be referred to in this
Prospectus by their investment category or fund type. Tax-Free Money Market,
Limited-Term Tax-Free, Intermediate-Term Tax-Free and Long-Term Tax-Free are
referred to as the "Tax-Free Funds." All funds except Tax-Free Money Market are
referred to collectively as the "Variable-Price Funds."

There is no assurance that the funds will achieve their
respective investment objectives.

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objectives of the Funds ....................................... 2
Transaction and Operating Expense Table .................................. 4
Financial Highlights ..................................................... 5
INFORMATION REGARDING THE FUNDS
Investment Policies of the Funds ......................................... 10
Tax-Free Money Market, Limited-Term Tax-Free,
Intermediate-Term Tax-Free, Long-Term Tax-Free ..................... 10
High-Yield Municipal .................................................. 10
Portfolio Investment Quality and Maturity
Guidelines ............................................................ 11
Money Market Funds .................................................... 11
Variable-Price Funds .................................................. 11
Risk Factors and Investment Techniques ................................... 11
Basic Fixed Income Investment Risks ................................... 12
Interest Rate Risk ............................................ 12
Credit Risk ................................................... 12
Concentration Risk ............................................ 12
Call Risk ..................................................... 12
Municipal Securities ............................................... 13
High-Yield Bonds ................................................... 14
Tax-Exempt Securities ................................................... 14
Other Investment Practices, Their Characteristics
and Risks ....................................................... 14
Portfolio Turnover ................................................. 14
When-Issued and Forward Commitment
Agreements ...................................................... 15
Interest Rate Futures Contracts and Options Thereon ................ 15
Restricted Securities .............................................. 15
Cash Management .................................................... 16
Other Techniques ................................................... 16
Performance Advertising ................................................. 16
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments ............................................. 18
Investing in American Century ............................................ 18
How to Open an Account ................................................... 18
By Mail ....................................................... 18
By Wire ....................................................... 18
By Exchange ................................................... 19
In Person ..................................................... 19
Subsequent Investments .................................................... 19
By Mail ....................................................... 19
By Telephone .................................................. 19
By Online Access .............................................. 19
By Wire ....................................................... 19
In Person ..................................................... 19
Automatic Investment Plan .......................................... 19
How to Exchange From One Account to Another ............................. 19
By Mail ....................................................... 20
By Telephone .................................................. 20
By Online Access .............................................. 20
How to Redeem Shares .................................................... 20
By Mail ....................................................... 20
By Telephone .................................................. 20
By Check-A-Month .............................................. 20
Other Automatic Redemptions ................................... 20
Redemption Proceeds ................................................ 20
By Check ...................................................... 20
By Wire and ACH ............................................... 20
Redemption of Shares in Low-Balance Accounts ....................... 21
Signature Guarantee ..................................................... 21
Special Shareholder Services ............................................ 21
Automated Information Line .................................... 21
Online Account Access ......................................... 21
CheckWriting .................................................. 21
Open Order Service ............................................ 22
Tax-Qualified Retirement Plans ............................................ 22
Important Policies Regarding Your Investments ........................... 22
Reports to Shareholders ................................................. 23
Employer-Sponsored Retirement Plans and
Institutional Accounts ................................................ 23
ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price .............................................................. 25
When Share Price Is Determined ........................................ 25
How Share Price Is Determined ............................................. 25
Where to Find Information About Share Price ........................... 26
Distributions ............................................................ 26
Taxes .................................................................... 26
Tax-Deferred Accounts ................................................. 27
Taxable Accounts ...................................................... 27
Special Tax Information .................................................. 28
Municipal Securities .................................................. 28
AMT Liability ......................................................... 28
Management ................................................................ 28
Investment Management ................................................. 28
Code of Ethics ........................................................ 30
Transfer and Administrative Services .................................. 30
Year 2000 Issues ...................................................... 31
Distribution of Fund Shares .............................................. 31
Further Information About American Century ............................... 31

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE
Limited-Term
Tax-Free,
Tax-Free Intermediate-
Money Term Tax-Free, High-Yield
Market Long-term Tax-Free Municipal
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases ........................ none none none
Maximum Sales Load Imposed
on Reinvested Dividends ..................................... none none none
Deferred Sales Load ............................................ none none none
Redemption Fee(1) .............................................. none none none
Exchange Fee ................................................... none none none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):
Management Fees(2) ............................................. 0.50% 0.51% 0.65%(3)
12b-1 Fees ..................................................... none none none
Other Expenses(4) .............................................. 0.00% 0.00% 0.00%
Total Fund Operating Expenses .................................. 0.50% 0.51% 0.65%

EXAMPLE:
You would pay the following 1 year $5 $5 $7
expenses on a $1,000 investment, 3 years 16 16 21
assuming a 5% annual return and 5 years 28 29 36
redemption at the end of each time period: 10 years 63 64 81
</TABLE>

(1) Redemption proceeds sent by wire are subject to a $10 processing fee.

(3) American Century Investment Management, Inc. has agreed to waive all
expenses of High-Yield Municipal through April 30, 1999. As a result,
Management Fees and Total Fund Operating Expenses would each be 0.00% until
this time. See "Management - Investment Management," page 28.

(4) Other expenses, which includes the fees and expenses (including legal
counsel fees) of those Trustees who are not "interested persons" as defined
in the Investment Company Act of 1940, are expected to be less than 0.01%
of 1% of average net assets for the current fiscal year.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
TAX-FREE MONEY MARKET

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before May 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the years ended May 31.

1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year ....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- ------- ------- ------- -------- --------- --------- -------- ------- -------
Income From
Investment
Operations
Net Investment Income ... 0.04 0.03 0.03 0.03 0.02 0.02 0.03 0.05 0.06 0.06
----------- ------- ------- ------- -------- --------- --------- -------- ------- -------
Distributions
From Net Investment
Income .................. (0.04) (0.03) (0.03) (0.03) (0.02) (0.02) (0.03) (0.05) (0.06) (0.06)
----------- ------- ------- ------- -------- --------- --------- -------- ------- -------
Net Asset Value,
End of Year ............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
=========== ======= ======= ======= ======== ========= ========= ======== ======= =======
Total Return(1) ......... 3.70% 2.98% 3.19% 2.95% 1.92% 2.12% 3.48% 5.13% 5.68% 5.80%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets .............. 0.04%(2) 0.67% 0.65% 0.66% 0.67% 0.68% 0.57% 0.50% 0.50% 0.50%
Ratio of Net Investment
Income to Average
Net Assets .............. 3.68%(2) 2.93% 3.12% 2.88% 1.89% 2.10% 3.40% 4.99% 5.56% 5.68%
Net Assets,
End of Year
(in thousands) .......... $444,277 $85,730 $91,118 $92,034 $109,818 $109,875 $111,112 $111,224 $92,975 $93,897
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

(2) American Century Investment Management, Inc. had voluntarily waived its
management fee from August 1, 1997, to July 31, 1998. In absence of the
waiver, the annualized ratio of operating expenses to average net assets
and annualized ratio of net investment income to average net assets would
have been 0.52% and 3.20%, respectively.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
LIMITED-TERM TAX-FREE

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before October 31, 1996, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the periods ended May 31, except
as noted.

1998(1) 1997(2) 1996 1995 1994 1993(3)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ................ $10.11 $10.08 $10.09 $9.95 $10.04 $10.00
---------- ---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income .............. 0.24 0.41 0.43 0.44 0.36 0.21
Net Realized and
Unrealized Gain(Loss)
on Investment Transactions ......... 0.05 0.10 (0.01) 0.14 (0.09) 0.04
---------- ---------- ---------- ---------- ---------- ----------
Total From Investment Operations ... 0.29 0.51 0.42 0.58 0.27 0.25
---------- ---------- ---------- ---------- ---------- ----------
Distributions
From Net Investment Income ......... (0.24) (0.41) (0.43) (0.44) (0.36) (0.21)
From Net Realized Gains
on Investment Transactions ......... -- (0.07) -- -- -- --
Total Distributions ................ (0.24) (0.48) (0.43) (0.44) (0.36) (0.21)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ..... $10.16 $10.11 $10.08 $10.09 $9.95 $10.04
========== ========== ========== ========== ========== ==========
Total Return(4) .................... 2.87% 5.22% 4.26% 5.95% 2.75% 2.55%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .............. 0.52%(5) 0.59% 0.38%(6) --(6) --(6) --(6)
Ratio of Net Investment Income
to Average Net Assets .............. 4.04%(5) 4.05% 4.28% 4.38% 3.62% 3.09%(5)
Portfolio Turnover Rate ............ 28% 74% 68% 78% 42% 3%
Net Assets, End
of Period (in thousands) ........... $38,410 $36,437 $49,866 $58,837 $60,857 $52,265
</TABLE>

(1) Seven months ended May 31, 1998. The fund's fiscal year end was changed
from October 31 to May 31 resulting in a seven month reporting period.

(2) On August 29, 1997, the fund acquired all the net assets of American
Century-Benham Limited-Term Tax-Exempt Fund.

(3) March 1, 1993 (inception) through October 31, 1993.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

(6) American Century Investment Management, Inc. had voluntarily waived its
management fee through February 29, 1996. In absence of the waiver, the
ratio of operating expenses to average net assets would have been 0.60%.

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INTERMEDIATE-TERM TAX-FREE

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before October 31, 1996, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the periods ended May 31, except
as noted.

1998(1) 1997(2) 1996 1995 1994 1993(3) 1992(3) 1991(3) 1990(3) 1989(3) 1988(3)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Period ........ $10.46 $10.35 $10.45 $10.01 $10.75 $10.27 $10.06 $9.66 $9.67 $9.73 $9.42
-------- -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
Income From Investment
Operations
Net Investment Income ...... 0.28 0.49 0.48 0.49 0.48 0.48 0.48 0.54 0.56 0.56 0.54
Net Realized and
Unrealized
Gain (Loss) on
Investment
Transactions ............... 0.08 0.21 (0.03) 0.52 (0.61) 0.55 0.21 0.40 (0.01) (0.06) 0.31
-------- -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
Total From
Investment Operations ...... 0.36 0.70 0.45 1.01 (0.13) 1.03 0.69 0.94 0.55 0.50 0.85
-------- -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
Distributions
From Net Investment Income . (0.28) (0.49) (0.48) (0.49) (0.48) (0.48) (0.48) (0.54) (0.56) (0.56) (0.54)
From Net Realized Gains
on Investment Transactions . (0.02) (0.10) (0.07) (0.08) (0.13) (0.07) -- -- -- -- --
-------- -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
Total Distributions ........ (0.30) (0.59) (0.55) (0.57) (0.61) (0.55) (0.48) (0.54) (0.56) (0.56) (0.54)
-------- -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
Net Asset Value,
End of Period .............. $10.52 $10.46 $10.35 $10.45 $10.01 $10.75 $10.27 $10.06 $9.66 $9.67 $9.73
======== ======== ======= ======= ======= ======= ======== ======= ======= ======= =======
Total Return(4) ............ 3.50% 6.88% 4.47% 10.41% (1.25)% 10.25% 7.00% 9.91% 5.89% 5.30% 9.18%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to
Average Net Assets ......... 0.51%(5) 0.58% 0.60% 0.60% 0.60% 0.72% 0.98%(6) 0.96%(6) 1.00% 1.00% 1.00%
Ratio of Net Investment
Income to Average
Net Assets ................. 4.62%(5) 4.71% 4.66% 4.77% 4.59% 4.51% 4.68% 5.40% 5.80% 5.79% 5.57%
Portfolio Turnover Rate .... 17% 35%(7) 39% 32% 74% 38% 36% 62% 102% 74% 86%
Net Assets, End
of Period
(in thousands) .............$137,907 $132,416 $80,568 $80,248 $81,400 $98,740 $76,745 $45,359 $25,587 $20,616 $14,286
</TABLE>

(1)Seven months ended May 31, 1998. The fund's fiscal year end was changed from
October 31 to May 31 resulting in a seven month reporting period.

(2)On August 29, 1997, the fund acquired all the net assets of American
Century-Benham Intermediate-Term Tax-Exempt Fund.

(3)The data presented has been restated to give effect to a 10 to one stock
split in the form of a stock dividend that occurred on November 13, 1993.

(4)Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5)Annualized.

(6)Expenses are shown net of management fees waived by the manager for
low-balance account fees collected during the period.

(7)Purchases, sales and market value amounts for Benham Intermediate-Term
Tax-Free Fund prior to the merger were excluded from the portfolio turnover
calculation.

PROSPECTUS FINANCIAL HIGHLIGHTS 7

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
LONG-TERM TAX-FREE

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for each of the
periods ended on or before October 31, 1996, have been audited by other
independent accountants. The annual report contains additional performance
information and will be made available upon request and without charge. The
information presented is for a share outstanding throughout the periods ended
May 31, except as noted.

1998(1) 1997(2) 1996 1995 1994 1993(3) 1992(3) 1991(3) 1990(3) 1989(3) 1988(3)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Period ....... $10.75 $10.58 $10.54 $9.75 $11.10 $10.36 $10.23 $9.62 $9.84 $9.73 $9.09
-------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income From
Investment Operations
Net Investment Income ..... 0.31 0.55 0.53 0.53 0.52 0.53 0.53 0.57 0.60 0.62 0.61
Net Realized and
Unrealized Gain
(Loss) on Investment
Transactions .............. 0.13 0.33 0.04 0.83 (1.01) 0.90 0.22 0.61 (0.12) 0.11 0.64
-------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total From
Investment Operations ..... 0.44 0.88 0.57 1.36 (0.49) 1.43 0.75 1.18 0.48 0.73 1.25
-------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions
From Net
Investment Income ......... (0.31) (0.55) (0.53) (0.53) (0.52) (0.53) (0.53) (0.57) (0.61) (0.62) (0.61)
From Net Realized
Gains on Investment
Transactions .............. (0.07) (0.16) -- (0.04) (0.34) (0.16) (0.09) -- (0.09) -- --
-------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions ....... (0.38) (0.71) (0.53) (0.57) (0.86) (0.69) (0.62) (0.57) (0.70) (0.62) (0.61)
-------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period ............. $10.81 $10.75 $10.58 $10.54 $9.75 $11.10 $10.36 $10.23 $9.62 $9.84 $9.73
======== ======== ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return(4) ........... 4.18% 8.59% 5.60% 14.45% (4.70)% 14.32% 7.43% 12.54% 5.04% 7.75% 14.15%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to
Average Net Assets ........ 0.51%(5) 0.58% 0.59% 0.59% 0.60% 0.73% 0.98%(6) 0.96%(6) 1.00% 1.00% 1.00%
Ratio of Net Investment
Income to Average
Net Assets ................ 4.96%(5) 5.16% 5.06% 5.24% 5.00% 4.90% 5.07% 5.73% 6.22% 6.36% 6.43%
Portfolio Turnover Rate ... 47% 65%(7) 60% 61% 66% 81% 88% 110% 144% 120% 215%
Net Assets, End
of Period (in thousands) ..$116,615 $108,868 $60,772 $57,997 $50,964 $70,757 $61,825 $39,229 $27,862 $20,217 $12,407
</TABLE>

(1)Seven months ended May 31, 1998. The fund's fiscal year end was changed from
October 31 to May 31 resulting in a seven month reporting period.

(2)On August 29, 1997, the fund acquired all the net assets of American
Century-Benham Long-Term Tax-Exempt Fund.

(3)The data presented has been restated to give effect to a 10 to one stock
split in the form of a stock dividend that occurred on November 13, 1993.

(4)Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5)Annualized.

(6)Expenses are shown net of management fees waived by the manager for
low-balance account fees collected during the period.

(7)Purchases, sales and market value amounts for Benham Long-Term Tax-Free Fund
prior to the merger were excluded from the portfolio turnover calculation.

8 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

FINANCIAL HIGHLIGHTS
HIGH-YIELD MUNICIPAL

The Financial Highlights for the period ended May 31, 1998, have been audited
by PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The information presented is for a share outstanding throughout the
periods ended May 31, 1998.

1998(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ............................. $ 9.99
----------
Income from Investment Operations
Net Investment Income ........................................... 0.09
Net Realized and Unrealized Gain on Investment Transactions ..... 0.09
----------
Total From Investment Operations ................................ 0.18
----------
Distributions
From Net Investment Income ...................................... (0.09)
Net Asset Value, End of Period ................................... $ 10.08
==========
Total Return((2) ................................................ 1.81%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets(3) ............. --
Ratio of Net Investment Income to Average Net Assets(3) .......... 5.38%
Portfolio Turnover Rate .......................................... 44%
Net Assets, End of Period (in thousands) ......................... $ 18,788

(1) March 31, 1998 (commencement of investment operations) through May 31,
1998.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized. American Century Investment Management, Inc. has voluntarily
agreed to pay all expenses of the fund through April 30, 1999. In absence
of the waiver, the annualized ratio of operating expenses to average net
assets would have been 0.64% and the annualized ratio of net investment
income to average net assets would have been 4.74%.

PROSPECTUS FINANCIAL HIGHLIGHTS 9

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

For an explanation of the securities ratings referred to in the following
discussion, see "Other Informa-tion" in the Statement of Additional Information

TAX-FREE MONEY MARKET, LIMITED-TERM TAX-FREE, INTERMEDIATE-TERM TAX-FREE,
LONG-TERM TAX-FREE

The Tax-Free Funds seek as high a level of current income exempt from
regular federal income tax as is consistent with prudent investment management
and conservation of shareholders' capital.

Each Tax-Free Fund is a "diversified company" as defined in the Investment
Company Act of 1940. This means that, with respect to 75% of its total assets,
each Tax-Free Fund will not invest more than 5% of its total assets in the
securities of a single issuer. This policy is fundamental.

Each Tax-Free Fund intends to remain fully invested in municipal
obligations, although for temporary defensive purposes, each may invest a
portion of its assets in U.S. government securities, the interest income on
which is subject to federal income tax. The municipal obligations in which the
funds may invest include securities issued by U.S. territories or possessions,
such as Puerto Rico, provided that the interest on these securities is exempt
from regular federal income tax.

The Tax-Free Funds may invest up to 20% of their total assets in municipal
obligations for which the interest is a tax preference item for purposes of the
Federal Alternative Minimum Tax (AMT).

HIGH-YIELD MUNICIPAL

High-Yield Municipal seeks to provide high current income exempt from
federal income tax as is consistent with its investment policies, which permit
investment in lower-rated and unrated securities. As a secondary objective, the
fund seeks capital appreciation.

High-Yield Municipal is a "non-diversified company" as defined in the
Investment Company Act. However, High-Yield Municipal intends to meet federal
tax requirements for qualification as a regulated investment company, as
described in the fund's Statement of Additional Information.

High-Yield Municipal intends to remain fully invested in municipal
obligations (obligations issued by or on behalf of a state or its political
subdivisions, agencies and instrumentalities). High-Yield Municipal also may
invest in securities issued by U.S. territories or possessions, such as Puerto
Rico, provided that the interest on these securities is exempt from regular
federal income tax. As a fundamental policy, High-Yield Municipal will invest at
least 80% of its net assets in obligations with interest exempt from regular
federal income tax. High-Yield Municipal is not limited, however, in its
investments in securities that are subject to the AMT.

High-Yield Municipal is authorized, under normal conditions, to invest as
much as 100% of its net assets in municipal obligations for which the interest
is a tax preference item for purposes of the AMT. If you are or become subject
to the AMT, a portion of your income distributions that are exempt from regular
federal income tax may not be exempt from the AMT.

Because High-Yield Municipal's investments combine long maturity and lower
credit quality, the fund is potentially the most risky and the most rewarding of
the Variable-Price Funds. (See "High Yield Bonds," page 14.)

10 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

High-Yield Municipal intends to remain fully invested in municipal
obligations, although for temporary defensive purposes, it may invest a portion
of its assets in U.S. government securities, the interest income on which is
subject to federal income tax.

PORTFOLIO INVESTMENT QUALITY AND
MATURITY GUIDELINES

MONEY MARKET FUND

(1) Buys only U.S. dollar-denominated obligations with remaining maturities
of 13 months or less (and variable- and floating-rate obligations with
demand features that effectively shorten their maturities to 13 months
or less);

(2) Maintains a dollar-weighted average maturity of 90 days or less; and

(3) Restricts its investments to high-quality obligations determined by the
manager, pursuant to procedures established by the Board of Trustees,
to present minimal credit risks.

To be considered high quality, an obligation must be:

(1) A U.S. government obligation; or

(2) Rated (or issued by an issuer rated with respect to a class of
comparable short-term obligations) in one of the two highest rating
categories for short-term obligations by at least two nationally
recognized statistical rating agencies ("rating agencies") (or one if
only one has rated the obligation); or

(3) An obligation judged by the manager, pursuant to guidelines established
by the Board of Trustees, to be of quality comparable to the securities
listed above.

VARIABLE-PRICE FUNDS

The Variable-Price Funds differ in their maturity criteria as follows:

Limited-Term Tax-Free invests primarily in short-term municipal obligations.
The manager expects the fund to maintain a weighted average maturity of five
years or less.

Intermediate-Term Tax-Free invests primarily in municipal obligations with
maturities of four or more years. The manager expects the fund to maintain a
weighted average maturity that ranges from five to 10 years.

Long-Term Tax-Free invests primarily in long-term municipal obligations. The
manager expects the fund to maintain a weighted average maturity of 10 years or
more.

High-Yield Municipal invests primarily in long-term municipal obligations;
however, it is not restricted in its purchase of shorter-term obligations. The
fund therefore does not have strict limits on its weighted average maturity.
Currently, the manager expects the fund to maintain a weighted average maturity
of 10 years or more.

In terms of credit quality, each Variable-Price Fund (except High-Yield
Municipal) restricts its investments to:

(1) Municipal bonds rated, when acquired, within the four highest
categories designated by a rating agency;

(2) Municipal notes (including variable-rate demand obligations) and
tax-exempt commercial paper rated, when acquired, within the two
highest categories designated by a rating agency; and

(3) Unrated obligations judged by the manager, under the direction of the
Board of Trustees, to be of comparable quality.

High-Yield Municipal is not limited in its ability to purchase securities
that are rated in the lower rating categories by rating agencies.

RISK FACTORS AND INVESTMENT TECHNIQUES

PROSPECTUS INFORMATION REGARDING THE FUNDS 11

BASIC FIXED INCOME INVESTMENT RISKS

The Variable-Price Funds offer a range of potential for income and total
return based on their respective quality and maturity criteria.

INTEREST RATE RISK

CREDIT RISK

In selecting investments for each fund, the manager carefully considers the
creditworthiness of parties and their reliability for the timely payment of
interest and repayment of principal.

In many cases, these parties include not only the issuer of the obligation,
but a bank or other financial intermediary who offers a letter of credit or
other form of guarantee on the obligation.

The Variable-Price Funds described in this Prospectus (except High-Yield
Municipal) may invest up to 15% of their total assets in unrated securities.
High-Yield Municipal is not limited in this regard. The Money Market Fund may
invest up to 10% of its total assets in unrated securities. Unrated securities
may be less liquid than rated securities.

The Variable-Price Funds may invest in securities rated Baa or BBB (the
lowest investment grade category). Each Variable-Price Fund (except High-Yield
Municipal) will limit its investment in securities rated Baa or BBB to 25% of a
fund's total assets. Such securities are medium-grade investment obligations
that may have speculative characteristics. Changes in economic conditions or
other circumstances are more likely to lead to a weakened capacity for such
obligations to make principal and interest payments.

High-Yield Municipal may invest a substantial portion of its assets in
noninvestment-grade municipal bonds, including bonds that are in technical or
monetary default. These lower quality municipal securities are more vulnerable
to economic conditions than higher-rated bonds, and they also may be
considerably less liquid and more volatile in price.

CONCENTRATION RISK

CALL RISK

12 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

MUNICIPAL SECURITIES

MUNICIPAL NOTES typically have maturities of 13 months or less and are used
to provide short-term capital or to meet cash-flow demands.

GENERAL OBLIGATION BONDS are backed by the taxing power of the issuer.

REVENUE BONDS are backed by the revenues derived from a specific project,
system or facility. Industrial development bonds are a type of revenue bond
backed by the credit of a private issuer.

MUNICIPAL LEASE OBLIGATIONS are issued by state and local governments to
acquire land and a wide variety of equipment and facilities. These obligations
typically are not fully backed by the issuing municipality's ability to assess
taxes to meet its debt obligations. If the state or local government does not
make appropriations for the following year's lease payments, the lease may
terminate, with the possibility of default on the lease obligation and loss to
investors.

The Variable-Price Funds may invest in INVERSE FLOATERS to generate higher
tax-exempt yields than are offered by other instruments. Inverse floaters bear
interest rates that move inversely to market interest rates. Generally, the
interest rate on the inverse floater is computed as the difference between an
above- market fixed rate of interest and a floating rate determined by reference
to a market-based or bond- specific interest rate.

In addition, corporate investors should note that all income from a fund may
be part of an adjustment to AMT under Section 55 of the Internal Revenue Code.
The AMT is a special separate tax that applies to certain taxpayers who have
certain adjustments to

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

income or tax preference items. High-Yield Municipal is authorized to invest as
much as 100% of its assets in AMT Securities.

HIGH-YIELD BONDS

The bonds purchased by High-Yield Municipal generally will be rated in the
lower rating categories of rating agencies (potentially as low as Caa by Moody's
or D by S&P) or in unrated securities that the manager deems appropriate to the
fund's investment objectives. In the taxable bond market, similarly rated
securities are commonly referred to as "junk" bonds. High-Yield Municipal may
hold bonds with higher ratings when the manager deems appropriate to the fund's
investment objectives and operations. For example, High-Yield Municipal may hold
higher-rated bonds when the yield differential between low-rated and
higher-rated bonds narrows and the risk of loss may be reduced substantially
with only a relatively small reduction in yield. The fund may also hold
higher-rated bonds when liquidity or market supply requires it to do so.

Issuers of high-yield bonds are more vulnerable to real or perceived
economic changes (such as an economic downturn or a prolonged period of rising
interest rates), political changes or adverse developments specific to the
issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations, to meet
projected business goals and to obtain additional financing. In the event of
default, the fund would experience a reduction of its income and could expect a
decline in the market value of the defaulted securities.

The market for lower-quality securities generally is less liquid than the
market for higher-quality securities. Adverse publicity and investor perceptions
as well as new or proposed laws also may have a greater negative impact on the
market for lower-quality securities.

TAX-EXEMPT SECURITIES

You can calculate your tax-equivalent yield (taking into account only
federal income tax and not any applicable state taxes) using the following
equation:

Fund's Tax-Free Yield Your Tax-
- --------------------------- = Equivalent
100% - Federal Tax Rate Yield

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

For additional information regarding the investment practices of any of the
funds, see the Statement of Additional Information.

PORTFOLIO TURNOVER

The portfolio turnover rates of the Variable-Price Funds are shown in the
financial information tables of this Prospectus.

The portfolio turnover of each fund may be higher than other mutual funds
with similar investment objectives. High turnover would generate correspondingly
higher transaction costs that are borne directly by a fund. Portfolio turnover
also may affect the character of capital gains, if any, realized and distributed

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

by a fund since short-term capital gains are taxable as ordinary income.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

Each of the funds may purchase new issues of securities on a when-issued or
forward commitment basis when, in the opinion of the manager, such purchases
will further the investment objectives of the fund. The price of when-issued
securities is established at the time the commitment to purchase is made.
Delivery of and payment for these securities typically occur 15 to 45 days after
the commitment to purchase. Market rates of interest on debt securities at the
time of delivery may be higher or lower than those contracted for on the
when-issued security. Accordingly, the value of such security may decline prior
to delivery, which could result in a loss to the fund. The manager will
segregate cash or appropriate assets in an amount at least equal to the
when-issued commitments. No income will accrue to the fund prior to delivery.

INTEREST RATE FUTURES CONTRACTS AND OPTIONS THEREON

The Variable-Price Funds may buy and sell interest rate futures contracts
relating to debt securities ("debt futures," i.e., futures relating to debt
securities, and "bond index futures," i.e., futures relating to indices on types
or groups of bonds), and write and buy put and call options relating to interest
rate futures contracts.

For options sold, a fund will segregate cash or appropriate liquid assets
equal to the value of securities underlying the option unless the option is
otherwise covered.

See the Statement of Additional Information for further information about
these instruments and their risks.

RESTRICTED SECURITIES

PROSPECTUS INFORMATION REGARDING THE FUNDS 15

for selection. Restricted securities typically are privately placed with and
traded among qualified institutional investors rather than the general public.

Restricted securities are not necessarily illiquid. With respect to certain
restricted securities (particularly those eligible for resale under Rule 144A),
the staff of the SEC has taken the position that the liquidity of such
securities in the portfolio of a fund offering redeemable securities is a
question of fact for the Board of Trustees to determine. This determination is
based upon consideration of the readily available trading markets and the review
of any contractual restrictions. The staff also acknowledges that while the
Board retains ultimate responsibility, it may delegate this function to the
manager. Accordingly, the Board of Trustees has established guidelines and
procedures for determining the liquidity of these restricted securities and has
delegated the day-to- day function of determining the liquidity of these
restricted securities to the manager. The Board retains the responsibility to
monitor the implementation of the guidelines and procedures it has adopted.

CASH MANAGEMENT

Up to 10% of a fund's total assets may be invested in this manner.

OTHER TECHNIQUES

PERFORMANCE ADVERTISING

16 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

PROSPECTUS INFORMATION REGARDING THE FUNDS 17

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

The funds offered by this Prospectus are a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-2021 for a brochure or prospectuses for the other funds in the
American Century Investments family.

INVESTING IN AMERICAN CENTURY

The following sections explain how to invest in American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
rGuide that you will receive when you open an account.

HOW TO OPEN AN ACCOUNT

The minimum investment is $2,500 for the Money Market Fund and $5,000 for
the Variable-Price Funds.

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111

o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

o REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see Bank to Bank Information on the following page.

o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

o BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):
o Taxpayer identification or Social Security
number
o If more than one account, account numbers and amount to be invested in
each account.
o Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See this
page for more information on exchanges.

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street Kansas City, Missouri 64111

4917 Town Center Drive Leawood, Kansas 66211

1665 Charleston Road Mountain View, California 94043

2000 S. Colorado Blvd. Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Investor Services Representative
or use our Automated Information Line.

BY ONLINE ACCESS

Upon completion of your application and once your account is open, you may
make investments online.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 18 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 19

Exchange for all of our other funds. See "When Share Price Is Determined," page
25.

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

BY ONLINE ACCESS

You can make exchanges online. This service is established upon completion
and receipt of your application or by calling us at 1-800-345-2021 to get the
appropriate form.

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.

BY MAIL

Your written instructions to redeem shares may be made either by a
redemption form, which we will send to you upon request, or by a letter to us.
Certain redemptions may require a signature guarantee. Please see "Signature
Guarantee," page 21.

BY TELEPHONE

Upon completion of your application and once your account is open, you may
redeem your shares by calling an Investor Services Representative.

BY CHECK-A-MONTH

If you have at least a $10,000 balance in your Variable-Price fund account,
you may redeem shares by Check-A-Month. There are no minimum balance
requirements for Check-A-Month for Money Market Fund accounts. A Check-A-Month
plan automatically redeems enough shares each month to provide you a check in an
amount you choose (minimum $50). To set up a Check-A-Month plan, please call and
request our Check-A-Month brochure.

OTHER AUTOMATIC REDEMPTIONS

REDEMPTION PROCEEDS

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

Your bank usually will receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.
Wired funds are subject to a $10 fee to cover bank wire charges, which is
deducted from redemption proceeds. Once the funds are transmitted, the time

20 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

of receipt and the funds' availability are not under our control.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

SIGNATURE GUARANTEE

To protect your accounts from fraud, some transactions will require a
signature guarantee. A signature guarantee is required when redeeming more than
$100,000.

You can obtain a signature guarantee from a bank or trust company, credit
union, broker-dealer, securities exchange or association, clearing agency or
savings association, as defined by federal law.

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

SPECIAL SHAREHOLDER SERVICES

Our special shareholder services include:

AUTOMATED INFORMATION LINE

We offer an Automated Information Line, 24 hours a day, seven days a week,
at 1-800-345-8765. By calling the Automated Information Line, you may listen to
fund prices, yields and total return figures. You may also use the Automated
Information Line to make investments into your accounts (if we have your bank
information on file) and obtain your share balance, value and most recent
transactions. You also may exchange shares from one fund to another via the
Automated Information Line. Redemption instructions cannot be given via the
Automated Information Line.

ONLINE ACCOUNT ACCESS

You may contact us 24 hours a day, seven days a week at
www.americancentury.com to access daily share prices, receive updates on major
market indices and view historical performance of the fund. You can use your
personal access code and Social Security number to view your account balances
and account activity, make subsequent investments from your bank account or
exchange shares from one fund to another.

CHECKWRITING

CheckWriting redemptions may be made only on checks provided by us.
Currently, there is no charge for checks or for the CheckWriting service.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 21

Your account may be assessed a $15 service charge for checks drawn on
insufficient funds.

OPEN ORDER SERVICE

Through our open order service, you may designate a price at which to buy
shares of a variable-price fund by exchange from one of our money market funds,
or a price at which to sell shares of a variable-price fund by exchange to one
of our money market funds. The designated purchase price must be equal to or
lower, or the designated sale price equal to or higher, than the variable-priced
fund's net asset value at the time the order is placed. If the designated price
is met within 90 calendar days, we will execute your exchange order
automatically at that price (or better). Open orders not executed within 90 days
will be canceled.

TAX-QUALIFIED RETIREMENT PLANS

Some funds are available for your tax-deferred retirement plan. Call or
write us and request the appropriate forms for:

* Individual Retirement Accounts ("IRAs");

* 403(b) plans for employees of public school systems and non-profit
organizations; or

* Profit-sharing plans and pension plans for corporations and other
employers.

If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.

You also can transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

(1) We reserve the right for any reason to suspend the offering of shares
for a period of time, or to reject any specific purchase order
(including purchases by exchange). Additionally, purchases may be
refused if, in the opinion of the manager, they are of a size that
would disrupt the management of the fund.

(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and
redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all
shareholders or only certain series or classes of shareholders.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(4) Transactions requesting a specific price and date, other than open
orders, will be refused. Once you have mailed or otherwise transmitted
your transaction instructions to us, they may not be modified or
canceled.

(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require
evidence satisfactory to us of the authority of the individual making
the request.

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers,

22 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

recording telephone calls, and providing written confirmations of
telephone transactions. These procedures are designed to protect
shareholders from unauthorized or fraudulent instructions. If we do not
employ reasonable procedures to confirm the genuineness of
instructions, then we may be liable for losses due to unauthorized or
fraudulent instructions. The company, its transfer agent and manager
will not be responsible for any loss due to instructions they
reasonably believe are genuine.

(7) All signatures should be exactly as the name appears in the
registration. If the owner's name appears in the registration as Mary
Elizabeth Jones, she should sign that way and not as Mary E. Jones.

(8) Unusual stock market conditions have in the past resulted in an
increase in the number of shareholder telephone calls. If you
experience difficulty in reaching us during such periods, you may send
your transaction instructions by mail, express mail or courier service,
or you may visit one of our Investor Centers. You also may also use our
Automated Information Line if you have requested and received an access
code and are not attempting to redeem shares.

(10) We will perform special inquiries on shareholder accounts. A research
fee of $15 per hour may be applied.

REPORTS TO SHAREHOLDERS

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS AND
INSTITUTIONAL ACCOUNTS

If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance com-

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 23

pany or other financial intermediary, your ability to purchase, exchange and
redeem shares will depend on your agreement with, and the policies of, such
financial intermediary.

You may reach an Institutional Service Represen-tative by calling
1-800-345-3533 to request information about our funds and services, to obtain a
current prospectus or to get answers to any questions about our funds and
services that you are unable to obtain through your plan administrator or
financial intermediary.

24 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares also is referred to as their net asset value. Net
asset value is determined by calculating the total value of a fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except the funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange is open, usually
3 p.m. Central time. The net asset values for the Target Maturities funds are
determined one hour prior to the close of the Exchange.

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

available, securities and other assets are valued at fair value as determined in
accordance with procedures adopted by the Board of Trustees.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

DISTRIBUTIONS

At the close of each day, including Saturdays, Sundays and holidays, net
investment income of the Variable-Price Funds is determined and declared as a
distribution. Distributions will be paid monthly on the last Friday of each
month, except for year-end distributions which will be made on the last business
day of the year. For the Money Market Fund, dividends are declared and credited
(i.e., available for redemption) daily and distributed monthly on the last
Friday of each month.

You will begin to participate in the distributions the day after your
purchase is effective. See "When Share Price Is Determined," page 25.) If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed (other than by CheckWriting), the
distribution on the redeemed shares will be included with your redemption
proceeds.

Distributions from net realized capital gains, if any, generally are
declared and paid once a year, but the funds may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act. Tax-Free Money Market does not expect to realize any
long-term capital gains, and accordingly does not expect to pay any capital
gains distributions.

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 591/2 years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.

TAXES

Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that because each fund distributes all of its income, it pays
no income tax.

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

TAX-DEFERRED ACCOUNTS

If fund shares are purchased through tax-deferred accounts, such as
qualified employer-sponsored retirement or savings plans, income and capital
gains distributions paid by the funds generally will not be subject to current
taxation, but will accumulate in your account under the plan on a tax-deferred
basis.

TAXABLE ACCOUNTS

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

Redemption of shares of a fund (including a redemption made in an exchange
transaction) will be a taxable transaction for federal income tax purposes, and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss, and generally will be considered long-term subject to
tax at a maximum rate of 28% if shareholders have held such shares for a period
of more than 12 months but no more than 18 months, and long-term subject to tax
at a maximum rate of 20% if shareholders have held such shares for a period of
more than 18 months. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Internal Revenue Code,
resulting in a postponement of the recognition of such loss for federal income
tax purposes.

SPECIAL TAX INFORMATION

MUNICIPAL SECURITIES

AMT LIABILITY

MANAGEMENT

INVESTMENT MANAGEMENT

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

bers of the team also may adjust portfolio holdings of the funds as necessary
between team meetings.

The portfolio manager members of the teams managing the funds described in
this Prospectus and their work experience for the last five years are as
follows:

G. DAVID MACEWEN, Vice President and Senior Portfolio Manager, supervises
the team that manages the funds in the American Century Municipal Trust and has
been a member of the team that manages Long-Term Tax-Free since May 1991. Mr.
MacEwen joined American Century in 1991 as a Municipal Portfolio Manager. Mr.
MacEwen is a member of the Association of Investment Management and Research
(AIMR) and the Securities Analysts of San Francisco. He holds a bachelor's
degree in economics from Boston University and an MBA in finance from the
University of Delaware.

JOEL SILVA, Senior Portfolio Manager, has been a member of the team that
manages Limited-Term Tax-Free since August 1995, Intermediate-Term Tax-Free
since June 1994, and High-Yield Municipal since its inception in March 1998. Mr.
Silva joined American Century in 1989. Before being promoted to his current
position, Mr. Silva was a municipal bond trader. He holds a bachelor's degree
from California Polytechnic University and an MBA in corporate finance from
California State University, Hayward. Mr. Silva is a Registered Representative.

STEVEN M. PERMUT, Senior Portfolio Manager and Director of Municipal
Research, has been a member of the team that manages High-Yield Municipal since
its inception in March 1998. Mr. Permut joined American Century in 1987 and is
the past Chairman of the California Society of Municipal Analysts and a member
of the Board of Directors of the National Federation of Municipal Analysts. He
holds a bacheloris degree in business and geography from State University of New
York, Oneonta and an MBA in Finance from Golden Gate University, San Francisco.

BRYAN E. KARCHER, Portfolio Manager, has been a member of the team that
manages Tax-Free Money Market since April 1995. Mr. Karcher joined American
Century in 1989. Before being promoted to his current position, Mr. Karcher was
a research analyst. He holds a bachelor's degree in economics from the
University of California, Los Angeles and is a Chartered Financial Analyst.

For the services provided to the funds, the manager receives a monthly fee
based on a percentage of the average net assets of each fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category that are managed by the manager (the "Investment Category
Fee"). There are three investment categories: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the "Complex Fee"). The Investment
Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for each of the funds is an annual rate of the average net assets
of the fund as follows: Tax-Free Money Market, 0.20%; Limited-Term Tax-Free,
Intermediate-Term Tax-Free and Long-Term Tax-Free, 0.21%; and High-Yield
Municipal, 0.35%. The Complex Fee is currently an annual rate of 0.30% of the
average net assets of a fund. Further information about the calculation of the
annual management fee is contained in the Statement of Additional Information.

The manager is currently waiving management fees for High-Yield Municipal
through April 30, 1999. After the expiration of the waiver, the manager will
decrease its fee waiver by 0.10% of the fund's net assets on a monthly basis
until the waiver no longer

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 29

exists. For example, High-Yield Municipal's management fees in May 1999 will
equal 0.10% of net assets; in June 1999, High-Yield Municipal's management fees
will equal 0.20% of net assets. Based on current asset totals, this gradual
expiration of the manager's fee waiver will continue until November 1999, when
the entire fee will be imposed.

CODE OF ETHICS

TRANSFER AND ADMINISTRATIVE SERVICES

Although there is no sales charge levied by the funds, transactions in
shares of the funds may be executed by brokers or investment advisors who charge
a transaction-based fee or other fee for their services. Such charges may vary
among broker- dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the funds or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.

The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (ACC), which is controlled by James E. Stowers Jr.

YEAR 2000 ISSUES

30 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

particularly its ability to provide shareholder services, may be hampered.

In addition, the issuers of securities the funds own could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the funds' perfor- mance. The manager
has established a process to gather publicly available information about the
Year 2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the manager may consider when making investment decisions, and other factors may
receive greater weight.

DISTRIBUTION OF FUND SHARES

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the funds offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
funds are paid by the manager.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of Trustees can elect all of the
Trustees if they choose to do so and, in such event, the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Trustees.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 31

NOTES

32 NOTES

NOTES

NOTES 33

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485

FAX: 816-340-7962

www.americancentury.com

[american century logo(reg.sm)]
American
Century(reg.sm)

9808 [recycled logo]
SH-BKT-13259 Recycled
<PAGE>

PROSPECTUS

[american century logo(reg.sm)]
American
Century(reg.sm)
---------------
Brokerage
---------

AUGUST 31, 1998

BENHAM
GROUP(reg.tm)

Tax-Free Money Market
INVESTOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

PROSPECTUS
AUGUST 31, 1998

Tax-Free Money Market
INVESTOR CLASS

AMERICAN CENTURY MUNICIPAL TRUST

American Century Municipal Trust is a part of American Century Investments,
a family of funds that includes nearly 70 no-load mutual funds covering a
variety of investment opportunities. One of the funds from our Benham Group that
invests in municipal securities is described in this Prospectus. Its investment
objective is listed on page 2 of this Prospectus. The other funds are described
in separate prospectuses.

Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.

This Prospectus gives you information about the fund that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated August 31, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419200
Kansas City, Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri: 816-444-3485
www.americancentury.com

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS

INVESTMENT OBJECTIVE OF THE FUND

AMERICAN CENTURY -- BENHAM TAX-FREE
MONEY MARKET FUND

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.

There is no assurance that the fund will achieve its investment objective.

NO PERSON IS AUTHORIZED BY THE FUND TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY OR ON BEHALF OF THE FUND, AND YOU SHOULD NOT RELY
ON ANY OTHER INFORMATION OR REPRESENTATION.

2 INVESTMENT OBJECTIVE AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS
Investment Objective of the Fund ........................................... 2
Transaction and Operating Expense Table .................................... 4
Financial Highlights ....................................................... 5
INFORMATION REGARDING THE FUND
Investment Policies of the Fund ............................................ 6
Tax-Free Money Market ................................................... 6
Portfolio Investment Quality and
Maturity Guidelines ..................................................... 6
Risk Factors and Investment Techniques ..................................... 6
Basic Fixed Income Investment Risks ..................................... 7
Interest Rate Risk .............................................. 7
Credit Risk ..................................................... 7
Concentration Risk .......................................................... 7
Call Risk ....................................................... 7
Municipal Securities ................................................. 7
Tax-Exempt Securities ..................................................... 8
Other Investment Practices, Their
Characteristics and Risks ......................................... 8
When-Issued and Forward Commitment
Agreements ........................................................ 8
Restricted Securities ....................................................... 9
Cash Management ............................................................. 9
Other Techniques ............................................................ 9
Performance Advertising ..................................................... 9
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
How to Purchase and Sell American
Century Funds ........................................................... 11
How to Exchange From One American
Century Fund to Another ................................................. 11
How to Redeem Shares ........................................................ 11
Telephone Services .......................................................... 11
Investors Line .............................................................. 11
ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ................................................................ 12
When Share Price Is Determined .......................................... 12
How Share Price Is Determined ........................................... 12
Where to Find Information About Share Price ............................. 12
Distributions .............................................................. 13
Taxes ...................................................................... 13
Tax-Deferred Accounts ................................................... 13
Taxable Accounts ........................................................ 13
Special Tax Information .................................................... 14
Municipal Securities .................................................... 14
AMT Liability ........................................................... 15
Management ................................................................. 15
Investment Management ................................................... 15
Code of Ethics .......................................................... 16
Transfer and Administrative Services .................................... 16
Year 2000 Issues ........................................................ 16
Distribution of Fund Shares ................................................ 17
Further Information About American Century ................................. 17

PROSPECTUS TABLE OF CONTENTS 3

TRANSACTION AND OPERATING EXPENSE TABLE
Tax-Free Money
Market
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases .............................. none
Maximum Sales Load Imposed on Reinvested Dividends ................... none
Deferred Sales Load .................................................. none
Redemption Fee(1) .................................................... none
Exchange Fee ......................................................... none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):
Management Fees(2) ................................................... 0.50%
12b-1 Fees ........................................................... none
Other Expenses(3) .................................................... 0.00%
Total Fund Operating Expenses ........................................ 0.50%

EXAMPLE:
You would pay the following expenses on 1 year $5
a $1,000 investment, assuming a 5% annual 3 years 16
return and redemption at the end of each time period: 5 years 28
10 years 63

(1) Redemption proceeds sent by wire are subject to a $10 processing fee.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
TAX-FREE MONEY MARKET

The Financial Highlights for the year ended May 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before May 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented is for a share outstanding throughout the years ended May 31.

1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year ........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ----- ------ ------ ------ ------ ------ ------ -------
Income From
Investment
Operations
Net Investment Income .... 0.04 0.03 0.03 0.03 0.02 0.02 0.03 0.05 0.06 0.06
------ ------ ----- ------ ------ ------ ------ ------ ------ -------
Distributions
From Net Investment
Income ................... (0.04) (0.03) (0.03) (0.03) (0.02) (0.02) (0.03) (0.05) (0.06) (0.06)
------ ------ ----- ------ ------ ------ ------ ------ ------ -------
Net Asset Value,
End of Year .............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ====== ===== ====== ====== ====== ====== ===== ======= =======
Total Return(1) .......... 3.70% 2.98% 3.19% 2.95% 1.92% 2.12% 3.48% 5.13% 5.68% 5.80%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to Average
Net Assets ............... 0.04%(2) 0.67% 0.65% 0.66% 0.67% 0.68% 0.57% 0.50% 0.50% 0.50%

Ratio of Net
Investment
Income to
Average
Net Assets ............... 3.68%(2) 2.93% 3.12% 2.88% 1.89% 2.10% 3.40% 4.99% 5.56 5.68%

Net Assets, End of Year
(in thousands) ...........$444,277 $85,730 $91,118 $92,034 $109,818 $109,875 $111,112 $111,224 $92,975 $93,897
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

INFORMATION REGARDING THE FUND

INVESTMENT POLICIES OF THE FUND

The fund has adopted certain investment restrictions that are set forth in
the Statement of Additional Information. Those restrictions, as well as the
investment objective of the fund identified on page 2 of this Prospectus and any
other investment policies designated as "fundamental" in this Prospectus or in
the Statement of Additional Information, cannot be changed without shareholder
approval. The fund has implemented additional investment policies and practices
to guide its activities in the pursuit of its investment objective. These
policies and practices, which are described throughout this Prospectus, are not
designated as fundamental policies and may be changed without shareholder
approval.

For an explanation of the securities ratings referred to in the following
discussion, see "Other Information" in the Statement of Additional Information.

TAX-FREE MONEY MARKET

The fund seeks as high a level of current income exempt from regular federal
income tax as is consistent with prudent investment management and conservation
of shareholders' capital.

The fund is a "diversified company" as defined in the Investment Company Act
of 1940. This means that, with respect to 75% of its total assets, the fund will
not invest more than 5% of its total assets in the securities of a single
issuer. This policy is fundamental.

The fund intends to remain fully invested in municipal obligations, although
for temporary defensive purposes, it may invest a portion of its assets in U.S.
government securities, the interest income on which is subject to federal income
tax. The municipal obligations in which the fund may invest include securities
issued by U.S. territories or possessions, such as Puerto Rico, provided that
the interest on these securities is exempt from regular federal income tax.

The fund may invest up to 20% of its total assets in municipal obligations
for which the interest is a tax preference item for purposes of the Federal
Alternative Minimum Tax (AMT).

PORTFOLIO INVESTMENT QUALITY AND
MATURITY GUIDELINES

The fund may be appropriate for investors seeking share price stability who
can accept the lower yields that short-term obligations typically provide.

In selecting investments for the fund, the manager adheres to regulatory
guidelines concerning the quality and maturity of money market fund investments
as well as to internal guidelines designed to minimize credit risk. In
particular, the fund:

(1) Buys only U.S. dollar-denominated obligations with remaining maturities
of 13 months or less (and variable- and floating-rate obligations with
demand features that effectively shorten their maturities to 13 months
or less);

(2) Maintains a dollar-weighted average maturity of 90 days or less; and

(3) Restricts its investments to high-quality obligations determined by the
manager, pursuant to procedures established by the Board of Trustees,
to present minimal credit risks.

To be considered high quality, an obligation must be:

(1) A U.S. government obligation; or

(2) Rated (or issued by an issuer rated with respect to a class of
comparable short-term obligations) in one of the two highest rating
categories for short-term obligations by at least two nationally
recognized statistical rating agencies ("rating agencies") (or one if
only one has rated the obligation); or

(3) An obligation judged by the manager, pursuant to guidelines established
by the Board of Trustees, to be of quality comparable to the securities
listed above.

RISK FACTORS AND INVESTMENT TECHNIQUES

The market value of the investments of the fund will change over time in
response to a number of factors, which are summarized in the following
paragraphs.

6 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

BASIC FIXED INCOME INVESTMENT RISKS

The fund may be appropriate for investors who would like to (1) earn income
at tax-exempt money market rates while preserving their investment or (2) use a
money market fund as part of a long-term, balanced investment portfolio
consisting of money market instruments, bonds and stocks.

INTEREST RATE RISK

Interest rate changes affect the level of income the fund generates for
shareholders. This pattern is due to the time value of money. A bond's worth is
determined by the present value of its future cash flows. Consequently, changing
interest rates have a greater effect on the present value of a long-term bond
than a short-term bond.

CREDIT RISK

In selecting investments for the fund, the manager carefully considers the
creditworthiness of parties and their reliability for the timely payment of
interest and repayment of principal.

In many cases, these parties include not only the issuer of the obligation,
but a bank or other financial intermediary who offers a letter of credit or
other form of guarantee on the obligation.

The fund may invest up to 10% of its total assets in unrated securities.
Unrated securities may be less liquid than rated securities.

CONCENTRATION RISK

The fund may invest 25% or more of its total assets in obligations that
generate income from similar types of projects (in particular, projects in
health care, electric, water/sewer, education and transportation). Political or
economic developments affecting a single issuer or industry or similar types of
projects may have a significant effect on fund performance.

CALL RISK

MUNICIPAL SECURITIES

Municipal securities are issued to raise money for a variety of public
purposes, including general financing for state and local governments as well as
financing for specific projects and public facilities. Municipal securities may
be backed by the full taxing power of a municipality, the revenues from a
specific project or the credit of a private organization. The following
discussion provides a brief description of some securities the fund may buy. The
fund is not limited by this discussion, and it may buy other types of securities
and enter into other types of transactions that meet its quality, maturity and
liquidity requirements.

MUNICIPAL NOTES typically have maturities of 13 months or less and are used
to provide short-term capital or to meet cash-flow demands.

GENERAL OBLIGATION BONDS are backed by the taxing power of the issuer.

REVENUE BONDS are backed by the revenues derived from a specific project,
system or facility. Industrial development bonds are a type of revenue bond
backed by the credit of a private issuer.

TENDER OPTION BONDS are created by combining an intermediate- or long-term,
fixed-rate tax-exempt bond with a tender agreement that gives the holder the
option to tender the bond at face value. Tender option bonds purchased by the
fund are structured with rates that are reset weekly or at other regular
intervals.

A sponsor may terminate a tender option agreement if, for example, the
issuer of the underlying

PROSPECTUS INFORMATION REGARDING THE FUND 7

bond defaults on interest payments, or if the underlying bond is downgraded or
becomes taxable. Under such circumstances, the fund might then own a bond that
does not meet its quality or maturity criteria.

The manager monitors the credit quality of bonds underlying the fund's
tender option bond holdings and will sell or put back a tender option bond if
the rating on the underlying bond falls below the second-highest rating
designated by a rating agency.

MUNICIPAL LEASE OBLIGATIONS are issued by state and local governments to
acquire land and a wide variety of equipment and facilities. These obligations
typically are not fully backed by the issuing municipality's ability to assess
taxes to meet its debt obligations. If the state or local government does not
make appropriations for the following year's lease payments, the lease may
terminate, with the possibility of default on the lease obligation and loss to
investors.

ZERO-COUPON MUNICIPAL SECURITIES do not make regular interest payments.
Instead, they are sold at a deep discount to their face value. In calculating
daily dividends, the fund takes into account, as income, a portion of the
difference between these securities' purchase prices and face values. Because
zero-coupon securities do not pay current income, their prices can be very
volatile when interest rates change.

TAX-EXEMPT SECURITIES

The fund should be expected to invest at least some portion of its assets in
securities that, in the hands of some holders, would be subject to the AMT, as
long as management determines it is in the best interest of shareholders
generally to invest in such securities. See "Taxes," page 13.

The fund may quote tax-equivalent yields, which show the taxable yields an
investor would have to earn before taxes to equal the fund's tax-free yields. As
a prospective investor in the fund, you should determine whether your
tax-equivalent yield is likely to be higher with a taxable or with a tax-exempt
fund. To determine this, you may use the formula depicted below.

You can calculate your tax-equivalent yield (taking into account only
federal income tax and not any applicable state taxes) using the following
equation:

Fund's Tax-Free Yield Your Tax-
_______________________ = Equivalent
100% - Federal Tax Rate Yield

OTHER INVESTMENT PRACTICES, THEIR
CHARACTERISTICS AND RISKS

For additional information regarding the investment practices of the fund,
see the Statement of Additional Information.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

The fund may purchase new issues of securities on a when-issued or forward
commitment basis when, in the opinion of the manager, such purchases will
further the investment objective of the fund. The price of when-issued
securities is established at the time the commitment to purchase is made.
Delivery of and payment for these securities typically occur 15 to 45 days after
the commitment to purchase. Market rates of interest on debt securities at the
time of delivery may be higher or lower than those contracted for on the
when-issued security. Accordingly, the value of such security may decline prior
to delivery, which could result in a loss to the fund. The manager will
segregate cash or appropriate assets in

8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

an amount at least equal to the when-issued commitments. No income will accrue
to the fund prior to delivery.

RESTRICTED SECURITIES

The fund may, from time to time, purchase securities that are subject to
restrictions on resale ("restricted securities"). The fund purchases these
securities when they present attractive investment opportunities that otherwise
meet the fund's criteria for selection. Restricted securities typically are
privately placed with and traded among qualified institutional investors rather
than the general public.

Restricted securities are not necessarily illiquid. With respect to certain
restricted securities (particularly those eligible for resale under Rule 144A),
the staff of the SEC has taken the position that the liquidity of such
securities in the portfolio of a fund offering redeemable securities is a
question of fact for the Board of Trustees to determine. This determination is
based upon consideration of the readily available trading markets and the review
of any contractual restrictions. The staff also acknowledges that while the
Board retains ultimate responsibility, it may delegate this function to the
manager. Accordingly, the Board of Trustees has established guidelines and
procedures for determining the liquidity of these restricted securities and has
delegated the day-to-day function of determining the liquidity of these
restricted securities to the manager. The Board retains the responsibility to
monitor the implementation of the guidelines and procedures it has adopted.

The fund may not invest more than 10% of its net assets in illiquid
securities (securities that may not be sold within seven days at approximately
the price used in determining the net asset value of fund shares).

CASH MANAGEMENT

The fund may invest up to 5% of its total assets in any money market fund,
including those advised by the manager, provided that the investment is
consistent with the fund's investment policies and restrictions.

Up to 10% of the fund's total assets may be invested in this manner.

OTHER TECHNIQUES

The manager may buy other types of securities or employ other portfolio
management techniques on behalf of the fund. When SEC guidelines require it to
do so, the fund will set aside cash or appropriate liquid assets in a segregated
account to cover its obligations. See the Statement of Additional Information
for a more detailed discussion of these investments and some of the risks
associated with them.

PERFORMANCE ADVERTISING

From time to time, the fund may advertise performance data. Fund performance
may be shown by presenting one or more performance measurements, including
cumulative total return or average annual total return, yield, effective yield
and tax-equivalent yield (for tax-exempt funds).

A quotation of yield reflects the fund's income over a stated period
expressed as a percentage of the fund's share price. Yield is calculated by
measuring the income generated by an investment in the fund over a seven-day
period (net of expenses). This income is then annualized, that is, the amount of
income generated by the investment over the seven-day period is assumed to be
generated over each similar period each week throughout a full year and is shown
as a percentage of the investment. The effective yield is calculated in a
similar manner but, when annualized, the income earned by the investment is
assumed to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect on the assumed reinvestment.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules. Because yield accounting methods differ

PROSPECTUS INFORMATION REGARDING THE FUND 9

from the methods used for other accounting purposes, the fund's yield may not
equal the income paid on its shares or the income reported in the fund's
financial statements.

The fund also may include in advertisements data comparing its performance
with the performance of non-related investment media, published editorial
comments and performance rankings compiled by independent organizations (such as
Lipper Analytical Services or IBC's Money Fund Report) and publications that
monitor the performance of mutual funds. Performance information may be quoted
numerically or may be presented in a table, graph or other illustration. In
addition, fund performance may be compared to well-known indices of market
performance. Fund performance also may be compared, on a relative basis, to
other funds in our fund family. This relative comparison, which may be based
upon historical or expected fund performance, volatility or other fund
characteristics, may be presented numerically, graphically or in text. Fund
performance also may be combined or blended with other funds in our fund family,
and that combined or blended performance may be compared to the same indices to
which individual funds may be compared.

All performance information advertised by the fund is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

10 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

HOW TO INVEST WITH
AMERICAN CENTURY INVESTMENTS

The following section explains how to purchase, exchange and redeem the
Investor Class shares of the fund offered by this Prospectus through American
Century Brokerage Access AccountSM and Standard Account.

HOW TO PURCHASE AND SELL AMERICAN
CENTURY FUNDS

The fund offered by this Prospectus is available as an investment option in
connection with a program, product or service offered by American Century
Brokerage. Because all records of your share ownership are maintained by
American Century Brokerage, all orders to purchase, exchange and redeem shares
must be made through American Century Brokerage.

You should contact a Brokerage Associate at 1-888-345-2071 for information
about how to select American Century funds.

If you have questions about the fund, see "Investment Policies of the Fund,"
page 6, or call one of our Investor Services Representatives at 1-800-345-2021.

Orders to purchase shares are effective on the day we receive payment. See
"When Share Price Is Determined," page 12.

We may discontinue offering shares generally in the fund (including any
class of shares of the fund) or in any particular state without notice to
shareholders.

HOW TO EXCHANGE FROM ONE AMERICAN
CENTURY FUND TO ANOTHER

Your American Century Brokerage account permits you to exchange your
investment in the shares of the fund for shares of another fund in our funds
family. Contact American Century Brokerage at 1-888-345-2071 for details on the
rules governing exchanges.

HOW TO REDEEM SHARES

Subject to any restrictions imposed by American Century Brokerage, you can
sell ("redeem") your shares through American Century Brokerage at their net
asset value. American Century Brokerage will provide us with redemption
instructions. The shares will be redeemed at the net asset value next computed
after receipt of the instructions in good order. See "When Share Price Is
Determined," page 12. If you have any questions about how to redeem, contact an
American Century Brokerage Associate.

TELEPHONE SERVICES

INVESTORS LINE

To request information about our funds and a current Prospectus, or get
answers to any questions that you may have about the funds and the services we
offer, call one of our Investor Services Representatives at 1-800-345-2021.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 11

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares also is referred to as their net asset value. Net
asset value is determined by calculating the total value of a fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except the funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange ("the Exchange")
is open, usually 3 p.m. Central time. The net asset values for the Target
Maturities funds are determined one hour prior to the close of the Exchange.

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

Investment and transaction instructions received by us on any business day
by mail prior to the time as of which the net asset value is determined will
receive that day's price. Investments and instructions received after that time
will receive the price determined on the next business day.

If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, it is the responsibility of your plan
recordkeeper or financial intermediary to transmit your purchase, exchange and
redemption requests to the fund's transfer agent prior to the applicable cut-off
time for receiving orders, and to make payment for any purchase transactions in
accordance with the fund's procedures or any contractual arrangements with the
fund or the fund's distributor, in order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by a duly authorized intermediary, and
such orders will be priced at the fund's net asset value next determined after
acceptance on the fund's behalf by such intermediary.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

Pursuant to a determination by the fund's Board of Trustees and Rule 2a-7
under the Investment Company Act of 1940, portfolio securities of the fund are
valued at amortized cost. When a security is valued at amortized cost, it is
valued at its cost when purchased, and thereafter by assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The yield of the Investor Class of the fund is published weekly in leading
financial publications and daily in many local newspapers. Yield information
also may be obtained by calling us or by accessing our Web site at
www.americancentury.com.

12 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

DISTRIBUTIONS

Dividends are declared and credited (i.e., available for redemption) daily
and distributed monthly on the last Friday of each month.

You will begin to participate in the distributions the day after your
purchase is effective. See "When Share Price Is Determined," page 12. If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed, the distribution on the redeemed shares
will be included with your redemption proceeds.

Distributions from net realized capital gains, if any, generally are
declared and paid once a year, but the fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act. The fund does not expect to realize any long-term
capital gains, and accordingly does not expect to pay any capital gains
distributions.

TAXES

The fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that because the fund distributes all of its income, it pays
no income tax.

TAX-DEFERRED ACCOUNTS

If fund shares are purchased through tax-deferred accounts, such as
qualified employer-sponsored retirement or savings plans, income and capital
gains distributions paid by the fund generally will not be subject to current
taxation, but will accumulate in your account under the plan on a tax-deferred
basis.

TAXABLE ACCOUNTS

If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. Dividends representing income derived from tax-exempt bonds
generally retain the bonds' tax-exempt character in a shareholder's hands.
Distributions from gains on assets held longer than 12 months, but no more than
18 months (28% rate gain) and/or assets held longer than 18 months (20% rate
gain) are taxable as long-term gains regardless of the length of time you have
held the shares. However, you should note that any loss realized upon the sale
or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gains to you with respect to such shares (28% or 20% rate gain).

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 13

will not have increased. In addition, the share price at the time you purchase
shares may include unrealized gains in the securities held in the investment
portfolio of the fund. If these portfolio securities are subsequently sold and
the gains are realized, they will, to the extent not offset by capital losses,
be paid to you as a distribution of capital gains and will be taxable to you as
short-term or long-term capital gains (28% and/or 20% rate gain).

In January of the year following the distribution, you will receive a Form
1099-DIV notifying you of the status of your distributions for federal income
tax purposes. Please note, however, that tax-exempt dividends are not included
on Form 1099-DIV. The fund anticipates that substantially all of the dividends
to be paid by the fund will be exempt from federal income taxes to an individual
unless, due to that person's own tax situation, he or she is subject to the AMT.
In that case, it is likely that a portion of the dividends will be taxable to
that shareholder while remaining tax-exempt in the hands of most other
shareholders. The fund will advise shareholders of the percentage subject to the
individual AMT should a shareholder be subject to it.

SPECIAL TAX INFORMATION

The fund intends to invest at least 50% of its assets in state and municipal
obligations so that it will qualify to pay "exempt-interest dividends" to
shareholders. Such exempt-interest dividends generally are excludable from a
shareholder's gross income for federal tax purposes. If a fund earned federally
taxable income from any of its investments, the income would be distributed to
shareholders as a taxable dividend as described above.

MUNICIPAL SECURITIES

Opinions relating to the validity of municipal securities and the exemptions
of interest thereon from

14 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

federal income tax are rendered by bond counsel to the issuers. The fund and the
manager rely on the opinion of bond counsel and do not undertake any independent
investigation of proceedings relating to the issuance of state or municipal
securities. The fund may invest in various instruments that are not traditional
state and local obligations and that are believed to generate interest
excludable from taxable income under Code Section 103, including, but not
limited to, municipal lease obligations and inverse floaters. Although the fund
may invest in these instruments, they cannot guarantee the tax-exempt status of
the income earned thereon from any other investment.

AMT LIABILITY

To the extent that the fund invests in municipal obligations (private
activity bonds) whose interest is treated as a tax preference item in
calculating AMT liability, shareholders who calculate AMT liability will be
required to include a portion of the fund's dividends as a tax preference item
in making this calculation. In addition, corporate shareholders may be required
to include all dividends and distributions by the fund in an adjustment of
alternative minimum taxable income for purposes of the AMT imposed under
Internal Revenue Code, Section 55.

MANAGEMENT

INVESTMENT MANAGEMENT

The fund is an open-end series of the American Century Municipal Trust (the
"Trust"). Under the laws of the Commonwealth of Massachusetts, the Board of
Trustees is responsible for managing the business and affairs of the Trust.
Acting pursuant to an investment management agreement entered into with the
fund, American Century Investment Management, Inc. serves as the investment
manager of the fund. Its principal place of business is American Century Tower,
4500 Main Street, Kansas City, Missouri 64111. The manager has been providing
investment advisory services to investment companies and institutional clients
since it was founded in 1958.

The manager supervises and manages the investment portfolio of the fund and
directs the purchase and sale of its investment securities. It utilizes teams of
portfolio managers, assistant portfolio managers and analysts acting together to
manage the assets of the fund. The teams meet regularly to review portfolio
holdings and to discuss purchase and sale activity. The teams adjust holdings in
the fund's portfolio as they deem appropriate in pursuit of the fund's
investment objective. Individual portfolio manager members of the team also may
adjust portfolio holdings of the fund as necessary between team meetings.

The portfolio manager members of the team managing the fund described in
this Prospectus and their work experience for the last five years are as
follows:

The activities of the manager are subject only to directions of the fund's
Board of Trustees. The manager pays all the expenses of the fund except
brokerage, taxes, portfolio insurance, interest, fees and expenses of the
non-interested person Trustees (including counsel fees), and extraordinary
expenses.

For the services provided to the fund, the manager receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category that are managed by the manager (the "Investment Category
Fee"). There are three investment categories: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the "Complex Fee"). The Investment

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 15

Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for the fund is an annual rate of 0.20% of the average net assets
of the fund. The Complex Fee is currently an annual rate of 0.30% of the average
net assets of the fund. Further information about the calculation of the annual
management fee is contained in the Statement of Additional Information.

On the first business day of each month, the fund pays a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for a fund by the
aggregate average daily closing value of a fund's net assets during the previous
month by a fraction, the numerator of which is the number of days in the
previous month and the denominator of which is 365 (366 in leap years).

CODE OF ETHICS

The fund and the manager have adopted a Code of Ethics that restricts
personal investing practices by employees of the manager and its affiliates.
Among other provisions, the Code of Ethics requires that employees with access
to information about the purchase or sale of securities in the fund's portfolio
obtain clearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of the fund
shareholders come before the interests of the people who manage those funds.

TRANSFER AND ADMINISTRATIVE SERVICES

American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111, acts as transfer agent and dividend-paying agent for the fund.
It provides facilities, equipment and personnel to the fund and is paid for such
services by the manager.

Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the fund as a funding medium, by broker-dealers and financial advisors
for their customers investing in shares of American Century, or by sponsors of
multi mutual fund no- or low-transaction fee programs. The manager or an
affiliate may enter into contracts to pay them for such recordkeeping and
administrative services out of its unified management fee.

Although there is no sales charge levied by the fund, transactions in shares
of the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or the
manager. You should be aware that these transactions may be made directly with
American Century without incurring such fees.

The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (ACC), which is controlled by James E. Stowers Jr.

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds, and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the manager out of its unified fee.

YEAR 2000 ISSUES

16 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

American Century's systems, renovate or replace noncompliant critical systems
and test those systems. In addition, the team has been working to gather
information about the Year 2000 efforts of the funds' other major service
providers. Although American Century believes its critical systems will function
properly in the Year 2000, this is not guaranteed. If the efforts of American
Century or its external service providers are not successful, the fund's
business, particularly its ability to provide shareholder services, may be
hampered.

In addition, the issuers of securities the fund owns could have Year 2000
computer problems. These problems could negatively affect the value of its
securities, which, in turn, could impact the fund's performance. The manager has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the manager may consider when making investment decisions, and other factors may
receive greater weight.

DISTRIBUTION OF FUND SHARES

The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly owned, indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund are processed by the transfer
agent, which is authorized to accept any instructions relating to fund accounts.
All purchase orders must be accepted by the distributor. All fees and expenses
of FDI in acting as distributor for the fund are paid by the manager.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

The fund is an individual series of the Trust, which issues shares with no
par value. The assets belonging to each series of shares are held separately by
the custodian and, in effect, each series is a separate fund.

Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of Trustees can elect all of the
Trustees if they choose to do so and, in such event, the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Trustees.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 17

TO CONTACT AMERICAN CENTURY BROKERAGE, INC.:

P.O. BOX 419146
KANSAS CITY, MISSOURI
64141-6146

BROKERAGE ASSOCIATE:
1-888-345-2071

TELESELECT AUTOMATED INFORMATION AND TRADING LINE:
1-888-345-2091

www.americancentury.com

TO CONTACT THE FUND:

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

FAX: 816-340-7962

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485

www.americancentury.com

[american century logo(reg.sm)]
American
Century(reg.sm)
---------------
Brokerage
---------

9808 [recycled logo]
BK-BKT-13064 Recycled
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

[american century logo(reg.sm)]
American
Century(reg.sm)

AUGUST 31, 1998

BENHAM
GROUP(reg.tm)

Arizona Intermediate-Term Municipal
Florida Municipal Money Market
Florida Intermediate-Term Municipal
New York Municipal Money Market
Tax-Free Money Market
Limited-Term Tax-Free
Intermediate-Term Tax-Free
Long-Term Tax-Free
High-Yield Municipal

STATEMENT OF ADDITIONAL INFORMATION

AUGUST 31, 1998

AMERICAN CENTURY MUNICIPAL TRUST

This Statement is not a prospectus but should be read in conjunction with the
funds' current Prospectus dated August 31, 1998. The funds' annual and
semiannual reports, which are dated May 31, 1998, and November 30, 1997,
respectively, are incorporated herein by reference. Please retain this document
for future reference. To obtain the Prospectus, call American Century
Investments toll-free at 1-800-345-2021 (international calls: 816-531-5575), or
write to P.O. Box 419200, Kansas City, Missouri 64141-6200.

TABLE OF CONTENTS

Investment Policies and Techniques ........................................ 2
Investment Restrictions ................................................... 11
Portfolio Transactions .................................................... 13
Valuation of Portfolio Securities ......................................... 13
Performance ............................................................... 14
Multiple Class Performance Advertising .................................... 16
Taxes ..................................................................... 16
About the Trust ........................................................... 17
Trustees and Officers ..................................................... 18
Management ................................................................ 20
Transfer and Administrative Services ...................................... 22
Distribution of Fund Shares ............................................... 22
Additional Purchase and Redemption Information ............................ 22
Other Information ......................................................... 24

NOTE: Throughout this document, Benham Arizona Intermediate-Term Municipal
Fund is referred to as the "Arizona Fund."

Benham Florida Municipal Money Market and Benham Florida Municipal
Intermediate-Term Funds are referred to as the "Florida Funds."

Benham Tax-Free Money Market, Benham Florida Municipal Money Market and
Benham New York Municipal Money Market Funds are referred to as the "Money
Market Funds." Finally, the remaining non-money market funds are referred to as
the "Variable-Price Funds."

STATEMENT OF ADDITIONAL INFORMATION 1

INVESTMENT POLICIES AND TECHNIQUES

The following pages provide a more detailed description of securities and
investment practices identified in the Prospectus. Unless otherwise noted, the
policies described in this Statement of Additional Information are not
fundamental and may be changed by the Board of Trustees.

MUNICIPAL NOTES

Municipal notes are issued by state and local governments or government
entities to provide short-term capital or to meet cash-flow needs.

TAX ANTICIPATION NOTES (TANS) are issued in anticipation of seasonal tax
revenues, such as ad valorem property, income, sales, use and business taxes,
and are payable from these future taxes. Tax anticipation notes usually are
general obligations of the issuer. General obligations are secured by the
issuer's pledge of its full faith and credit (i.e., taxing power) for the
payment of principal and interest.

REVENUE ANTICIPATION NOTES (RANS) are issued with the expectation that
receipt of future revenues, such as federal revenue-sharing or state aid
payments, will be used to repay the notes. Typically, these notes also
constitute general obligations of the issuer.

BOND ANTICIPATION NOTES (BANS) are issued to provide interim financing until
long-term financing can be arranged. In most cases, long-term bonds provide the
money for repayment of the notes.

TAX-EXEMPT COMMERCIAL PAPER is an obligation with a stated maturity of 365
days or less issued to finance seasonal cash-flow needs or to provide short-term
financing in anticipation of longer-term financing.

MUNICIPAL BONDS

Municipal bonds, which generally have maturities of more than one year when
issued, are designed to meet longer-term capital needs. These securities have
two principal classifications: general obligation bonds and revenue bonds.

GENERAL OBLIGATION (GO) BONDS are issued by states, counties, cities, towns
and regional districts to fund a variety of public projects, including
construction of and improvements to schools, highways, and water and sewer
systems. General obligation bonds are backed by the issuer's full faith and
credit, based on its ability to levy taxes for the timely payment of interest
and repayment of principal, although such levies may be constitutionally or
statutorily limited as to rate or amount.

REVENUE BONDS are not backed by an issuer's taxing authority; rather,
interest and principal are secured by the net revenues from a project or
facility. Revenue bonds are issued to finance a variety of capital projects,
including construction or refurbishment of utility and waste disposal systems,
highways, bridges, tunnels, air and sea port facilities, schools, and hospitals.
Many revenue bond issuers provide additional security in the form of a debt
service reserve fund that may be used to make payments of interest and
repayments of principal on the issuer's obligations. Some revenue bond
financings are further protected by a state's assurance (without obligation)
that it will make up deficiencies in the debt service reserve fund.

INDUSTRIAL DEVELOPMENT BONDS (IDBS), types of revenue bonds, are issued by
or on behalf of public authorities to finance privately operated facilities.
These bonds are used to finance business, manufacturing, housing, athletic and
pollution control projects as well as public facilities, such as mass transit
systems, air and sea port facilities, and parking garages. Payment of interest
and repayment of principal on an IDB depends solely on the ability of the
facility's user to meet its financial obligations and on the pledge, if any, of
the real or personal property financed. The interest earned on IDBs may be
subject to the federal alternative minimum tax.

VARIABLE- AND FLOATING-RATE DEMAND OBLIGATIONS

The funds may buy variable- and floating-rate demand obligations (VRDOs and
FRDOs). These obligations carry rights that permit holders to demand payment of
the unpaid principal, plus accrued interest, from the issuers or financial
intermediaries. Floating-rate instruments have interest rates that change
whenever there is a change in a designated base rate; variable-rate instruments
provide for a specified, periodic adjustment in the interest rate, which is
typically based on an index. These formulas are designed to result in a market
value for the VRDO or FRDO that approximates par value.

2 AMERICAN CENTURY INVESTMENTS

The Board of Trustees has approved investments in VRDOs and FRDOs on the
following conditions:

(1) The fund must have an unconditional right to demand the return of
principal plus accrued interest from the issuer on 30 days' notice or
less;

(2) Under the direction of the Board of Trustees, American Century Investment
Management, Inc. (the "manager") must determine that the issuer will be
able to make payment upon such demand, either from its own resources or
through an unqualified commitment (such as a letter of credit) from a
third party; and

(3) The rate of interest payable on the VRDO or FRDO must be calculated to
ensure that its market value will approximate par value on interest rate
adjustment dates.

OBLIGATIONS WITH TERM PUTS ATTACHED

Each fund may invest in fixed-rate bonds subject to third-party puts and in
participation interests in such bonds held by a bank in trust or otherwise.
These bonds and participation interests have tender options or demand features
that permit the funds to tender (or put) their bonds to an institution at
periodic intervals and to receive the principal amount thereof.

The manager expects that the funds will pay more for securities with puts
attached than for securities without these liquidity features. The manager may
buy securities with puts attached to keep a fund fully invested in municipal
securities while maintaining sufficient portfolio liquidity to meet redemption
requests or to facilitate management of the funds' investments. To ensure that
the interest on municipal securities subject to puts is tax-exempt to the funds,
the manager limits the funds' use of puts in accordance with applicable
interpretations and rulings of the Internal Revenue Service (IRS).

Because it is difficult to evaluate the likelihood of exercise or the
potential benefit of a put, puts normally will be determined to have a value of
zero, regardless of whether any direct or indirect consideration is paid.
Accordingly, puts as separate securities are not expected to affect the funds'
weighted average maturities. Where a fund has paid for a put, the cost will be
reflected as unrealized depreciation on the underlying security for the period
the put is held. Any gain on the sale of the underlying security will be reduced
by the cost of the put.

There is a risk that the seller of a put will not be able to repurchase the
underlying obligation when (or if) a fund attempts to exercise the put. To
minimize such risks, the funds will purchase obligations with puts attached only
from sellers deemed creditworthy by the manager under the direction of the Board
of Trustees.

TENDER OPTION BONDS

Tender option bonds (TOBs) are created by municipal bond dealers who
purchase long-term tax-exempt bonds in the secondary market, place the
certificates in trusts, and sell interests in the trusts with puts or other
liquidity guarantees attached. The credit quality of the resulting synthetic
short-term instrument is based on the guarantor's short-term rating and the
underlying bond's long-term rating.

There is some risk that a remarketing agent will renege on a tender option
agreement if the underlying bond is downgraded or defaults. Because of this, the
manager monitors the credit quality of bonds underlying the funds' TOB holdings
and intends to sell or put back any TOB if the rating on its underlying bond
falls below the second highest rating category designated by a nationally
recognized statistical rating agency (a "rating agency").

The manager also takes steps to minimize the risk that a fund may realize
taxable income as a result of holding TOBs. These steps may include
consideration of (a) legal opinions relating to the tax-exempt status of the
underlying municipal bonds, (b) legal opinions relating to the tax ownership of
the underlying bonds, and (c) other elements of the structure that could result
in taxable income or other adverse tax consequences.

After purchase, the manager monitors factors related to the tax-exempt
status of the fund's TOB holdings in order to minimize the risk of generating
taxable income.

TOBs were created to increase the supply of high-quality, short-term
tax-exempt obligations, and, thus, they are of particular interest to the Money
Market Funds. However, any of the funds may purchase these instruments. Each
fund (except High-Yield Municipal) limits its investments in TOBs to 20% of its
total assets.

STATEMENT OF ADDITIONAL INFORMATION 3

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

The funds may engage in securities transactions on a when-issued or forward
commitment basis in which the transaction price and yield are each fixed at the
time the commitment is made, but payment and delivery occur at a future date
(typically 15 to 45 days later).

When purchasing securities on a when-issued or forward commitment basis,
each fund assumes the rights and risks of ownership, including the risks of
price and yield fluctuations. Although a fund will make commitments to purchase
or sell securities with the intention of actually receiving or delivering them,
it may sell the securities before the settlement date if doing so is deemed
advisable as a matter of investment strategy.

In purchasing securities on a when-issued or forward commitment basis, a
fund will establish and maintain until the settlement date a segregated account
consisting of cash or appropriate liquid assets in an amount sufficient to meet
the purchase price. When the time comes to pay for the when-issued securities,
the fund will meet its obligations with available cash, through sales of
securities, or, although it would not normally expect to do so, by selling the
when-issued securities themselves (which may have a market value greater or less
than the fund's payment obligation). Selling securities to meet when-issued or
forward commitment obligations may generate taxable capital gains or losses.

ROLL TRANSACTIONS

A fund may sell a security and at the same time make a commitment to
purchase the same or a comparable security at a future date and specified price.
Conversely, a fund may purchase a security and at the same time make a
commitment to sell the same or a comparable security at a future date and
specified price. These types of transactions are executed simultaneously in what
are known as "dollar-roll," "cash and carry," or financing transactions. For
example, a broker-dealer may seek to purchase a particular security that a fund
owns. The fund will sell that security to the broker-dealer and simultaneously
enter into a forward commitment agreement to buy it back at a future date. This
type of transaction generates income for the fund if the dealer is willing to
execute the transaction at a favorable price in order to acquire a specific
security.

MUNICIPAL LEASE OBLIGATIONS

Each fund may invest in municipal lease obligations. These obligations,
which may take the form of a lease, an installment purchase or a conditional
sale contract, are issued by state and local governments and authorities to
acquire land and a wide variety of equipment and facilities. Generally, the
funds will not hold such obligations directly as lessors of the property but
will purchase a participation interest in a municipal lease obligation from a
bank or other third party.

Municipal leases frequently carry risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set forth
requirements that states and municipalities must meet to incur debt. These may
include voter referenda, interest rate limits or public sale requirements.
Leases, installment purchases or conditional sales contracts (which normally
provide for the title to the leased asset to pass to the government issuer) have
evolved as ways for government issuers to acquire property and equipment without
meeting constitutional and statutory requirements for the issuance of debt.

Many leases and contracts include nonappropriation clauses providing that
the governmental issuer has no obligation to make future payments under the
lease or contract unless money is appropriated for such purposes by the
appropriate legislative body on a yearly or other periodic basis. Municipal
lease obligations also may be subject to abatement risk. For example,
construction delays or destruction of a facility as a result of an uninsurable
disaster that prevents occupancy could result in all or a portion of a lease
payment not being made.

INVERSE FLOATERS (VARIABLE-PRICE FUNDS)

An inverse floater is a type of derivative that bears an interest rate that
moves inversely to market interest rates. As market interest rates rise, the
interest rate on an inverse floater goes down, and vice versa. Generally this is
accomplished by expressing the interest rate on the inverse floater as an
above-market fixed rate of interest, reduced by an amount determined by
reference to a market-based or bond-specific floating

4 AMERICAN CENTURY INVESTMENTS

interest rate (as well as by any fees associated with administering the inverse
floater program).

Inverse floaters may be issued in conjunction with an equal amount of Dutch
Auction floating-rate bonds (floaters), or a market-based index may be used to
set the interest rate on these securities. Floaters and inverse floaters may be
brought to market by a broker-dealer who purchases fixed-rate bonds and places
them in a trust or by an issuer seeking to reduce interest expenses by using a
floater/inverse floater structure in lieu of fixed-rate bonds.

In the case of a broker-dealer structured offering (where underlying
fixed-rate bonds have been placed in a trust), distributions from the underlying
bonds are allocated to floater and inverse floater holders in the following
manner:

(a) Floater holders receive interest based on rates set at a Dutch Auction,
which is typically held every 28 to 35 days. Current and prospective
floater holders bid the minimum interest rate that they are willing to
accept on the floaters, and the interest rate is set just high enough to
ensure that all of the floaters are sold.

(b) Inverse floater holders receive all of the interest that remains on the
underlying bonds after floater interest and auction fees are paid.

Procedures for determining the interest payment on floaters and inverse
floaters brought to market directly by the issuer are comparable, although the
interest paid on such inverse floaters is based on a presumed coupon rate that
would have been required to bring fixed-rate bonds to market at the time the
floaters and inverse floaters were issued.

Where inverse floaters are issued in conjunction with floaters, inverse
floater holders may be given the right to acquire the underlying security (or to
create a fixed-rate bond) by calling an equal amount of corresponding floaters.
The underlying security may then be held or sold. However, typically there are
time constraints and other limitations associated with any right to combine
interests and claim the underlying security.

Floater holders subject to a Dutch Auction procedure generally do not have
the right to "put back" their interests to the issuer or to a third party. If a
Dutch Auction fails, the floater holder may be required to hold its position
until the underlying bond matures, during which time interest on the floater is
capped at a predetermined rate.

The secondary market for floaters and inverse floaters may be limited. The
market value of inverse floaters tends to be significantly more volatile than
fixed-rate bonds because of the way interest payments are determined. The
interest rates on inverse floaters may be significantly reduced, even to zero,
if interest rates rise.

RESTRICTED SECURITIES

The funds may buy securities that are subject to restrictions on resale.
These securities will be deemed illiquid unless (a) the Board of Trustees
establishes guidelines for determining the liquidity of restricted securities
and (b) the securities (on a case-by-case basis) are determined to be liquid in
accordance with Board-approved guidelines.

SHORT-TERM INVESTMENTS (VARIABLE-PRICE FUNDS)

Under certain circumstances, the Variable-Price Funds may invest in
short-term municipal or U.S. government securities, including money market
instruments (short-term securities). Except as otherwise required for temporary
defensive purposes, the manager does not expect the funds' investments in
short-term securities to exceed 35% of total assets. If a fund invests in U.S.
government securities, a portion of dividends paid to shareholders will be
taxable at the federal level, and may be taxable at the state level, as ordinary
income. The manager intends to minimize such investments, however, and may allow
the funds to hold cash to avoid generating taxable dividends when suitable
short-term municipal securities are unavailable.

CONCENTRATION OF ASSETS IN OBLIGATIONS ISSUED TO FINANCE SIMILAR PROJECTS OR
FACILITIES

From time to time, a significant portion of a fund's assets may be invested
in municipal obligations related to the extent that economic, business or
political developments affecting one of these obligations could affect the other
obligations in a similar manner. For example, if a fund invested a significant
portion of its assets in utility bonds, and a state or federal governmental
agency or legislative body promulgated or enacted new environmental protection
requirements for utility providers, projects financed by utility bonds

STATEMENT OF ADDITIONAL INFORMATION 5

that a fund holds could suffer as a class. Additional financing might be
required to comply with the new environmental requirements, and outstanding debt
might be downgraded in the interim. Among other factors that could negatively
affect bonds issued to finance similar types of projects are state and federal
legislation regarding financing for municipal projects, pending court decisions
relating to the validity of or the means of financing municipal projects,
material or manpower shortages, and declining demand for the projects or
facilities financed by the municipal bonds.

FUTURES AND OPTIONS (VARIABLE-PRICE FUNDS)

Each Variable-Price Fund may enter into futures contracts, options, or
options on futures contracts. Some futures and options strategies, such as
selling futures, buying puts, and writing calls, hedge a fund's investments
against price fluctuations. Other strategies, such as buying futures, writing
puts, and buying calls, tend to increase market exposure. The funds do not use
futures and options transactions for speculative purposes.

Although other techniques may be used to control a fund's exposure to market
fluctuations, the use of futures contracts can be a more effective means of
hedging this exposure. While a fund pays brokerage commissions in connection
with opening and closing out futures positions, these costs are lower than
transaction costs incurred in the purchase and sale of the underlying
securities.

Futures contracts provide for the sale by one party and purchase by another
party of a specific security at a specified future time and price. Futures
contracts are traded on national futures exchanges. Futures exchanges and
trading are regulated under the Commodity Exchange Act by the Commodity Futures
Trading Commission (CFTC), a U.S. governmental agency. A fund may engage in
futures and options transactions based on securities indices, such as the Bond
Buyer Index of Municipal Bonds, that are consistent with that fund's investment
objectives. A fund also may engage in futures and options transactions based on
specific securities, such as U.S. Treasury bonds or notes.

Bond Buyer Municipal Bond Index futures contracts differ from traditional
futures contracts in that when delivery takes place, no bonds change hands.
Instead, these contracts settle in cash at the spot market value of the
Municipal Bond Index. Although other types of futures contracts, by their terms,
call for actual delivery or acceptance of the underlying securities, in most
cases the contracts are closed out before the settlement date. A futures
position may be closed by taking an opposite position in an identical contract
(i.e., buying a contract that has previously been sold or selling a contract
that has previously been bought).

To initiate and maintain an open position in a futures contract, a fund
would be required to make a good-faith margin deposit in cash or government
securities with a broker or custodian. A margin deposit is intended to ensure
completion of the contract (delivery or acceptance of the underlying security)
if it is not terminated prior to the specified delivery date. Minimum initial
margin requirements are established by the futures exchanges and may be revised.
In addition, brokers may establish margin deposit requirements that are higher
than the exchange minimums.

Once a futures contract position is opened, the value of the contract is
marked to market daily. If the futures contract price changes to the extent that
the margin on deposit does not satisfy margin requirements, the contract holder
is required to pay additional "variation" margin. Conversely, changes in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to or
from the broker for as long as the contract remains open and do not constitute
margin transactions for purposes of a fund's investment restrictions.

RISKS RELATED TO FUTURES AND OPTIONS TRANSACTIONS. Futures and options
prices can be volatile, and trading in these markets involves certain risks. If
the manager applies a hedge at an inappropriate time or judges interest rate
trends incorrectly, futures and options strategies may lower a fund's return. A
fund also could suffer losses if the prices of its futures and options positions
were poorly correlated with its other investments, or if it were unable to close
out its position because of an illiquid secondary market.

Futures contracts may be closed out only on an exchange that provides a
secondary market for these

6 AMERICAN CENTURY INVESTMENTS

contracts, and there is no assurance that a liquid secondary market will exist
for any particular futures contract at any particular time. Consequently, it
might not be possible to close a futures position when the manager considers it
appropriate or desirable to do so. In the event of adverse price movements, a
fund would be required to continue making daily cash payments to maintain its
required margin. If the fund had insufficient cash, it might have to sell
portfolio securities to meet daily margin requirements at a time when the
manager would not otherwise elect to do so. In addition, a fund may be required
to deliver or take delivery of instruments underlying the futures contracts it
holds. The manager will seek to minimize these risks by limiting the contracts
it enters into on behalf of the funds to those traded on national futures
exchanges and for which there appears to be a liquid secondary market.

A fund could suffer losses if the prices of its futures and options
positions were poorly correlated with its other investments or if securities
underlying futures contracts purchased by the fund had different maturities than
those of the portfolio securities being hedged. Such imperfect correlation may
give rise to circumstances in which the fund loses money on a futures contract
at the same time that it experiences a decline in the value of its hedged
portfolio securities. The fund also could lose margin payments it has deposited
with a margin broker if, for example, the broker becomes bankrupt.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of the trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. However, the daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses. In addition, the daily limit may prevent liquidation
of unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.

OPTIONS ON FUTURES. By purchasing an option on a futures contract, a fund
obtains the right, but not the obligation, to sell the futures contract (a put
option) or to buy the contract (a call option) at a fixed "strike" price. A fund
can terminate its position in a put option by allowing it to expire or by
exercising the option. If the option is exercised, the fund completes the sale
of the underlying security at the strike price. Purchasing an option on a
futures contract does not require a fund to make margin payments unless the
option is exercised.

Although they do not currently intend to do so, the funds may write (or
sell) call options that obligate them to sell (or deliver) the option's
underlying instrument upon exercise of the option. While the receipt of option
premiums would mitigate the effects of price declines, a fund would give up some
ability to participate in a price increase on the underlying security. If a fund
engages in options transactions, it would own the futures contract at the time a
call was written and would keep the contract open until the obligation to
deliver it pursuant to the call expired.

RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS. Each
Variable-Price Fund may enter into futures contracts, options, or options on
futures contracts, provided that such obligations represent no more than 20% of
the fund's net assets. Under the Commodity Exchange Act, a fund may enter into
futures and options transactions (a) for hedging purposes without regard to the
percentage of assets committed to initial margin and option premiums or (b) for
other-than-hedging purposes, provided that assets committed to initial margin
and option premiums do not exceed 5% of the fund's net assets. To the extent
required by law, each fund will set aside cash or appropriate liquid assets in a
segregated account to cover its obligations related to futures contracts and
options.

OTHER INVESTMENT COMPANIES

Each of the funds may invest up to 5% of its total assets in any money
market fund, including those advised by the manager, provided that the
investment is consistent with the fund's investment policies and restrictions.
Under the Investment Company Act of 1940 (the "Investment Company Act"), the
fund's investment in such securities, subject to certain exceptions, currently
is limited to (a) 3% of the total

STATEMENT OF ADDITIONAL INFORMATION 7

voting stock of any one investment company, (b) 5% of the fund's total assets
with respect to any one investment company, and (c) 10% of the fund's total
assets in the aggregate. Such purchases will be made in the open market where no
commission or profit to a sponsor or dealer results from the purchase other than
the customary brokers' commissions. As a shareholder of another investment
company, a fund would bear, along with other shareholders, its pro rata portion
of the other investment company's expenses, including advisory fees. These
expenses would be in addition to the management fee that each fund bears
directly in connection with its own operations.

SPECIAL CONSIDERATIONS REGARDING ARIZONA MUNICIPAL SECURITIES

As briefly discussed in the Prospectus, the Arizona Fund is susceptible to
political, economic and regulatory events that affect issuers of Arizona
municipal obligations. The following information about risk factors is provided
in view of the Arizona Fund's policy of concentrating its assets in Arizona
municipal securities. This information is based on certain official statements
of the state of Arizona published in connection with the issuance of specific
Arizona municipal securities as well as from other publicly available sources.
It does not constitute a complete description of the risk associated with
investing in securities of these issuers. While the manager has not
independently verified the information contained in the official statements, it
has no reason to believe the information is inaccurate.

Located in the country's sunbelt, Arizona has been, and is projected to
continue to be, one of the faster growing areas in the United States. Over the
last several decades, the state has outpaced most other regions of the country
in population and personal income growth, gross state product, and job creation.

Geographically, Arizona is the nation's sixth largest state in terms of
area. It is divided into three distinct topographic regions: the northern third,
which is high plateau country traversed by deep canyons, such as Grand Canyon
National Park; central Arizona, which is rugged, mountainous, and heavily
forested; and the southern third, which encompasses desert areas and flat,
fertile agricultural lands in valleys between mountains rich in mineral
deposits. These topographic areas all have different climates, which have
distinctively influenced development in each region. Land ownership is vested
largely in the federal and state governments: 32% is owned by the federal
government, 28% is held as Federal Trust Land (Indian), 17% is in private
ownership, and 13% is held by the state, leaving approximately 10% held in other
categories.

The Arizona economy continues to diversify away from its historical reliance
on the mining and agricultural employment sectors. Significant job growth has
occurred in the areas of aerospace and high technology, construction, finance,
insurance, and real estate. Arizona's economy has continued to grow in recent
years, as it is among the fastest growing states in the nation.

Under its constitution, the state of Arizona is not permitted to issue
general obligation bonds secured by the full faith and credit of the state.
However, certain agencies and instrumentalities of the state are authorized to
issue bonds secured by revenues from specific projects and activities, and the
state and local governmental units may enter into lease transactions. The
particular source of payments and security for an Arizona municipal obligation
is detailed in the instruments themselves and in related offering materials.

The state and local governmental units are subject to limitations imposed by
Arizona law with respect to ad valorem taxation, bonded indebtedness, the amount
of annual increases in taxes, and other matters. These limitations may affect
the ability of the issuers to generate revenues to satisfy their debt
obligations. There are periodic attempts in the form of voter initiatives and
legislative proposals to further limit the amount of annual increases in taxes
that may be levied without voter approval. If such a proposal were enacted,
there might be an adverse impact on state or local government financing.

Arizona is required by law to maintain a balanced budget. In the past, the
state has used a combination of spending reductions and tax increases to avoid
potential budgetary shortfalls and may be required to do so again in the future.

SPECIAL CONSIDERATIONS REGARDING FLORIDA MUNICIPAL SECURITIES

As briefly discussed in the Prospectus, the Florida Funds are susceptible to
political, economic and regu-

8 AMERICAN CENTURY INVESTMENTS

latory events that affect issuers of Florida municipal obligations. The
following information about risk factors is provided in view of the Florida
Funds' policies of concentrating their assets in Florida municipal securities.
This information is based on independent municipal credit reports relating to
securities offerings of Florida issuers and other publicly available sources. It
does not constitute a complete description of the risk associated with investing
in securities of these issuers. While the manager has not independently verified
this information, it has no reason to believe the information is inaccurate.

Because the Florida Funds invest primarily in Florida municipal securities,
they will be affected by political and economic conditions and developments
within the state of Florida. In general, the credit quality and credit risk of
any issuer's debt depend on the state and local economy, the health of the
issuer's finances, the amount of the issuer's debt, the quality of management,
and the strength of legal provisions in debt documents that protect debt
holders. Credit risk is usually lower whenever the economy is strong, growing
and diversified, financial operations are sound, and the debt burden is
reasonable.

The state of Florida's economy is characterized by a large service sector, a
dependence on the tourism and construction industries, and a large retirement
population. The management of rapid growth has been the major challenge facing
state and local governments. Florida's population has grown rapidly and is now
the fourth largest state; this growth is expected to continue, but at reduced
rates. The retiree component is expected to continue to be a major factor. As
this growth continues, particularly within the retirement population, the demand
for both public and private services will increase, which may strain the service
sector's capacity and impede the state's budget balancing efforts.

In recent years, the Florida economy has been transforming from a narrow
base of agriculture and seasonal tourism into a service and trade economy, with
substantial insurance, banking and export participation as well as greater
year-round attraction. The outlook for the Florida economy is continued
expansion fueled by population growth but at a slower rate than that of the
1980s.

Debt levels in the state of Florida are moderate to high, reflecting the
tremendous capital demands associated with rapid population growth. Florida is
unusual among states in that all general obligation full faith and credit debt
issues of municipalities must be approved by public referendum and are,
therefore, relatively rare. Most debt instruments issued by local municipalities
and authorities have a narrower pledge of security, such as a sales tax stream,
special assessment revenue, user fees, utility taxes or fuel taxes. Credit
quality of such debt instruments tends to be somewhat lower than that of general
obligation debt. The state of Florida issues general obligation debt for a
variety of purposes; however, the state constitution requires a specific revenue
stream to be pledged to state general obligation bonds as well.

The state of Florida is heavily dependent upon sales tax, which makes the
state's general fund vulnerable to recession and presents difficulties in
expanding the tax base in an economy increasingly geared to services. This
dependence upon sales tax, combined with economic recession, has resulted in
budgetary shortfalls in the past; Florida has reacted to preserve an adequate
financial position primarily through expenditure reductions. State officials,
however, still face tremendous capital and operating pressures due to the growth
that will continue to strain the state's narrow revenue base. Future budgets may
require a wider revenue base to meet such demands; the most likely candidate for
such revenue enhancement is a tax on consumer services. The creation of a
Florida personal income tax is a remote possibility because it would require an
amendment to the state's constitution. However, there can be no assurance that a
personal income tax will not be implemented in the future. If such a tax were to
be imposed, there is no assurance that interest earned on Florida municipal
obligations would be exempt from this tax.

SPECIAL CONSIDERATIONS REGARDING NEW YORK MUNICIPAL SECURITIES

As briefly discussed in the Prospectus, New York Municipal Money Market is
susceptible to political, economic and regulatory events that affect issuers of
New York municipal obligations. The following information about risk factors is
provided in view of the fund's policies of concentrating its investments in

STATEMENT OF ADDITIONAL INFORMATION 9

New York municipal securities. This information is based on independent
municipal credit reports relating to securities offerings of New York issuers
and other publicly available sources. It does not constitute a complete
description of the risk associated with investing in securities of these
issuers. While the manager has not independently verified this information, it
has no reason to believe the information is inaccurate.

The fund's concentration in the debt obligations of one state carries a
higher risk than a portfolio that is geographically diversified. In addition to
state general obligation bonds and notes and the debt of various state agencies,
the fund will invest in local bond issues, lease obligations and revenue bonds,
the credit quality and risk of which will vary according to each security's own
structure and underlying economics.

The fund's ability to maintain a high level of "triple-tax-free" income is
primarily dependent upon the ability of New York issuers to continue to meet
debt service obligations in a timely fashion. In 1975 the State, New York City
and other related issuers experienced serious financial difficulties that
ultimately resulted in much lower credit ratings and loss of access to the
public debt markets. A series of fiscal reforms and an improved economic climate
allowed these entities to return to financial stability by the early 1980s.
Credit ratings were reinstated or raised and access to the public credit markets
was restored. During the early 1990s, the State and City confronted renewed
fiscal pressure, as the region suffered moderate economic decline. Conditions
began to improve in 1993, though below-average economic performance and tight
budgetary conditions persist. Both entities experienced financial relief in
fiscal 1997 because of the strong national economy, a robust financial services
sector and vigilant spending control. The State and City continue to face
challenging budgets while they attempt to adjust spending levels and priorities.

SPECIAL CONSIDERATIONS REGARDING PUERTO RICO MUNICIPAL SECURITIES

From time to time the funds invest in obligations of the Commonwealth of
Puerto Rico and its public corporations which are exempt from federal, state,
and city or local income taxes. The majority of the Commonwealth's debt is
issued by the major public agencies that are responsible for many of the
island's public functions, such as water, wastewater, highways,
telecommunications, education and public construction. As of December 31, 1996,
public sector debt issued by the Commonwealth and its public corporations
totaled $18.4 billion.

Since the 1980s, Puerto Rico's economy and financial operations have
paralleled the economic cycles of the United States. The island's economy,
particularly the manufacturing sector, has experienced substantial gains in
employment. Much of these economic gains are attributable in part to favorable
treatment under Section 936 of the federal Internal Revenue Code for U.S.
corporations doing business in Puerto Rico. The number of persons employed in
Puerto Rico during fiscal 1994 averaged 1 million persons -- a record level.
Unemployment, however, still remains high at 13.8 percent.

Debt ratios for the Commonwealth are high as it assumes much of the
responsibility for local infrastructure. Sizable infrastructure programs are
ongoing to upgrade the island's water, sewer and road systems. The
Commonwealth's general obligation debt is secured by a first lien on all
available revenues. The Commonwealth has maintained a fiscal policy, which seeks
to correlate the growth in public sector debt to the growth of the economic base
available to service that debt. Between fiscal years 1992 and 1996, debt
increased 27.5% while gross product rose 27.7%. Short-term debt remains a modest
13% of total debt outstanding as of December 31, 1996. The maximum annual debt
service requirement on Commonwealth general obligation debt totaled 8.7% of
governmental revenues for fiscal 1997. This is well below the 15% limit imposed
by the Constitution of Puerto Rico.

After recording three years of positive operating results from 1989 to 1991,
the Commonwealth's General Fund moved into a deficit position, with a $62
million cash deficit for fiscal 1992 and a $116 million deficit for fiscal 1993.
The fiscal 1994 budget was balanced with an increase in the "tollgate" tax on
Section 936 companies and improved revenue collections, which enabled the
Commonwealth to record a strong turnaround in the General Fund balance to $309
million (6.8% of General Fund expenses). A General Fund unreserved balance of
$171 million was recorded for the end of fiscal year 1996.

10 AMERICAN CENTURY INVESTMENTS

The Commonwealth's economy remains vulnerable to changes in oil prices,
American trade, foreign policy and levels of federal assistance. Per-capita
income levels, while being the highest in the Caribbean, lag far behind the
United States. In November 1993, the voters of Puerto Rico were asked in a
non-binding referendum to consider the options of statehood, continued
Commonwealth status or independence. Of the 48.4% of the voters who favored
continuation of Commonwealth status, 46.2% were for statehood, and 4.4% were for
independence. In February 1997, legislation was introduced in Congress proposing
a mechanism to permanently settle the political relationship with the United
States.

For many years, U.S. companies operating in Puerto Rico were eligible to
receive a special tax credit available under Section 936 of the federal tax
code, which helped spur significant expansion in capital-intensive manufacturing
activity. Federal tax legislation was passed in 1993, which revised the tax
benefits received by U.S. corporations (Section 936 firms) that operate
manufacturing facilities in Puerto Rico. The legislation provides these firms
with two options: a five-year phased reduction of the income-based tax credit to
40% of the previously allowable credit or the conversion to a wage-based
standard, allowing a tax credit for the first 60% of qualified compensation paid
to employees as defined in the IRS Code. Studies indicate that there have been
no reductions in the economic growth rate or employment in industries that were
expected to be impacted by the 1993 amendments. In 1996, amendments were signed
into law to phase out the tax credit over a 10-year period for existing
claimants and to eliminate it for corporations without established operations
after October 1995. At present, it is difficult to forecast what the short- and
long-term effects of a phase-out of the Section 936 credit would have on the
economy of Puerto Rico.

A final risk factor with the Commonwealth is the large amount of unfunded
pension liabilities. The two main public pension systems are largely
underfunded. The employees' retirement system has a funded ratio of 19% and an
unfunded liability of $5.0 billion. The teachers' retirement system has a funded
ratio of 56% and an unfunded liability of $1.1 billion. A measure enacted by the
legislature in 1990 is designed to address the solvency of the plans over a
50-year period.

INVESTMENT RESTRICTIONS

The funds' investment restrictions are set forth below. These investment
restrictions are fundamental and may not be changed without approval of "a
majority of the outstanding votes of shareholders" of a fund, as determined in
accordance with the Investment Company Act.

AS A FUNDAMENTAL POLICY, EACH FUND:

1) shall not issue senior securities, except as permitted under the Investment
Company Act of 1940.

2) shall not borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount not
exceeding 331/3% of the fund's total assets (including the amount borrowed)
less liabilities (other than borrowings).

3) shall not lend any security or make any other loan if, as a result, more
than 331/3% of the fund's total assets would be lent to other parties,
except (i) through the purchase of debt securities in accordance with its
investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.

4) shall not purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments. This policy shall not prevent
the fund from investment in securities or other instruments backed by real
estate or securities of companies that deal in real estate or are engaged
in the real estate business.

5) shall not concentrate its investments in securities of issuers in a
particular industry (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities).

6) shall not act as an underwriter of securities issued by others, except to
the extent that the fund may be considered an underwriter within the
meaning of the Securities Act of 1933 in the disposition of restricted
securities.

7) shall not purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments, provided that this
limitation shall not prohibit the fund from

STATEMENT OF ADDITIONAL INFORMATION 11

purchasing or selling options and futures contracts or from investing in
securities or other instruments backed by physical commodities.

In addition, the funds are subject to the following additional investment
restrictions, which are not fundamental and may be changed by the Board of
Trustees.

AS AN OPERATING POLICY, EACH FUND:

a) [Arizona, Florida Funds, New York and High-Yield Municipal only] shall meet
federal tax requirements for qualification as a "regulated investment
company," and shall limit its investment so that at the close of each
quarter of its taxable year: (i) with regard to at least 50% of total
assets, no more than 5% of total assets are invested in the securities of a
single issuer, and (ii) no more than 25% of total assets are invested in
the securities of a single issuer. Limitations (i) and (ii) do not apply to
"government securities" as defined for federal tax purposes. Each fund does
not, with respect to 75% of its total assets, currently intend to purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result thereof, the fund would own more than 10% or the outstanding voting
securities of such issuer.

b) shall not purchase additional investment securities at any time during
which outstanding borrowings exceed 5% of the total assets of the fund.

c) [Money Market Funds only] shall not purchase or sell futures contracts or
call options. This limitation does not apply to options attached to, or
acquired or traded together with, their underlying securities, and does not
apply to securities that incorporate features similar to options or futures
contracts.

d) shall not purchase any security or enter into a repurchase agreement if, as
a result, more than 15% of its net assets (10% for the Money Market Funds)
would be invested in repurchase agreements not entitling the holder to
payment of principal and interest within seven days and in securities that
are illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.

e) shall not sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short, and
provided that transactions in futures contracts and options are not deemed
to constitute selling securities short.

f) shall not purchase securities on margin, except that the fund may obtain
such short-term credits as are necessary for the clearance of transactions,
and provided that margin payments in connection with futures contracts and
options on futures contracts shall not constitute purchasing securities on
margin.

For purposes of the investment restriction (5), relating to concentration, a
fund shall not purchase any securities that would cause 25% or more of the value
of the fund's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business activities
in the same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments, (b) wholly owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents, (c)
utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, and electric and telephone will each be
considered a separate industry, and (d) personal credit and business credit
businesses will be considered separate industries.

Municipal securities issued to finance non-governmental business activities
generally are not deemed to be exempt from taxation under federal law. As a
result, these securities, if purchased, will be subject to the prohibition in
investment restriction (5) against concentrating in an industry. Conversely,
municipal securities, which are exempt from taxation under federal law,
regardless of issuer, will not be considered as part of any industry and will
not be subject to investment restriction (5).

Unless otherwise indicated, with the exception of the percentage limitation
on borrowing, percentage

12 AMERICAN CENTURY INVESTMENTS

limitations included in the restrictions apply at the time transactions are
entered into. Accordingly, any later increase or decrease beyond the specified
limitation resulting from a change in the fund's net assets will not be
considered in determining whether it has complied with its investment
restrictions.

Except as described above, for purposes of the funds' investment
restrictions, the party identified as the "issuer" of a municipal security
depends on the form and conditions of the security. When the assets and revenues
of a political subdivision are separate from those of the government that
created the subdivision and only the assets and revenues of the subdivision back
the security, the subdivision is deemed the sole issuer. Similarly, in the case
of an IDB, if only the assets and revenues of a nongovernmental user back the
bond, the nongovernmental user would be deemed the sole issuer. If, in either
case, the creating government or some other entity guarantees the security, the
guarantee would be considered a separate security and would be treated as an
issue of the guaranteeing entity.

PORTFOLIO TRANSACTIONS

The manager invests each fund's assets in a manner consistent with the
fund's investment objectives, policies and restrictions, and with any
instructions the Board of Trustees may issue from time to time. Within this
framework, the manager is responsible for making all determinations as to the
purchase and sale of portfolio securities and for taking all steps necessary to
implement securities transactions on behalf of the funds.

In placing orders for the purchase and sale of portfolio securities, the
manager will use its best efforts to obtain the best possible price and
execution and will otherwise place orders with broker-dealers subject to and in
accordance with any instructions the Board of Trustees may issue from time to
time. The manager will select broker-dealers to execute portfolio transactions
on behalf of the funds solely on the basis of best price and execution. The
funds paid no brokerage commissions during the fiscal year ended May 31, 1998.

The portfolio turnover rates for each of the Variable-Price Funds appear in
the financial information section of the Prospectuses. Because a higher turnover
rate increases transaction costs and may increase taxable capital gains, the
manager carefully weighs the potential benefits of short-term investing against
these considerations.

VALUATION OF PORTFOLIO SECURITIES

Each fund's net asset value per share ("NAV") is calculated as of the close
of business of the New York Stock Exchange (the "Exchange"), usually at 3 p.m.
Central time each day the Exchange is open for business. The Exchange has
designated the following holiday closings for 1998: New Year's Day (observed),
Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas (observed). Although the
funds expect the same holiday schedule to be observed in the future, the
Exchange may modify its holiday schedule at any time.

Each fund's share price is calculated by adding the value of all portfolio
securities and other assets, deducting liabilities, and dividing the result by
the number of shares outstanding. Expenses and interest earned on portfolio
securities are accrued daily.

MONEY MARKET FUNDS. Securities held by the Money Market Funds are valued at
amortized cost. This method involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium paid at the time of purchase. Although this method provides certainty in
valuation, it generally disregards the effect of fluctuating interest rates on
an instrument's market value. Consequently, the instrument's amortized cost
value may be higher or lower than its market value, and this discrepancy may be
reflected in the fund's yield. During periods of declining interest rates, for
example, the daily yield on fund shares computed as described above may be
higher than that of a fund with identical investments priced at market value.
The converse would apply in a period of rising interest rates.

The amortized cost valuation method is permitted in accordance with Rule
2a-7 under the Investment Company Act. Under the Rule, a fund holding itself out
as a money market fund must adhere to certain quality and maturity criteria,
which are described in the Prospectus.

Each Money Market Fund operates pursuant to Investment Company Act Rule
2a-7, which permits valuation of portfolio securities on the basis of amortized
cost. As required by the Rule, the Board of

STATEMENT OF ADDITIONAL INFORMATION 13

Trustees has adopted procedures designed to stabilize, to the extent reasonably
possible, each fund's price per share as computed for the purpose of sales and
redemptions at $1.00. While the day-to-day operation of each fund has been
delegated to the manager, the quality requirements established by the procedures
limit investments to certain instruments that the Board of Trustees has
determined present minimal credit risks and that have been rated in one of the
two highest rating categories as determined by a rating agency or, in the case
of an unrated security, of comparable quality. The procedures require review of
each fund's portfolio holdings at such intervals as are reasonable in light of
current market conditions to determine whether the fund's net asset value
calculated by using available market quotations deviates from the per-share
value based on amortized cost. The procedures also prescribe the action to be
taken if such deviation should occur.

VARIABLE-PRICE FUNDS. Most securities held by the Variable-Price Funds are
priced by an independent pricing service, provided that such prices are believed
by the manager to reflect the fair market value of portfolio securities. Because
there are hundreds of thousands of municipal issues outstanding, and the
majority of them do not trade daily, the prices provided by pricing services
generally are determined without regard to bid or last sale prices. In valuing
securities, the pricing services take into account institutional trading
activity, trading in similar groups of securities, and any developments related
to specific securities. The methods used by the pricing service and the
valuations so established are reviewed by the manager under the general
supervision of the Board of Trustees. There are a number of pricing services
available, and the manager, on the basis of ongoing evaluation of these
services, may use other pricing services or discontinue the use of any pricing
service in whole or in part.

Securities not priced by a pricing service are valued at the mean between
the most recently quoted bid and asked prices provided by broker-dealers. The
municipal bond market is typically a "dealer market"; that is, dealers buy and
sell bonds for their own accounts rather than for customers. As a result, the
spread, or difference between bid and asked prices, for certain municipal bonds
may differ substantially among broker-dealers.

Securities maturing within 60 days of the valuation date may be valued at
amortized cost, which is plus or minus any amortized discount or premium, unless
the Trustees determine that this would not result in fair valuation of a given
security. Other assets and securities for which quotations are not readily
available are valued in good faith at their fair market value using methods
approved by the Board of Trustees.

PERFORMANCE

A fund may quote performance in various ways. Historical performance
information will be used in advertising and sales literature and is not
indicative of future results. A fund's share price, yield and return will vary
with changing market conditions.

For the MONEY MARKET FUNDS, yield quotations are based on the change in the
value of a hypothetical investment (excluding realized gains and losses from the
sale of securities and unrealized appreciation and depreciation of securities)
over a seven-day period (base period) and stated as a percentage of the
investment at the start of the base period (base-period return). The base-period
return is then compounded by adding 1, raising the sum to a power equal to 365
divided by 7, and subtracting 1 from the result.

Calculations of effective yield begin with the same base-period return used
to calculate yield, but the return is then annualized to reflect weekly
compounding according to the following formula:

Effective Yield = [(Base-Period Return + 1)(365/7)] - 1

Each Money Market Fund's yield and effective yield for the seven-day period
ended May 31, 1998, are listed in the following table:

Fund 7-Day Yield 7-Day Effective Yield
- --------------------------------------------------------------------------------

Tax-Free Money Market 3.90% 3.98%

Florida Municipal Money Market 3.26% 3.31%

New York Municipal Money Market N/A N/A
- --------------------------------------------------------------------------------

For the VARIABLE-PRICE FUNDS, yield quotations are based on the investment
income per share earned during a given 30-day period, less expenses accrued
during the period (net investment income), and are computed by dividing a fund's
net investment income

14 AMERICAN CENTURY INVESTMENTS

by its share price on the last day of the period, according to the following
formula:

YIELD = 2 [(a - b + 1)(6) - 1]
-------
cd

where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of reimbursements), c = the average daily number of shares
outstanding during the period that were entitled to receive dividends, and d =
the maximum offering price per share on the last day of the period.

The funds' yields for the 30-day period ended May 31, 1998, are listed in
the following table:

Fund 30-Day Yield
- --------------------------------------------------------------------------------
Arizona Fund 3.98%

Florida Intermediate-Term 3.96%

Limited-Term Tax-Free 3.67%

Intermediate-Term Tax-Free 4.00%

Long-Term Tax-Free 4.33%

High-Yield Municipal 5.31%
- --------------------------------------------------------------------------------

Total returns quoted in advertising and sales literature reflect all aspects
of a fund's return, including the effect of reinvesting dividends and capital
gains distributions, if any, and any change in the fund's NAV during the period.

Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical, historical investment in a fund over a
stated period and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline in value
had been constant throughout the period. For example, a cumulative total return
of 100% over 10 years would produce an average annual total return of 7.18%,
which is the steady annual rate that would result in 100% growth on a compounded
basis in 10 years. While average annual total returns are a convenient means of
comparing investment alternatives, investors should realize that a fund's
performance is not constant over time but changes from year to year and that
average annual total returns represent averaged figures as opposed to actual
year to year performance.

The funds' average annual total returns for the one-year, five-year, 10-year
and life-of-fund periods are indicated in the following table.

Period Ended May 31, 1998
--------------------------------------------------

Fund One-Year Five-Years 10-Years Life of Fund
- -------------------------------------------------------------------------------

Arizona Intermediate-Term(1) 7.19% N/A N/A 6.57%

Florida Money Market(1) 3.31% N/A N/A 3.58%

Florida Intermediate-Term(1) 8.20% N/A N/A 6.84%

Tax-Free Money Market(2) 3.70% 2.94% 3.69% 3.99%

Limited-Term Tax-Free(3) 5.79% 4.57% N/A 4.50%

Intermediate-Term Tax-Free(4) 7.60% 5.54% 6.45% 6.03%

Long-Term Tax-Free(4) 9.58% 6.55% 8.07% 7.27%

High-Yield Municipal(5) N/A N/A N/A 1.81%
- -------------------------------------------------------------------------------

(1)Commenced operations on April 11, 1994.

(2)Commenced operations on July 31, 1984.

(3)Commenced operations on March 1, 1993.

(4)Commenced operations on March 2, 1987.

(5)Commenced operations on March 31, 1998.

In addition to average annual total returns, each fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total returns may
be quoted as a percentage or as a dollar amount and may be calculated for a
single investment, a series of investments or a series of redemptions over any
time period. Total returns may be broken down into their components of income
and capital (including capital gains and changes in share price) to illustrate
the relationship of these factors and their contributions to total return.
Performance information may be quoted numerically or in a table, graph or
similar illustration.

Each fund also may quote tax-equivalent yields, which show the taxable
yields an investor would have to earn before taxes to equal the fund's tax-free
yields. As a prospective investor in the funds, you should determine whether
your tax-equivalent yield is likely to be higher with a taxable or with a
tax-exempt fund. To determine this, you may use the formula depicted below.

You can calculate your tax-equivalent yield for a fund (taking into account
only federal income tax and not any applicable state taxes) using the following
equation:

Fund's Tax-Free Yield Your Tax-
----------------------- = Equivalent
100% - Federal Tax Rate Yield

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indices of

STATEMENT OF ADDITIONAL INFORMATION 15

market performance. Sources of economic data that may be used for such
comparisons may include, but are not limited to: U.S. Treasury bill, note and
bond yields; money market fund yields; U.S. government debt and percentage of
debt held by foreigners; the U.S. money supply; net free reserves; yields on
current-coupon GNMAs (source: Board of Governors of the Federal Reserve System);
the federal funds and discount rates (source: Federal Reserve Bank of New York);
yield curves for U.S. Treasury securities and AA/AAA-rated corporate securities
(source: Bloomberg Financial Markets); yield curves for AAA-rated, tax-free
municipal securities (source: Telerate); yield curves for foreign government
securities (sources: Bloomberg Financial Markets and Data Resources, Inc.);
total returns on foreign bonds (source: J.P. Morgan Securities Inc.); various
U.S. and foreign government reports; the junk bond market (source: Data
Resources, Inc.); the CRB Futures Index (source: Commodity Index Report); the
price of gold (sources: London a.m./p.m. fixing and New York Comex Spot Price);
rankings of any mutual fund or mutual fund category tracked by Lipper Analytical
Services, Inc. or Morningstar, Inc.; mutual fund rankings published in major
nationally distributed periodicals; data provided by the Investment Company
Institute; Ibbotson Associates, Stocks, Bonds, Bills, and Inflation; major
indices of stock market performance; and indices and historical data supplied by
major securities brokerage or investment advisory firms. The funds also may
utilize reprints from newspapers and magazines furnished by third parties to
illustrate historical performance.

MULTIPLE CLASS PERFORMANCE ADVERTISING

Pursuant to the Multiple Class Plan, the funds may issue additional classes
of existing funds or introduce new funds with multiple classes available for
purchase. To the extent a new class is added to an existing fund, the manager
may, in compliance with SEC and NASD rules, regulations and guidelines, market
the new class of shares using the historical performance information of the
original class of shares. When quoting performance information for the new class
of shares for periods prior to the first full quarter after inception, the
original class's performance will be restated to reflect the expenses of the new
class. For periods after the first full quarter after inception, actual
performance of the new class will be used.

TAXES

INDUSTRIAL DEVELOPMENT BONDS

Interest on certain types of industrial development bonds is subject to
federal income tax when received by "substantial users" or persons related to
substantial users as defined in the Code. The term "substantial user" includes
any "nonexempt person" who regularly uses in trade or business part of a
facility financed from the proceeds of industrial development bonds. The funds
may invest periodically in industrial development bonds and, therefore, may not
be appropriate investments for entities that are substantial users of facilities
financed by industrial development bonds or "related persons" of substantial
users. Generally, an individual will not be a related person of a substantial
user under the Code unless he/she or his/her immediate family (spouse, brothers,
sisters, and lineal descendants) owns directly or indirectly in aggregate more
than 50% of the equity value of the substantial user.

SECTION 1256 CONTRACTS

Certain options, futures contracts, and forward contracts in which the funds
may invest are "Section 1256 contracts." Gains or losses on Section 1256
contracts generally are considered 60% long-term (20% rate gain/loss) and 40%
short-term capital gains or losses (60-40). Also, Section 1256 contracts held by
a fund at the end of each taxable year (and, in some cases, for purposes of the
4% excise tax, on October 31 of each year) are marked to market with the result
that unrealized gains or losses are treated as though they were realized for tax
reporting purposes.

HEDGING

The hedging transactions undertaken by the funds may result in straddles for
federal income tax purposes. The straddle rules may affect the character of
gains (or losses) realized by a fund. In addition, losses realized by a fund on
positions that are part of a straddle may be deferred under the straddle rules,
rather than taken into account in calculating the taxable income for the taxable
year in which such losses are realized. The hedging transactions may increase
the amount of

16 AMERICAN CENTURY INVESTMENTS

short-term capital gains realized by the funds, which are taxed as ordinary
income when distributed to shareholders.

Each fund may make one or more of the elections available under the Code
that are applicable to straddles. If a fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the elections made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.

Because application of the straddle rules may affect the character of gains
or losses, defer losses, and/or accelerate the recognition of gains or losses
from the affected straddle positions, the amount that must be distributed to
shareholders and that will be taxed to shareholders as ordinary income or as a
long-term capital gain may be increased or decreased substantially as compared
to a fund that did not engage in such hedging transactions.

OPINIONS

Opinions relating to the tax status of interest derived from individual
municipal securities are rendered by bond counsel to the issuer. The funds, the
investment manager and the funds' counsel do not review the proceedings relating
to the issuance of state or municipal securities on the basis of bond counsel
opinions.

GENERAL

From time to time, proposals have been introduced in Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on municipal securities, and similar proposals may be introduced in the
future. If such a proposal were enacted, the availability of municipal
securities for investment by the funds and the funds' NAVs would be adversely
affected. Under these circumstances, the Board of Trustees would re-evaluate the
funds' investment objectives and policies and would consider either changes in
the structure of the Trust or its dissolution.

The preceding information is only a summary of some of the tax
considerations affecting the funds and their shareholders. No attempt has been
made to discuss individual tax consequences. To determine whether a fund is a
suitable investment, a prospective investor may wish to consult a tax advisor
regarding his or her situation.

ABOUT THE TRUST

American Century Municipal Trust (the "Trust") is a registered, open-end
management investment company that was organized as a Massachusetts business
trust on May 1, 1984 (the Trust was formerly known as "Benham Municipal Trust"
and "Benham National Tax-Free Trust"). Currently, there are nine series of the
Trust: American Century-Benham Arizona Intermediate-Term Municipal Fund
(formerly known as "Benham Arizona Municipal Intermediate-Term Fund"), American
Century-Benham Florida Municipal Money Market Fund (formerly known as "Benham
Florida Municipal Money Market Fund"), American Century-Benham Florida
Intermediate-Term Municipal Fund (formerly known as "Benham Florida Municipal
Intermediate-Term Fund"), American Century-Benham Tax-Free Money Market Fund
(formerly known as "Benham National Tax-Free Money Market Fund"), American
Century-Benham Limited-Term Tax-Free Fund, American Century-Benham
Intermediate-Term Tax-Free Fund (formerly known as "Benham National Tax-Free
Intermediate-Term Fund"), American Century-Benham Long-Term Tax-Free Fund
(formerly known as "Benham National Tax-Free Long-Term Fund"), American
Century-Benham New York Municipal Money Market Fund and American Century-Benham
High-Yield Municipal Fund. The Board of Trustees may create additional series
from time to time.

The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest without par value,
which may be issued in series (funds). Shares issued are fully paid and
nonassessable and have no pre-emptive, conversion or similar rights.

Each series votes separately on matters affecting that series exclusively.
Voting rights are not cumulative, so that investors holding more than 50% of the
Trust's (i.e., all series') outstanding shares may elect a Board of Trustees.
The Trust instituted dollar-based voting, meaning that the number of votes a
shareholder is

STATEMENT OF ADDITIONAL INFORMATION 17

entitled to is based upon the dollar amount of his or her investment. The
election of Trustees is determined by the votes received from all Trust
shareholders without regard to whether a majority of shareholders of any one
series voted in favor of a particular nominee or all nominees as a group. Each
shareholder has equal rights to dividends and distributions declared by the
fund, and to the net assets of such fund upon its liquidation or dissolution,
proportionate to his or her share ownership interest in the fund. Shares of each
series have equal voting rights, although each series votes separately on
matters affecting that series exclusively.

Shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable for its obligations. However, the
Declaration of Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust. The Declaration of Trust also provides for
indemnification and reimbursement of expenses of any shareholder held personally
liable for obligations of the Trust. The Declaration of Trust provides that the
Trust will, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. The Declaration of Trust further provides that the Trust may maintain
appropriate insurance (for example, fidelity, bonding, and errors and omissions
insurance) for the protection of the Trust, its shareholders, Trustees,
officers, employees and agents to cover possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss as a result of
shareholder liability is limited to circumstances in which both inadequate
insurance exists and the Trust itself is unable to meet its obligations.

CUSTODIAN BANKS: Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn,
New York 11245 and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64106
serve as custodians of the Trust's assets. Services provided by the custodian
banks include (a) settling portfolio purchases and sales, (b) reporting failed
trades, (c) identifying and collecting portfolio income, and (d) providing
safekeeping of securities. The custodian takes no part in determining a fund's
investment policies or in determining which securities are sold or purchased by
the fund.

INDEPENDENT ACCOUNTANTS: PricewaterhouseCoopers LLP, serves as the
independent accountants of the funds. The address of PricewaterhouseCoopers LLP,
is City Center Square, 1100 Main Street, Suite 900, Kansas City, Missouri
64105-2140.

TRUSTEES AND OFFICERS

The Trust's activities are overseen by a Board of Trustees, including six
independent Trustees. The individuals listed below whose names are marked by an
asterisk (*) are "interested persons" of the Trust (as defined in the Investment
Company Act) by virtue of, among other considerations, their affiliation with
either the Trust; the Trust's manager, American Century Investment Management,
Inc. (ACIM); the Trust's agent for transfer and administrative services,
American Century Services Corporation (ACS); their parent corporation, American
Century Companies, Inc. (ACC) or ACC's subsidiaries; other funds advised by the
manager; or the Trust's distributor and co-administrator, Funds Distributor,
Inc. (FDI). Each Trustee listed below serves as Trustee or Director of other
funds advised by the manager.

Unless otherwise noted, a date in parentheses indicates the date the Trustee
or officer began his or her service in a particular capacity. Mr. Paul and the
Trustees' (with the exception of Mr. Lyons and Mr. Stowers III) address is 1665
Charleston Road, Mountain View, California 94043. The address of Mr. Lyons, Mr.
Stowers III, Ms. Roepke, Mr. Zindel and Ms. Wade is American Century Tower, 4500
Main Street, Kansas City, Missouri 64111. The address of Mr. Rio, Mr. Kelley and
Ms. Nelson is 60 State Street, Suite 1300, Boston, Massachusetts 02109.

TRUSTEES

ALBERT A. EISENSTAT, independent Trustee (1995). Mr. Eisenstat is currently
the general partner of Discovery Ventures (1996), a venture capital firm. He is
also an independent Director of each of Commercial Metals Co. (1982), Sungard
Data Systems (1991) and Business Objects S/A (1994). Previously, he served as
Executive Vice President of Corporate Development and Corporate Secretary of
Apple Computer and served on its Board of Directors (1985 to 1993).

RONALD J. GILSON, independent Trustee (1995). Mr. Gilson is the Charles J.
Meyers Professor of Law and Business at Stanford Law School (1979) and the Mark
and Eva Stern Professor of Law and Business at

18 AMERICAN CENTURY INVESTMENTS

Columbia University School of Law (1992). Previously he served as counsel to
Marron, Reid & Sheehy (a San Francisco law firm, 1984).

*WILLIAM M. LYONS, Trustee (1998). Mr. Lyons is President and Chief
Operating Officer of ACC; Executive Vice President of ACS and ACIS; Assistant
Secretary of ACC; and Secretary of ACS and ACIS.

MYRON S. SCHOLES, independent Trustee (1985). Mr. Scholes was awarded the
1997 Nobel Memorial Prize in Economic Sciences for his role in the development
of the Black-Scholes option pricing model. Mr. Scholes is a principal of
Long-Term Capital Management (1993). He is also the Frank E. Buck Professor of
Finance at the Stanford Graduate School of Business (1983) and a Director of
Dimensional Fund Advisors (1982) and the Smith Breeden family of funds (1992).
From August 1991 to June 1993, Mr. Scholes was a Managing Director of Salomon
Brothers Inc. (securities brokerage).

KENNETH E. SCOTT, independent Trustee (1985). Mr. Scott is the Ralph M.
Parsons Professor of Law and Business at Stanford Law School (1972) and a
Director of RCM Capital Funds, Inc. (1994).

ISAAC STEIN, independent Trustee (1992). Mr. Stein is former Chairman of the
Board (1990 to 1992) and Chief Executive Officer (1991 to 1992) of Esprit de
Corp. (clothing manufacturer). He is a member of the Board of Raychem
Corporation (electrical equipment, 1993), President of Waverley Associates, Inc.
(private investment firm, 1983), and a Director of ALZA Corporation
(pharmaceuticals, 1987). He is also a Trustee of Stanford University (1994) and
Chairman of Stanford Health Services (hospital, 1994).

*JAMES E. STOWERS III, Chairman of the Board of Trustees (1998) and Trustee
(1995). Mr. Stowers III is Chief Executive Officer and Director of ACC, ACS and
ACIS.

JEANNE D. WOHLERS, independent Trustee (1985). Ms. Wohlers is a private
investor and an independent Director and Partner of Windy Hill Productions, LP.
Previously, she served as Vice President and Chief Financial Officer of Sybase,
Inc. (software company, 1988 to 1992).

OFFICERS

*GEORGE A. RIO, President (1998). Mr. Rio is Executive Vice President and
Client Service Director of Funds Distributor, Inc. (FDI). Prior to joining FDI,
Mr. Rio served as Senior Vice President and Senior Key Account Manager for
Putnam Mutual Funds (June 1995 to March 1998). Before that, he served as
Director of Business Development for First Data Corporation (May 1994 to June
1995) and Senior Vice President and Manager of Client Services and Director of
Internal Audit at The Boston Company Inc. (September 1983 to May 1994).

*DOUGLAS A. PAUL, Secretary (1988), Vice President (1990) and General
Counsel (1990). Mr. Paul is Vice President and Associate General Counsel of ACS

*MARYANNE ROEPKE, CPA, Treasurer (1995) and Senior Vice President (1998).
Ms. Roepke is Vice President and Assistant Treasurer of ACS.

*CHRISTOPHER J. KELLEY, Vice President (1998). Mr. Kelley is Vice President
and Associate General Counsel of FDI. Mr. Kelley joined FDI in 1996. Prior to
joining FDI, Mr. Kelley served as Assistant Counsel at Forum Financial Group
(from April 1994 to July 1996) and before that as a compliance officer for
Putnam Investments (from 1992 to 1994).

*MARY A. NELSON, Vice President (1998). Ms. Nelson is Vice President and
Manager of Treasury Services and Administration of FDI. Prior to joining FDI in
1995, Ms. Nelson served as Assistant Vice President and Client Manager for The
Boston Company, Inc. (from 1989 to 1994).

*PATRICK A. LOOBY, Vice President and Assistant Secretary (1998). Mr. Looby
is Vice President and Associate General Counsel of ACS.

*JON ZINDEL, Tax Officer (1997). Mr. Zindel is Vice President and Director
of Taxation of ACS. Mr. Zindel joined ACS in 1996. Prior to joining ACS, he was
Tax Manager, Price Waterhouse LLP (1989).

*C. JEAN WADE, Controller (1996). Ms. Wade joined ACS in 1991.

The table on the next page summarizes the compensation that the Trustees of
the funds received for the fiscal year ended May 31, 1998.

STATEMENT OF ADDITIONAL INFORMATION 19

TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED MAY 31, 1998

Aggregate Total Compensation
Name of Compensation From the American Century
Trustee(1) From the Trust(2) Family of Funds(3)
- ------------------------------------------------------------------------------
Albert Eisenstat $2,540 $59,250
- ------------------------------------------------------------------------------
Ronald J. Gilson $2,696 $62,000
- ------------------------------------------------------------------------------
Myron S. Scholes $2,373 $55,750
- ------------------------------------------------------------------------------
Kenneth E. Scott $2,708 $61,750
- ------------------------------------------------------------------------------
Isaac Stein $2,499 $57,250
- ------------------------------------------------------------------------------
Jeanne D. Wohlers $2,708 $61,750
- ------------------------------------------------------------------------------

(1) Interested Trustees receive no compensation for their services as such.

(2) Total amount of deferred compensation included in the preceding table is as
follows: Mr. Eisenstat, $38,750; Mr. Gilson, $41,500; Mr. Scholes, $36,750;
and Mr. Scott, $21,375.

(3) Includes compensation paid by the 13 investment company members of the
American Century family of funds.

MANAGEMENT

Each fund (except New York Municipal Money Market and High-Yield Municipal)
has an investment management agreement with the manager dated August 1, 1997.
This agreement was approved by the shareholders of each of the funds on July 30,
1997. The investment management agreements between High-Yield Municipal and New
York Municipal Money Market with the manager are dated as of March 31, 1998, and
August 15, 1998, respectively.

For the services provided to the funds, the manager receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds of its investment
category that are managed by the manager (the "Investment Category Fee"). For
example, when calculating the fee for a Money Market Fund, all of the assets of
the money market funds managed by the manager are aggregated. The three
investment categories are Money Market Funds, Bond Funds and Equity Funds.
Second, a separate fee rate schedule is applied to the assets of all of the
funds managed by the manager (the "Complex Fee"). The Investment Category Fee
and the Complex Fee are then added to determine the unified management fee
payable by the fund to the manager.

The schedules by which the Investment Category Fee are determined are as
follows:

MONEY MARKET FUNDS

Category Assets Fee Rate
- ------------------------------------------------------
First $1 billion 0.2700%

Next $1 billion 0.2270%

Next $3 billion 0.1860%

Next $5 billion 0.1690%

Next $15 billion 0.1580%

Next $25 billion 0.1575%

Thereafter 0.1570%
- ------------------------------------------------------

ARIZONA, FLORIDA INTERMEDIATE-TERM,
LIMITED-TERM TAX-FREE, INTERMEDIATE-TERM
TAX-FREE, LONG-TERM TAX-FREE

Category Assets Fee Rate
- ----------------------------------------------

First $1 billion 0.2800%

Next $1 billion 0.2280%

Next $3 billion 0.1980%

Next $5 billion 0.1780%

Next $15 billion 0.1650%

Next $25 billion 0.1630%

Thereafter 0.1625%
- -----------------------------------------------

HIGH-YIELD MUNICIPAL

Category Assets Fee Rate
- -------------------------------------

First $1 billion 0.4100%

Next $1 billion 0.3580%

Next $3 billion 0.3280%

Next $5 billion 0.3080%

Next $15 billion 0.2950%

Next $25 billion 0.2930%

Thereafter 0.2925%
- -------------------------------------

The Complex Fee Schedule is as follows:

Complex Assets Fee Rate
- ------------------------------------------

First $2.5 billion 0.3100%

Next $7.5 billion 0.3000%

Next $15.0 billion 0.2985%

Next $25.0 billion 0.2970%

Next $50.0 billion 0.2960%

Next $100.0 billion 0.2950%

Next $100.0 billion 0.2940%

Next $200.0 billion 0.2930%

Next $250.0 billion 0.2920%

Next $500.0 billion 0.2910%

Thereafter 0.2900%
- ------------------------------------------

20 AMERICAN CENTURY INVESTMENTS

The management agreement shall continue in effect until the earlier of the
expiration of two years from the date of its execution or until the first
meeting of shareholders following such execution, and for as long thereafter as
its continuance is specifically approved at least annually by (1) the funds'
Board of Trustees, or by a majority of outstanding votes (as defined in the
Investment Company Act), and (2) by a majority of the Trustees of the funds who
are not parties to the agreement or interested persons of the manager, cast in
person at a meeting called for the purpose of voting on such approval.

The management agreement provides that it may be terminated at any time
without payment of any penalty by the funds' Board of Trustees, or by a vote of
a majority of the funds' shareholders, on 60 days' written notice to the
manager, and that it shall be automatically terminated if it is assigned.

The management agreement provides that the manager shall not be liable to
the funds or its shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.

The management agreement also provides that the manager and its officers,
trustees and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.

Certain investments may be appropriate for the funds and also for other
clients advised by the manager. Investment decisions for the funds and other
clients are made with a view to achieving their respective investment objectives
after consideration of such factors as their current holdings, availability of
cash for investment and the size of their investment generally. A particular
security may be bought or sold for only one client or series, or in different
amounts and at different times for more than one but less than all clients or
series. In addition, purchases or sales of the same security may be made for two
or more clients or series on the same date. Such transactions will be allocated
among clients in a manner believed by the manager to be equitable to each. In
some cases this procedure could have an adverse effect on the price or amount of
the securities purchased or sold by a fund.

The manager may aggregate purchase and sale orders of the funds with
purchase and sale orders of its other clients when the manager believes that
such aggregation provides the best execution for the funds. The funds' Board of
Trustees has approved the policy of the manager with respect to the aggregation
of portfolio transactions. Where portfolio transactions have been aggregated,
the funds participate at the average share price for all transactions in that
security on a given day and share transaction costs on a pro rata basis. The
manager will not aggregate portfolio transactions of the funds unless it
believes such aggregation is consistent with its duty to seek best execution on
behalf of the funds and the terms of the management agreement. The manager
receives no additional compensation or remuneration as a result of such
aggregation.

In addition to managing the funds, the manager also serves as an investment
advisor to 12 institutional accounts and to the following registered investment
companies: American Century Mutual Funds, Inc., American Century World Mutual
Funds, Inc., American Century Premium Reserves, Inc., American Century Variable
Portfolios, Inc., American Century Capital Portfolios, Inc., American Century
Strategic Asset Allocations, Inc., American Century Government Income Trust,
American Century Investment Trust, American Century Target Maturities Trust,
American Century California Tax-Free and Municipal Funds, American Century
Quantitative Equity Funds and American Century International Bond Funds.

Prior to August 1, 1997, Benham Management Corporation served as the
investment advisor to the funds. Benham Management Corporation was, like the
manager, wholly owned by ACC. In late 1997, Benham Management Corporation was
merged into the manager.

Investment management fees paid by the Arizona Fund, the Florida Funds and
the Tax-Free Money Market Fund to the manager (or its affiliate, Benham

STATEMENT OF ADDITIONAL INFORMATION 21

Management Corporation) for the fiscal periods ended May 31, 1998, 1997, and
1996, are indicated in the following table.

Fee amounts are net of amounts reimbursed or recouped under the prior
investment advisory agreement with Benham Management Corporation.

Investment Management Fees (net of reimbursements)
- --------------------------------------------------------------------------
Fiscal Fiscal Fiscal

Fund 1998* 1997 1996
- --------------------------------------------------------------------------

Arizona $179,507 $81,705 $0

Florida Money Market 564,438 0 0

Florida Intermediate-Term 120,693 23,601 0

Tax-Free Money Market 1,201,502 341,854 331,599

High-Yield Municipal 0 N/A N/A
- --------------------------------------------------------------------------

*Fees for the periods up to July 31, 1997, which were paid under the Investment
Advisory Agreement with Benham Management Corporation, do not include
administrative and transfer agent fees.

The remaining funds paid investment management fees (net of fees waived) to
American Century Investment Management, Inc. for the fiscal periods ended May
31, 1998, and October 31, 1997, and 1996 as indicated in the following table.

Investment Management Fees (net of fees waived)
- -----------------------------------------------------------------
Fiscal Fiscal Fiscal

Fund 1998* 1997 1996
- -----------------------------------------------------------------

Limited-Term Tax-Free $112,235 $259,501 $205,918

Intermediate-Term
Tax-Free 402,534 489,817 484,914

Long-Term Tax-Free 332,031 378,372 352,945
- -----------------------------------------------------------------

*Seven-month period.

TRANSFER AND ADMINISTRATIVE SERVICES

American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111, acts as transfer agent and dividend-paying agent for the funds.
It provides physical facilities, including computer hardware and software and
personnel, for the day-to-day administration of the funds and of the manager.
The manager pays American Century Services Corporation for such services.

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds, and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the manager.

Prior to August 1, 1997, the funds paid American Century Services
Corporation directly for its services as transfer agent and administrative
services agent.

Administrative service and transfer agent fees paid by the Arizona Fund, the
Florida Funds and the Tax-Free Money Market Fund under the Investment Advisory
Agreement with Benham Management Corporation for the fiscal years ended May 31,
1998, 1997, and 1996, are indicated in the following tables. Fee amounts are net
of reimbursements in effect in the periods presented.

Administrative Fees
- -------------------------------------------------------------------------
Fiscal Fiscal Fiscal

Fund 1998 1997 1996
- -------------------------------------------------------------------------

Arizona $4,889 $26,168 $0

Florida Money Market 15,789 0 0

Florida Intermediate-Term 3,851 10,678 0

Tax-Free Money Market 13,717 84,467 88,675
- -------------------------------------------------------------------------

Transfer Agent Fees
- -------------------------------------------------------------------------
Fiscal Fiscal Fiscal

Fund 1998 1997 1996
- -------------------------------------------------------------------------

Arizona $3,255 $19,990 $0

Florida Money Market 6,746 0 0

Florida Intermediate-Term 1,484 10,178 0

Tax-Free Money Market 9,971 61,414 66,117
- -------------------------------------------------------------------------

DISTRIBUTION OF FUND SHARES

The funds' shares are distributed by FDI (the "Distributor"), a registered
broker-dealer. The manager pays all expenses for promoting and distributing the
funds' shares. The funds do not pay any commissions or other fees to the
Distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The funds' shares are continuously offered at net asset value. Share
certificates are issued (without charge) only when requested in writing.
Certificates

22 AMERICAN CENTURY INVESTMENTS

are not issued for fractional shares. Dividend and voting rights are not
affected by the issuance of certificates.

American Century may reject or limit the amount of an investment to prevent
any one shareholder or affiliated group from controlling the Trust or one of its
series; to avoid jeopardizing a series' tax status; or whenever, in the
manager's opinion, such rejection is in the Trust's or a series' best interest.

As of July 31, 1998, to the knowledge of the Trust, the shareholders listed
in the chart below were record holders of 5% or more of the outstanding shares
of the individual funds.

Fund Arizona Fund
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104
- --------------------------------------------------------------------------------
# of Shares Held 976,496
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 26.1%
- --------------------------------------------------------------------------------

Fund Florida Municipal Money
Market
- --------------------------------------------------------------------------------
Shareholder Name and Morgan Guaranty
Address 522 5th Avenue
New York, NY 10036
- --------------------------------------------------------------------------------
# of Shares Held 14,285,513
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 13.9%
- --------------------------------------------------------------------------------
Shareholder Name and Margaret A. Benham
Address 14837 Derby Oaks Rd.
Astatula, FL 34705
- --------------------------------------------------------------------------------
# of Shares Held 12,157,953
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 11.8%
- --------------------------------------------------------------------------------
Shareholder Name and Benjamin Benham
Address 2077 Curryville Rd.
Chuluota, FL 32766
- --------------------------------------------------------------------------------
# of Shares Held 7,991,089
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 7.8%
- --------------------------------------------------------------------------------

Fund Florida Intermediate-Term
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104
- --------------------------------------------------------------------------------
# of Shares Held 490,370
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 17.0%
- --------------------------------------------------------------------------------
Shareholder Name and American Century Investment
Address Management
4500 Main Street
Kansas City, MO 64111
- --------------------------------------------------------------------------------
# of Shares Held 220,199
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 7.6%
- --------------------------------------------------------------------------------
Shareholder Name and Morgan Guaranty
Address 522 5th Avenue
New York, NY 10036
- --------------------------------------------------------------------------------
# of Shares Held 797,878
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 27.6%
- --------------------------------------------------------------------------------

Fund Tax-Free Money Market
- --------------------------------------------------------------------------------
Shareholder Name and James M. Benham
Address 321 Country Club Dr.
Incline Village, NV 89451
- --------------------------------------------------------------------------------
# of Shares Held 39,348,227
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 8.7%
- --------------------------------------------------------------------------------

Fund Intermediate-Term Tax-Free
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104
- --------------------------------------------------------------------------------
# of Shares Held 1,156,036
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 8.8%
- --------------------------------------------------------------------------------

Fund Long-Term Tax-Free
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104
- --------------------------------------------------------------------------------
# of Shares Held 591,975
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 5.6%
- --------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION 23

Fund High-Yield Municipal
- --------------------------------------------------------------------------------
Shareholder Name and American Century Investment
Address Management
4500 Main Street
Kansas City, MO 64111
- --------------------------------------------------------------------------------
# of Shares Held 510,961
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 18.8%
- --------------------------------------------------------------------------------
Shareholder Name and Todd Morgan
Address 9555 E. Celestial Dr.
Scottsdale, AZ 85262
- --------------------------------------------------------------------------------
# of Shares Held 154,102
- --------------------------------------------------------------------------------
% of Total Shares
Outstanding 5.7%
- --------------------------------------------------------------------------------

As of July 31, 1998, the shares of the corporation owned beneficially and of
record by the officers and directors of the corporation in the aggregate were
less than 1% of the shares offered by any fund. James E. Stowers Jr., Chairman
of the Board and Director of American Century Companies, Inc., by virtue of his
control of American Century Companies, Inc., may be deemed to beneficially own
fund shares. Mr. Stowers disclaims ownership of such shares.

ACS charges neither fees nor commissions on the purchase and sale of fund
shares. However, ACS may charge fees for special services requested by a
shareholder or necessitated by acts or omissions of a shareholder. For example,
ACS may charge a fee for processing dishonored investment checks or stop-payment
requests. See the Investor Services Guide for more information.

Pursuant to Rule 18f-1 under the Investment Company Act of 1940, the Trust
has elected to pay in cash all requests for redemption by any shareholder of
record, limited in amount with respect to each shareholder during any 90-day
period to the lesser of $250,000 or 1% of the net assets of the fund in which
shares are held at the beginning of such period. This election is irrevocable
without the prior approval of the Securities and Exchange Commission. With
respect to redemption requests in excess of the above limit, it is the intention
of the Trust to make payments in cash, although the Trustees reserve the right
to make payments in whole or in part in securities under emergency circumstances
or when payment in cash would impair the liquidity of a fund to the detriment of
shareholders. In this event, the securities would be valued in the same manner
applied in valuing the funds' assets for purposes of calculating NAV. An
investor may incur brokerage costs upon the sale of such securities.

OTHER INFORMATION

To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If additional copies of financial reports and prospectuses or
separate mailing of account statements is desired, please call us.

For further information, refer to the registration statements and exhibits
on file with the SEC in Washington, D.C. These documents are available upon
payment of a reproduction fee. Statements in the Prospectus and in this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.

MUNICIPAL SECURITIES RATINGS

Securities rating descriptions provided under this heading are excerpted
from publications of Moody's Investors Service, Inc. and Standard & Poor's
Corporation.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL BOND RATINGS:

Aaa: Bonds that are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or exceptionally stable
margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa: Bonds that are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group, they constitute what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may

24 AMERICAN CENTURY INVESTMENTS

be other elements present that make long-term risks appear somewhat larger than
in Aaa securities.

A: Bonds that are rated "A" possess many favorable investment attributes and
are to be considered as upper medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment sometime in the future.

Baa: Bonds that are rated "Baa" are considered medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.

Ba: Bonds that are rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times in the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds that are rated "B" generally lack the characteristics of a
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
limited.

Caa: Bonds that are rated "Caa" are of poor standing. Such issues may be in
default, or there may be elements of danger present with respect to principal or
interest.

Ca: Bonds that are rated "Ca" represent obligations that are speculative to
a high degree. Such issues are often in default or have other marked
shortcomings.

C: Bonds that are rated "C" are the lowest-rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing. Note: Moody's may apply the numerical modifier "1"
for municipally backed bonds and modifiers "1," "2," and "3" for
corporate-backed municipal bonds. The modifier "1" indicates that the security
ranks in the higher end of its generic rating category; the modifier "2"
indicates a mid-range ranking; and the modifier "3" indicates that the issue
ranks in the lower end of its generic rating category.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF NOTES AND
VARIABLE-RATE DEMAND OBLIGATIONS:

Moody's ratings for state and municipal short-term obligations are
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short-term credit and long-term risk. Short-term ratings on
issues with demand features (variable-rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than on fixed maturity dates and payments
relying on external liquidity.

MIG 1/VMIG 1: This designation denotes best quality. There is strong
protection present through established cash flows, superior liquidity support,
or demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2: This denotes high quality. Margins of protection are ample,
although not as large as in the preceding group.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S TAX-EXEMPT COMMERCIAL PAPER
RATINGS:

Moody's commercial paper ratings are opinions of the ability of issuers to
punctually repay those promissory obligations that have an original maturity not
exceeding nine months. Moody's makes no representation that such obligations are
exempt from registration under the Securities Act of 1933, nor does it represent
that any specific note is a valid obligation of a rated issuer or issued in
conformity with any applicable law. The following designations, all judged to be
investment grade, indicate the relative repayment ability of rated issuers of
securities in which the funds may invest.

PRIME 1: Issuers rated "Prime 1" (or supporting institutions) have a
superior ability for repayment of senior short-term promissory obligations.

PRIME 2: Issuers rated "Prime 2" (or supporting institutions) have a strong
ability for repayment of senior short-term promissory obligations.

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS FOR MUNICIPAL BONDS:

INVESTMENT GRADE

AAA: Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

STATEMENT OF ADDITIONAL INFORMATION 25

AA: Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in a small degree.

A: Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.

BBB: Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.

SPECULATIVE

BB, B, CCC, CC: Debt rated in these categories is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.

BB: Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions that could lead to inadequate
capacity to meet timely interest and principal payments. The "BB" rating
category also is used for debt subordinated to senior debt that is assigned an
actual or implied "BBB-" rating.

B: Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category also is
used for debt subordinated to senior debt that is assigned an actual or implied
"BB" or "BB-" rating.

CCC: Debt rated "CCC" has a currently identifiable vulnerability to default
and is dependent upon favorable business, financial and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category also is
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.

CC: The rating "CC" typically is applied to debt subordinated to senior debt
that is assigned an actual or implied "CCC" debt rating.

C: The "C" rating is typically applied to debt subordinated to senior debt
that is assigned an actual or implied "CC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.

CI: The "CI" rating is reserved for income bonds on which no interest is
being paid.

D: Debt rated "D" is in default, and payment of interest and/or repayment of
principal is in arrears.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS FOR INVESTMENT-GRADE
MUNICIPAL NOTES AND SHORT-TERM DEMAND OBLIGATIONS:

SP-1: Issues carrying this designation have a very strong or strong capacity
to pay principal and interest. Those issues determined to possess an
overwhelming number of safety characteristics will be given a plus (+)
designation.

SP-2: Issues carrying this designation have a satisfactory capacity to pay
principal and interest.

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS FOR DEMAND OBLIGATIONS
AND TAX-EXEMPT COMMERCIAL PAPER:

A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. The two rating categories for securities in which the funds may invest
are as follows:

A-1: This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."

26 AMERICAN CENTURY INVESTMENTS

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485

FAX: 816-340-7962

www.americancentury.com

[american century logo(reg.sm)]
American
Century(reg.sm)

9808 [recycled logo]
SH-BKT-13319 Recycled
<PAGE>

AMERICAN CENTURY MUNICIPAL TRUST

1933 Act Post-Effective Amendment No. 25
1940 Act Amendment No. 26
- --------------------------------------------------------------------------------

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) FINANCIAL STATEMENTS. Audited financial statements for each series of
the American Century Municipal Trust, for the fiscal year ended May 31,
1998, are filed herein as included in the Trust's Statement of
Additional Information by reference to the Annual Reports dated May 31,
1998, filed on July 30, 1998 (Accession #746458-98-000011).

(b) EXHIBITS.

(1) a) Amended Declaration of Trust dated May 31, 1995, is incorporated
herein by reference to Exhibit 1(a) of Post-Effective Amendment No.
16 filed on July 28, 1995.

b) Amendment to the Declaration of Trust dated October 21, 1996 is
incorporated herein by reference to Exhibit 1(b) of Post-Effective
Amendment No. 19 to the Registration Statement, filed on March 12,
1997 (Accession No. 746458-97-000004).

c) Amendment to the Declaration of Trust dated May 23, 1997, is
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 20 to the Registration Statement filed August 29, 1997
(Accession No. 0000746458-97-000011).

(2) Amended and Restated Bylaws dated March 9, 1998 are incorporated
herein by reference to Exhibit 2 of Post-Effective Amendment No. 23
to the Registration Statement, filed March 26, 1998 (Accession
#746458-98-000007).

(3) Not applicable.

(4) a) Specimen copy of American Century - Benham Tax-Free Money Market
Fund, American Century - Benham Intermediate-Term Tax-Free Fund and
American Century - Benham Long-Term Tax-Free Fund share certificate
is incorporated herein by reference to Exhibit 4 to Post-Effective
Amendment No. 10, filed on June 9, 1992.

b) Specimen copy of American Century - Benham Florida Municipal
Money Market Fund's share certificate is incorporated herein by
reference to Exhibit 4 to Post-Effective Amendment No. 15 filed on
August 4, 1994.

c) Specimen copy of American Century - Benham Florida
Intermediate-Term Municipal Fund's share certificate is incorporated
herein by reference to Exhibit 4 to Post-Effective Amendment No. 15
filed on August 4, 1994.

d) Specimen copy of American Century - Benham Arizona
Intermediate-Term Municipal Fund's share certificate is incorporated
herein by reference to Exhibit 4 to Post-Effective Amendment No. 15
filed on August 4, 1994.

(5) a) Investor Class Investment Management Agreement between American
Century Municipal Trust and American Century Investment Management,
Inc., dated August 1, 1997, is incorporated herein by reference to
Exhibit 5 of Post-Effective Amendment #33 to the Registration
Statement of American Century Government Income Trust, filed July
31, 1997 (Accession #773674-97-000014).

b) Amendment dated March 31, 1998 to the Investor Class Investment
Management Agreement between American Century Municipal Trust and
American Century Investment Management, Inc., dated August 1, 1997,
is incorporated herein by reference to Exhibit 5 of Post-Effective
Amendment No. 23 to the Registration Statement, filed March 26, 1998
(Accession #746458-98-000007).

(6) a) Distribution Agreement between American Century Municipal Trust
and Funds Distributor, Inc., dated January 15, 1998, is incorporated
herein by reference to Exhibit 6 of Post-Effective Amendment No. 28
to the Registration Statement of American Century Target Maturities
Trust, filed January 30, 1998 (Accession #757928-98-000002).

b) Amendment dated March 9, 1998 to the Distribution Agreement
between American Century Municipal Trust and Funds Distributor,
Inc., dated January 15, 1998, is incorporated herein by reference to
Exhibit 6 of Post-Effective Amendment No. 23 to the Registration
Statement, filed March 26, 1998 (Accession #746458-98-000007).

(7) Not applicable.

(8) Custodian Agreement between American Century Investments (including
American Century Municipal Trust), and The Chase Manhattan Bank,
dated August 9, 1996, is incorporated herein by reference to Exhibit
8 of Post-Effective Amendment No. 31 to the Registration Statement
for American Century Government Income Trust, filed February 7, 1997
(Accession #773674-97-000002).

(9) a) Transfer Agency Agreement between American Century Municipal
Trust and American Century Services Corporation, dated August 1,
1997, is incorporated herein by reference to Exhibit 9 of
Post-Effective Amendment No. 33 to the Registration Statement for
American Century Government Income Trust, filed on July 31, 1997
(Accession #773674-97-000014).

b) Amendment dated March 9, 1998 to the Transfer Agency Agreement
between American Century Municipal Trust and American Century
Services Corporation, dated August 1, 1997, is incorporated herein
by reference to Exhibit 9 of Post-Effective Amendment No. 23 to the
Registration Statement, filed March 26, 1998 (Accession
#746458-98-000007).

(10)a) Opinion and consent of counsel as to the legality of the
securities being registered, dated August 18, 1998 is incorporated
herein by reference to Rule 24f-2 Notice filed on August 18, 1998
(Accession # 0000746458-98-000013).

b) Opinion and consent of counsel as to the legality of the American
Century - Benham New York Municipal Fund is included herein.

(11)a)Consent of KPMG Peat Marwick LLP, independent auditors, is
included herein.

b)Consent of Baird, Kurtz & Dobson, independent auditors, is
included herein.

c)Consent of PricewaterhouseCoopers, LLP, independent accountants,
is included herein.

(12)Not applicable.

(13)Not applicable.

(14)Not applicable.

(15)Not applicable.

(16)Schedule for computation of each performance quotation provided in
response to Item 22 for the funds in American Century Municipal
Trust are included herein.

(17)Power of Attorney dated July 9, 1998 is included herein.

Item 25. Persons Controlled by or Under Control with Registrant.

Not applicable.

Item 26. Number of Holders of Securities.

As of July 24, 1998, each operating series of the Registrant had the following
number of record shareholders:

American Century - Benham Tax-Free Money Market Fund 3,889
American Century - Benham Intermediate-Term Tax-Free Fund 3,391
American Century - Benham Long-Term Tax-Free Fund 2,993
American Century - Benham Florida Municipal Money Market Fund 942
American Century - Benham Florida Intermediate-Term Municipal Fund 346
American Century - Benham Arizona Intermediate-Term Municipal Fund 596
American Century - Benham Limited-Term Tax Free Fund 908
American Century - Benham High-Yield Municipal Fund 659
American Century - Benham New York Municipal Fund 0

Item 27. Indemnification.

As stated in Article VII, Section 3 of the Declaration of Trust, incorporated
herein by reference to Exhibit 1 to the Registration Statement, "The Trustees
shall be entitled and empowered to the fullest extent permitted by law to
purchase insurance for and to provide by resolution or in the Bylaws for
indemnification out of Trust assets for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit, or proceeding in which he or she
becomes involved by virtue of his or her capacity or former capacity with the
Trust. The provisions, including any exceptions and limitations concerning
indemnification, may be set forth in detail in the Bylaws or in a resolution
adopted by the Board of Trustees."

Registrant hereby incorporates by reference, as though set forth fully herein,
Article VI of the Registrant's Bylaws, amended on March 9, 1998, incorporated
herein by reference to Exhibit 2 of Post-Effective Amendment No. 23 to the
Registration Statement filed on March 26, 1998 (Accession # 746458-98-000007).

Item 28. Business and Other Connections of Investment Advisor.

American Century Investment Management, Inc., the investment manager to each of
the Registrant's Funds, is engaged in the business of managing investments for
deferred compensation plans and other institutional investors.

Item 29. Principal Underwriter.

(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
The JPM Series Trust
The JPM Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

The Distributor is registered with the Securities and Exchange Commission as
a broker-dealer and is a member of the National Association of Securities
Dealers. The Distributor is located at 60 State Street, Suite 1300, Boston,
Massachusetts 02109. The Distributor is an indirect wholly-owned subsidiary of
Boston Institutional Group, Inc., a holding company all of whose outstanding
shares are owned by key employees.

(b) The following is a list of the executive officers, directors and
partners of the Distributor:

<TABLE>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant

<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer

Richard W. Ingram Executive Vice President President, Principal Executive
and Principal Financial Officer

Donald R. Roberson Executive Vice President none

William S. Nichols Executive Vice President none

Michael S. Petrucelli Senior Vice President none

Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer

Paula R. David Senior Vice President none

Allen B. Closser Senior Vice President none

Bernard A. Whalen Senior Vice President none

William J. Nutt Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>

Item 30. Location of Accounts and Records.

American Century Investment Management, Inc., the Registrant, and its agent for
transfer and administrative services, American Century Services Corporation,
maintain their principal office at 4500 Main St., Kansas City, MO 64111.
American Century Services Corporation maintains physical possession of each
account, book, or other document, and shareholder records as required by
ss.31(a) of the 1940 Act and rules thereunder.

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

a) Registrant undertakes to furnish each person to whom a Prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

b) Registrant hereby undertakes to call a meeting of shareholders of the Trust
upon written request of shareholders owning at least one-tenth of the
outstanding shares.

c) The Registrant undertakes to assist shareholders in their communications
with other shareholders.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Post-Effective Amendment No. 25 to its Registration
Statement pursuant to Rule 485(b) promulgated under the Securities Act of 1933,
as amended, and has duly caused this Post-Effective Amendment No. 25 to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mountain View, State of California on the 27th
day of August, 1998.

AMERICAN CENTURY MUNICIPAL TRUST

By: /s/ Douglas A. Paul
Douglas A. Paul
Secretary, Vice President and General Counsel

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 25/Amendment No. 26 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Date
<S> <C> <C>
* President, Principal Executive August 27, 1998
- --------------------------------- Officer and Principal Financial
George A. Rio Officer

* August 27, 1998
- --------------------------------- Trustee
William M. Lyons

* Trustee August 27, 1998
- ---------------------------------
Albert A. Eisenstat

* Trustee August 27, 1998
- ---------------------------------
Ronald J. Gilson

* Trustee August 27, 1998
- ---------------------------------
Myron S. Scholes

* Trustee August 27, 1998
- ---------------------------------
Kenneth E. Scott

* Trustee August 27, 1998
- ---------------------------------
Isaac Stein

* Trustee, Chairman of the Board August 27, 1998
- ---------------------------------
James E. Stowers III

* Trustee August 27, 1998
- ---------------------------------
Jeanne D. Wohlers

* Vice President and Treasurer August 27, 1998
- ---------------------------------
Maryanne Roepke
</TABLE>

/s/ Douglas A. Paul
*by Douglas A. Paul, Attorney in Fact (pursuant to a Power of Attorney dated
July 9, 1998).

EXHIBIT DESCRIPTION

EX-99.B1 a)Amended Declaration of Trust dated May 31, 1995, is incorporated
herein by reference to Exhibit 1(a) of Post-Effective Amendment No.
16 filed on July 28, 1995.

(c) Amendment to the Declaration of Trust dated May 23, 1997, is
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 20 to the Registration Statement filed August 29, 1997
(Accession No. 0000746458-97-000011).

EX-99.B2 Amended and Restated Bylaws dated March 9, 1998 are incorporated
herein by reference to Exhibit 2 of Post-Effective Amendment No. 23
to the Registration Statement, filed March 26, 1998 (Accession
#746458-98-000007).

EX-99.B4 a) Specimen copy of American Century - Benham Tax-Free Money Market
Fund, American Century - Benham Intermediate-Term Tax-Free Fund and
American Century - Benham Long-Term Tax-Free Fund share certificate
is incorporated herein by reference to Exhibit 4 to Post-Effective
Amendment No. 10 filed on June 9, 1992.

EX-99.B5 a) Investor Class Investment Management Agreement between American
Century Municipal Trust and American Century Investment Management,
Inc., dated August 1, 1997, is incorporated herein by reference to
Exhibit 5 of Post-Effective Amendment #33 to the Registration
Statement of American Century Government Income Trust, filed July
31, 1997 (Accession #773674-97-000014).

EX-99.B6 a) Distribution Agreement between American Century Municipal Trust
and Funds Distributor, Inc., dated January 15, 1998, is incorporated
herein by reference to Exhibit 6 of Post-Effective Amendment No. 28
to the Registration Statement of American Century Target Maturities
Trust, filed January 30, 1998 (Accession #757928-98-000002).

EX-99.B8 Custodian Agreement between American Century Investments (including
American Century Municipal Trust), and The Chase Manhattan Bank,
dated August 9, 1996, is incorporated herein by reference to Exhibit
8 of Post-Effective Amendment #31 to the Registration Statement for
American Century Government Income Trust, filed February 7, 1997
(Accession #773674-97-000002).

EX-99.B9 a) Transfer Agency Agreement between American Century Municipal
Trust and American Century Services Corporation, dated August 1,
1997, is incorporated herein by reference to Exhibit 9 of
Post-Effective Amendment No. 33 to the Registration Statement for
American Century Government Income Trust, filed on July 31, 1997
(Accession #773674-97-000014).

EX-99.B10 a) Opinion and consent of counsel as to the legality of the
securities being registered, dated August 18, 1998 is incorporated
herein by reference to Rule 24f-2 Notice filed on August 18, 1998
(Accession #746458-98-000013).

b) Opinion and consent of counsel as to the legality of the American
Century - Benham New York Municipal Fund is included herein.

EX-99.B11 a)Consent of KPMG Peat Marwick LLP, independent auditors, is
included herein.

b)Consent of Baird, Kurtz & Dobson, independent auditors, is
included herein.

c) Consent of PricewaterhouseCoopers, LLP, independent accountants,
is included herein.

EX-99.B16 Schedule for computation of each performance quotation provided in
response to Item 22 for the funds in American Century Municipal
Trust are included herein.

EX-99.B17 Power of Attorney dated July 9, 1998 is included herein.

EX-27.4.1 FDS - American Century - Benham Tax-Free Money Market Fund.

EX-27.4.2 FDS - American Century - Benham Florida Municipal Money Market Fund.

EX-27.5.3 FDS - American Century - Benham Intermediate-Term Tax-Free Fund.

EX-27.5.4 FDS - American Century - Benham Florida Intermediate-Term Municipal
Fund.

EX-27.5.5 FDS - American Century - Benham Arizona Intermediate-Term Municipal
Fund.

EX-27.5.6 FDS - American Century - Benham Long-Term Tax-Free Fund.

EX-27.5.7 FDS - American Century - Benham Limited-Term Tax-Free Fund.

EX-27.5.8 FDS - American Century - Benham High-Yield Municipal Fund.

August 25, 1998

American Century Municipal Trust
4500 Main Street
Kansas City, MO 64111

Dear Sirs:

As counsel for the American Century Municipal Trust (the "Trust"), I am familiar
with the Trust's registration under the Investment Company Act of 1940 and with
the registration statement relating to its Common Shares (the "Shares") under
the Securities Act of 1933 (File No. 2-91229) (the "Registration Statement"). I
have also examined such other corporate records, agreements, documents and
instruments as I deemed appropriate in connection with the establishment of a
new series of the Trust, American Century-Benham New York Municipal Money Market
Fund (the "Fund").

Based upon the foregoing, it is my opinion that the Shares to be sold at the
public offering price and delivered by the Fund against receipt of the net asset
value of the Shares in compliance with the terms of the Registration Statement
and the requirements of applicable law, will be, when sold, duly and validly
authorized, and fully paid and non-assessable.

I consent to the filing of this opinion in connection with the Post-Effective
Amendment Number 25 to the Trust's Registration Statement under the Securities
Act of 1933 and Investment Company Act of 1940 to be filed with respect to the
Fund with the Securities and Exchange Commission.

Very truly yours,

/s/ Douglas A. Paul
Douglas A. Paul
Vice President and Secretary

INDEPENDENT AUDITORS' CONSENT

The Board of Trustees
American Century Municipal Trust:

We consent to the use of our report dated July 7, 1997 included in your
registration statement.

/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Kansas City, Missouri
August 26, 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
American Century Municipal Trust:

We have audited the accompanying statements of changes in net assets of American
Century-Benham Tax-Free Money Market Fund, American Century-Benham
Intermediate-Term Tax-Free Fund, American Century-Benham Long-Term Tax-Free
Fund, American Century-Benham Arizona Intermediate-Term Municipal Fund, American
Century-Benham Florida Municipal Money Market Fund, American Century-Benham
Florida Intermediate-Term Municipal Fund, (six of the Funds comprising American
Century Municipal Trust) for the ten years ended May 31, 1997 for the American
Century-Benham Tax-Free Money Market Fund, the American Century-Benham
Intermediate-Term Tax-Free Fund, and the American Century-Benham Long-Term
Tax-Free Fund, and for the three years ended May 31, 1997 and the period April
11, 1994 (inception) through May 31, 1994 for the American Century-Benham
Arizona Intermediate-Term Municipal Fund, the American Century-Benham Florida
Municipal Money Market Fund, and the American Century-Benham Florida
Intermediate-Term Municipal Fund. The statements of changes in net assets and
the financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on the statements of changes in net
assets and the financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the 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. 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, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the changes in net assets of
American Century-Benham Tax-Free Money Market Fund, American Century-Benham
Intermediate-Term Tax-Free Fund, American Century-Benham Long-Term Tax-Free
Fund, American Century-Benham Arizona Intermediate-Term Municipal Fund, American
Century-Benham Florida Municipal Money Market Fund, and American Century-Benham
Florida Intermediate-Term Municipal Fund for the year ended May 31, 1997, and
the financial highlights for the periods stated in the first paragraph above, in
conformity with generally accepted accounting principles.

/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Kansas City, Missouri
July 7, 1997

CONSENT OF

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

American Century Municipal Trust.
American Century Tower
4500 Main Street
Kansas City, Missouri 64111

We hereby consent to the use in this Post-Effective Amendment No. 25 to the
Registration Statement under the Securities Act of 1933 and Post-Effective
Amendment No. 26 to the Registration Statement under the Investment Company Act
of 1940, both on form N-1A, of our report dated November 20, 1996, accompanying
and pertaining to the financial statements of American Century-Benham
Limited-Term Tax-Free Fund, American Century-Benham Intermediate-Term Tax-Free
Fund and the American Century-Benham Long-Term Tax-Free Fund (three of the funds
comprising American Century Municipal Trust) for the three years ended October
31, 1996 and the period March 1, 1993 (inception) through October 31, 1993 for
the American Century-Benham Limited-Term Tax-Free Fund, for the nine years ended
October 31, 1996 and the period March 2, 1987 (inception) through October 31,
1987 for the American Century-Benham Intermediate-Term Tax-Free Fund and the
American Century-Benham Long-Term Tax-Free Fund, which are included in such
Post-Effective Amendments.

/s/Baird, Kurtz & Dobson
Baird, Kurtz & Dobson

Kansas City, Missouri
August 25, 1998

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in Post-Effective Amendment No. 25
to the Registration Statement of the American Century-Benham Florida
Intermediate-Term Municipal Fund, American Century-Benham Florida Municipal
Money Market Fund, American Century-Benham Arizona Intermediate-Term Municipal
Fund, American Century-Benham Tax Free Money Market Fund, American
Century-Benham Limited-Term Tax Free Fund, American Century-Benham
Intermediate-Term Tax Free Fund, American Century-Benham Long-Term Tax Free
Fund, American Century-Benham High-Yield Municipal Fund (eight of the funds
comprising the American Century Municipal Trust ) on Form N-1A of our reports
dated July 16, 1998 on our audits of the financial statements and financial
highlights of the American Century-Benham Florida Intermediate-Term Municipal
Fund, American Century- Benham Florida Municipal Money Market Fund, American
Century-Benham Arizona Intermediate-Term Municipal Fund, American Century-Benham
Tax Free Money Market Fund, American Century-Benham Limited-Term Tax Free Fund,
American Century-Benham Intermediate-Term Tax Free Fund, American Century-Benham
Long-Term Tax Free Fund, American Century-Benham High-Yield Municipal Fund,
which reports are included in the Annual Report to Shareholders for the year
ended May 31, 1998 which are incorporated by reference in Post-Effective
Amendment No. 25 to the Registration Statement. We also consent to the reference
in the Statement of Additional Information to our Firm under the caption
"Independent Accountants."

/s/PricewaterhouseCoopers, LLP
PricewaterhouseCoopers, LLP

Kansas City, Missouri
August 25, 1998

BENHAM ARIZONA INTERMEDIATE MUNI FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
---------------------------------------------------------

One Year $1,000.00 $1,071.90 1.000000 7.19%

Five Year

Ten Year

Inception * $1,000.00 $1,301.10 4.136893 6.57%

TR = Total return for period TR=(ERV/P)-1 30.11%

*Date of Inception: 4/11/94
<PAGE>
BENHAM ARIZONA INTERMEDIATE MUNI FUND
YIELD CALCULATION
5/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = Investment income earned during the period
B = Expenses accrued for the period (net of reimbursements)
C = The average daily number of shares outstanding during the
period that were entitled to receive dividends
D = The per share price on the last day of the period

A = $146,776.33
B = $16,594.99
C = 3,711,702.825
D = $10.67

Yield = 3.98%

<PAGE>
BENHAM FLORIDA INTERMEDIATE MUNI FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
---------------------------------------------------

One Year $1,000.00 $1,082.00 1.000000 8.20%

Five Year

Ten Year

Inception * $1,000.00 $1,314.80 4.136893 6.84%

TR = Total return for period TR=(ERV/P)-1 31.48%

*Date of Inception: 4/11/94
<PAGE>
BENHAM FLORIDA INTERMEDIATE MUNI FUND
YIELD CALCULATION
5/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = $107,304.29
B = $12,062.76
C = 2,756,342.682
D = $10.56

Yield = 3.96%
<PAGE>
BENHAM FLORIDA MUNI MONEY MARKET FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
-------------------------------------------------

One Year $1,000.00 $1,033.10 1.000000 3.31%

Five Year

Ten Year

Inception * $1,000.00 $1,156.90 4.139726 3.58%

TR = Total return for period TR=(ERV/P)-1 15.69%

*Date of Inception: 4/11/94
<PAGE>
BENHAM FLORIDA MUNI MM
YIELD CALCULATION
5/31/98

Effective Yield: [(Base Period Return)+1)^365/7]-1

Base Period Return = 0.00062487

7 Day Effective Yield = 3.31%

Yield: = I/B X 365/7

Y = Yield
I = total income of hypothetical account
over the seven day period
B = beginning account value

I = 0.00062487
B = $1.00

7 Day Yield = 3.26%
<PAGE>
BENHAM TAX FREE MONEY MARKET FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
--------------------------------------------------

One Year $1,000.00 $1,037.00 1.000000 3.70%

Five Year $1,000.00 $1,156.20 5.000000 2.95%

Ten Year $1,000.00 $1,436.10 10.000000 3.69%

Inception * $1,000.00 $1,717.80 13.831622 3.99%

TR = Total return for period TR=(ERV/P)-1 71.78%

*Date of Inception: 7/31/84
<PAGE>
BENHAM TAX FREE MONEY MARKET
YIELD CALCULATION
5/31/98

Effective Yield: [(Base Period Return)+1)^365/7]-1

Base Period Return = 0.0007483

7 Day Effective Yield = 3.98%

Yield: = I/B X 365/7

Y = Yield
I = total income of hypothetical account
over the seven day period
B = beginning account value

I = 0.00074830
B = $1.00
7 Day Yield = 3.90%

<PAGE>
BENHAM HIGH YIELD MUNI FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
-------------------------------------------------

One Year

Five Year

Ten Year

Inception * $1,000.00 $1,018.10 0.167009 11.34%

TR = Total return for period TR=(ERV/P)-1 1.81%

*Date of Inception: 3/31/98
<PAGE>
BENHAM LIMITED TAX FREE FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
----------------------------------------------------

One Year $1,000.00 $1,057.90 1.000000 5.79%

Five Year $1,000.00 $1,250.40 5.000000 4.57%

Ten Year

Inception * $1,000.00 $1,259.90 5.248460 4.50%

TR = Total return for period TR=(ERV/P)-1 25.99%

*Date of Inception: 3/1/93
<PAGE>
BENHAM LIMITED TAX FREE FUND
YIELD CALCULATION
5/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = $131,311.47
B = $15,947.58
C = 3,736,070.401
D = $10.16

Yield = 3.67%

tax-equivalent yield 5.74%
<PAGE>
BENHAM INTERMEDIATE TAX FREE FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
--------------------------------------------------

One Year $1,000.00 $1,076.00 1.000000 7.60%

Five Year $1,000.00 $1,309.40 5.000000 5.54%

Ten Year $1,000.00 $1,868.60 10.000000 6.45%

Inception * $1,000.00 $1,932.10 11.247091 6.03%

TR = Total return for period TR=(ERV/P)-1 93.21%

*Date of Inception: 3/2/87
<PAGE>
BENHAM INTERMEDIATE TAX FREE FUND
YIELD CALCULATION
5/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = $510,701.46
B = $57,096.04
C = 13,057,109.369
D = $10.52

Yield = 4.00%

tax-equivalent yield 6.24%
<PAGE>
BENHAM LONG-TERM TAX FREE FUND
AVERAGE ANNUAL TOTAL RETURN
5/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
-------------------------------------------------

One Year $1,000.00 $1,095.80 1.000000 9.58%

Five Year $1,000.00 $1,373.20 5.000000 6.55%

Ten Year $1,000.00 $2,172.20 10.000000 8.07%

Inception * $1,000.00 $2,200.80 11.247091 7.27%

TR = Total return for period TR=(ERV/P)-1 120.08%

*Date of Inception: 3/2/87
<PAGE>
BENHAM LONG-TERM TAX FREE FUND
YIELD CALCULATION
5/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = $461,562.68
B = $48,045.29
C = 10,701,507.965
D = $10.81

Yield = 4.33%

tax-equivalent yield 6.76%

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, American Century
Municipal Trust, hereinafter called the "Trust", and certain trustees and
officers of the Trust, do hereby constitute and appoint George A. Rio, Douglas
A. Paul, Patrick A. Looby, Charles A. Etherington, and Charles C.S. Park, and
each of them individually, their true and lawful attorneys and agents to take
any and all action and execute any and all instruments which said attorneys and
agents may deem necessary or advisable to enable the Trust to comply with the
Securities Act of 1933 and/or the Investment Company Act of 1940, as amended,
and any rules, regulations, orders, or other requirements of the United States
Securities and Exchange Commission thereunder, in connection with the
registration under the Securities Act of 1933 and/or the Investment Company Act
of 1940, as amended, including specifically, but without limitation of the
foregoing, power and authority to sign the name of the Trust in its behalf and
to affix its seal, and to sign the names of each of such trustees and officers
in their capacities as indicated, to any amendment or supplement to the
Registration Statement filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940, as
amended, and to any instruments or documents filed or to be filed as a part of
or in connection with such Registration Statement; and each of the undersigned
hereby ratifies and confirms all that said attorneys and agents shall do or
cause to be done by virtue hereof.

IN WITNESS WHEREOF, the Trust has caused this Power to be executed by
its duly authorized officers on this the 9th day of July, 1998.

AMERICAN CENTURY MUNICIPAL TRUST

By: /s/George A. Rio
George A. Rio, President

SIGNATURE AND TITLE

/s/ George A. Rio /s/ Ronald J. Gilson
GEORGE A. RIO RONALD J. GILSON
President, Principal Executive Director
and Principal Financial Officer

/s/ Maryanne Roepke /s/ Myron S. Scholes
Maryanne Roepke Myron S. Scholes
Vice President and Treasurer Director

/s/ James E. Stowers III /s/ Kenneth E. Scott
James E. Stowers, III Kenneth E. Scott
Director Director

/s/ William M. Lyons /s/ Isaac Stein
William M. Lyons Isaac Stein
Director Director

/s/ Albert A. Eisenstat /s/ Jeanne D. Wohlers
Albert A. Eisenstat Jeanne D. Wohlers
Director Director

Attest:
By:/s/ Douglas A. Paul
Douglas A. Paul, Secretary

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 1
<NAME> BENHAM TAX-FREE MONEY MARKET FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 451,045,569
<INVESTMENTS-AT-VALUE> 451,045,569
<RECEIVABLES> 2,582,630
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 453,628,199
<PAYABLE-FOR-SECURITIES> 6,837,169
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,514,159
<TOTAL-LIABILITIES> 9,351,328
<SENIOR-EQUITY> 444,257,220
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 444,257,220
<SHARES-COMMON-PRIOR> 194,809,081
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 444,276,871
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,029,894
<OTHER-INCOME> 0
<EXPENSES-NET> 98,536
<NET-INVESTMENT-INCOME> 8,931,358
<REALIZED-GAINS-CURRENT> 19,651
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,931,358
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 786,813,923
<NUMBER-OF-SHARES-REDEEMED> 436,702,980
<SHARES-REINVESTED> 8,415,885
<NET-CHANGE-IN-ASSETS> 358,546,479
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 40,489
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 98,536
<AVERAGE-NET-ASSETS> 242,858,470
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.04
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUNICIPAL FUNDS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 2
<NAME> BENHAM FLORIDA MUNICIPAL MONEY MARKET FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 108,134,815
<INVESTMENTS-AT-VALUE> 108,134,815
<RECEIVABLES> 686,170
<ASSETS-OTHER> 1,020,140
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 109,841,125
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 156,804
<TOTAL-LIABILITIES> 156,804
<SENIOR-EQUITY> 109,684,321
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 109,684,321
<SHARES-COMMON-PRIOR> 80,365,445
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 109,684,321
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,350,020
<OTHER-INCOME> 0
<EXPENSES-NET> 564,438
<NET-INVESTMENT-INCOME> 3,755,691
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,755,691
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 282,351,887
<NUMBER-OF-SHARES-REDEEMED> 288,037,630
<SHARES-REINVESTED> 3,240,863
<NET-CHANGE-IN-ASSETS> (2,444,880)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 564,438
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 594,329
<AVERAGE-NET-ASSETS> 105,653,351
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.03
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUNICIPAL FUNDS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 8
<NAME> AMERICAN CENTURY-BENHAM INTERMEDIATE-TERM TAX-FREE
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 130,744
<INVESTMENTS-AT-VALUE> 136,536
<RECEIVABLES> 3,504
<ASSETS-OTHER> 226
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 140,266
<PAYABLE-FOR-SECURITIES> 1,803
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 556
<TOTAL-LIABILITIES> 2,359
<SENIOR-EQUITY> 131
<PAID-IN-CAPITAL-COMMON> 131,333
<SHARES-COMMON-STOCK> 13,103
<SHARES-COMMON-PRIOR> 12,606
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 651
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,792
<NET-ASSETS> 137,907
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,033
<OTHER-INCOME> 0
<EXPENSES-NET> 401
<NET-INVESTMENT-INCOME> 3,630
<REALIZED-GAINS-CURRENT> 652
<APPREC-INCREASE-CURRENT> 400
<NET-CHANGE-FROM-OPS> 4,682
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,306
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,127
<NUMBER-OF-SHARES-REDEEMED> 1,986
<SHARES-REINVESTED> 301
<NET-CHANGE-IN-ASSETS> 5,491
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 256
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 401
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 403
<AVERAGE-NET-ASSETS> 135,207
<PER-SHARE-NAV-BEGIN> 10.46
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> 0.08
<PER-SHARE-DIVIDEND> 0.28
<PER-SHARE-DISTRIBUTIONS> 0.02
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.52
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUNICIPAL FUNDS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 4
<NAME> BENHAM FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 28,892,654
<INVESTMENTS-AT-VALUE> 29,639,445
<RECEIVABLES> 783,691
<ASSETS-OTHER> 69,088
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,492,224
<PAYABLE-FOR-SECURITIES> 799,746
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 87,266
<TOTAL-LIABILITIES> 887,012
<SENIOR-EQUITY> 28,039
<PAID-IN-CAPITAL-COMMON> 28,698,106
<SHARES-COMMON-STOCK> 2,803,892
<SHARES-COMMON-PRIOR> 1,942,597
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 132,276
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 746,791
<NET-ASSETS> 29,605,210
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,174,999
<OTHER-INCOME> 0
<EXPENSES-NET> 120,693
<NET-INVESTMENT-INCOME> 1,042,897
<REALIZED-GAINS-CURRENT> 397,759
<APPREC-INCREASE-CURRENT> 439,483
<NET-CHANGE-FROM-OPS> 1,880,139
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,042,897
<DISTRIBUTIONS-OF-GAINS> 316,935
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,709,826
<NUMBER-OF-SHARES-REDEEMED> 1,596,282
<SHARES-REINVESTED> 92,680
<NET-CHANGE-IN-ASSETS> 13,092,597
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 315,971
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 120,693
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 132,102
<AVERAGE-NET-ASSETS> 24,366,452
<PER-SHARE-NAV-BEGIN> 10.34
<PER-SHARE-NII> 0.23
<PER-SHARE-GAIN-APPREC> 0.45
<PER-SHARE-DIVIDEND> 0.23
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.56
<EXPENSE-RATIO> 0.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUNICIPAL FUNDS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 5
<NAME> BENHAM ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 38,070,934
<INVESTMENTS-AT-VALUE> 39,303,498
<RECEIVABLES> 1,845,593
<ASSETS-OTHER> 432,584
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 41,581,675
<PAYABLE-FOR-SECURITIES> 1,458,562
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 75,777
<TOTAL-LIABILITIES> 1,534,339
<SENIOR-EQUITY> 37,536
<PAID-IN-CAPITAL-COMMON> 38,693,626
<SHARES-COMMON-STOCK> 3,753,594
<SHARES-COMMON-PRIOR> 3,387,247
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 83,610
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,232,564
<NET-ASSETS> 40,047,336
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,747,687
<OTHER-INCOME> 0
<EXPENSES-NET> 193,887
<NET-INVESTMENT-INCOME> 1,553,800
<REALIZED-GAINS-CURRENT> 247,543
<APPREC-INCREASE-CURRENT> 622,539
<NET-CHANGE-FROM-OPS> 2,423,882
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,553,800
<DISTRIBUTIONS-OF-GAINS> 163,355
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,695,769
<NUMBER-OF-SHARES-REDEEMED> 989,926
<SHARES-REINVESTED> 120,777
<NET-CHANGE-IN-ASSETS> 9,492,773
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 164,412
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 179,507
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 193,887
<AVERAGE-NET-ASSETS> 35,898,750
<PER-SHARE-NAV-BEGIN> 10.44
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 0.28
<PER-SHARE-DIVIDEND> 0.46
<PER-SHARE-DISTRIBUTIONS> 0.05
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.67
<EXPENSE-RATIO> 0.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUNICIPAL TRUST AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 9
<NAME> AMERICAN CENTURY-BENHAM LONG-TERM TAX-FREE
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 109,304
<INVESTMENTS-AT-VALUE> 116,963
<RECEIVABLES> 1,843
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 118,806
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,191
<TOTAL-LIABILITIES> 2,191
<SENIOR-EQUITY> 107
<PAID-IN-CAPITAL-COMMON> 107,534
<SHARES-COMMON-STOCK> 10,784
<SHARES-COMMON-PRIOR> 10,059
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,315
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,659
<NET-ASSETS> 116,615
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,548
<OTHER-INCOME> 0
<EXPENSES-NET> 332
<NET-INVESTMENT-INCOME> 3,216
<REALIZED-GAINS-CURRENT> 1,317
<APPREC-INCREASE-CURRENT> 93
<NET-CHANGE-FROM-OPS> 4,626
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,216
<DISTRIBUTIONS-OF-GAINS> 725
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,424
<NUMBER-OF-SHARES-REDEEMED> 3,507
<SHARES-REINVESTED> 292
<NET-CHANGE-IN-ASSETS> 7,747
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 330
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 332
<AVERAGE-NET-ASSETS> 111,554
<PER-SHARE-NAV-BEGIN> 10.75
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 0.13
<PER-SHARE-DIVIDEND> 0.31
<PER-SHARE-DISTRIBUTIONS> 0.07
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.81
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUNICIPAL FUNDS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000746458
<NAME> AMERICAN CENTURY MUNICIPAL TRUST
<SERIES>
<NUMBER> 7
<NAME> AMERICAN CENTURY-BENHAM LIMITED-TERM TAX-FREE
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 39,226
<INVESTMENTS-AT-VALUE> 39,885
<RECEIVABLES> 1,583
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 41,468
<PAYABLE-FOR-SECURITIES> 1,665
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,393
<TOTAL-LIABILITIES> 3,058
<SENIOR-EQUITY> 38
<PAID-IN-CAPITAL-COMMON> 37,661
<SHARES-COMMON-STOCK> 3,782
<SHARES-COMMON-PRIOR> 3,603
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 52
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 659
<NET-ASSETS> 38,410
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 990
<OTHER-INCOME> 0
<EXPENSES-NET> 112
<NET-INVESTMENT-INCOME> 878
<REALIZED-GAINS-CURRENT> 34
<APPREC-INCREASE-CURRENT> 102
<NET-CHANGE-FROM-OPS> 1,014
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 878
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,208
<NUMBER-OF-SHARES-REDEEMED> 1,106
<SHARES-REINVESTED> 77
<NET-CHANGE-IN-ASSETS> 1,973
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 18
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 112
<AVERAGE-NET-ASSETS> 37,423
<PER-SHARE-NAV-BEGIN> 10.11
<PER-SHARE-NII> 0.24
<PER-SHARE-GAIN-APPREC> 0.05
<PER-SHARE-DIVIDEND> 0.24
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.16
<EXPENSE-RATIO> 0.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 19,935,473
<INVESTMENTS-AT-VALUE> 20,097,685
<RECEIVABLES> 1,341,750
<ASSETS-OTHER> 775,611
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,215,046
<PAYABLE-FOR-SECURITIES> 3,415,679
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,810
<TOTAL-LIABILITIES> 3,427,489
<SENIOR-EQUITY> 18,636
<PAID-IN-CAPITAL-COMMON> 18,624,205
<SHARES-COMMON-STOCK> 1,863,618
<SHARES-COMMON-PRIOR> 1,117,810
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (17,496)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 162,212
<NET-ASSETS> 18,787,557
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 105,829
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 105,829
<REALIZED-GAINS-CURRENT> (17,496)
<APPREC-INCREASE-CURRENT> 162,212
<NET-CHANGE-FROM-OPS> 250,545
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 105,829
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,964,064
<NUMBER-OF-SHARES-REDEEMED> 109,353
<SHARES-REINVESTED> 8,907
<NET-CHANGE-IN-ASSETS> 18,787,557
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 11,578,746
<PER-SHARE-NAV-BEGIN> 9.99
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> 0.09
<PER-SHARE-DIVIDEND> 0.09
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.08
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>