AMERICAN CENTURY MUNICIPAL TRUST, 485BPOS, 1999-09-29

AMERICAN CENTURY MUNICIPAL TRUST
485BPOS, 1999-09-29

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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. 28 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

File No. 811-4025

Amendment No. 29 [X]

(Check appropriate box or boxes.)

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

4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)

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

David C. Tucker, Esq., 4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: October 1, 1999

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[X] on October 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
- --------------------------------------------------------------------------------
<PAGE>
AMERICAN CENTURY

Prospectus

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

OCTOBER 1, 1999
INVESTOR CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by
Funds Distributor, Inc.

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

[inside front cover]

Dear Investor,

Reading a prospectus doesn't have to be a chore. We've done the hard work so
you can focus on what's important--learning about the funds. Take a look inside
and you'll see this prospectus is different from others. It takes a clear-cut
approach to fund information.

Here's what you'll find:

* The funds' primary investments and risks

* A description of who may or may not want to invest in the funds

* Fund performance, including returns for each year, best and worst
quarters and average annual returns compared to the funds' benchmarks

* An overview of ways to best manage your accounts

* Helpful tips and definitions of key investment terms

Whether you're a current investor or investing in mutual funds for the first
time, this prospectus will give you a clear understanding of the funds. If you
have questions, our Investor Services Representatives are available weekdays, 7
a.m. to 7 p.m., and Saturdays, 9 a.m. to 2 p.m., Central time. Our toll-free
number is 1-800-345-2021. We look forward to helping you achieve your financial
goals.

Sincerely,

/*/Mark Killen
Mark Killen
Senior Vice President
American Century Investment Services, Inc.

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

American Century
Investments

P.O. Box 419200
Kansas City, MO
64141-6200

TABLE OF CONTENTS
An Overview of the Funds .................................................. 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 6
Information about the Funds ............................................... 7
Florida Municipal Money Market Fund .................................. 7
Florida Intermediate-Term Municipal Fund ............................. 8
Arizona Intermediate-Term Municipal Fund ............................. 9
Basics of Fixed-Income Investing .......................................... 10
Management ................................................................ 13
Investing with American Century ........................................... 16
Share Price and Distributions ............................................. 20
Taxes ..................................................................... 21
Financial Highlights ...................................................... 23

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Throughout this book you'll find definitions to key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

[graphic of pointing finger]
This symbol highlights special information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUNDS

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

These funds seek high current income and investment returns that are exempt from
regular federal income tax and taxes imposed by Florida or Arizona.

WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The funds invest most of their assets in DEBT SECURITIES issued by cities,
counties and other municipalities, and U.S. territories. Each of the funds
invests in different types of these municipal debt securities and involves
different risks. The chart below shows the primary differences among the funds.
A more detailed description about the funds' investment strategies and risks
begins on page 7.

Fund Primary Investments Principal Risks
- --------------------------------------------------------------------------
Florida Municipal High-quality, Florida economic risk
Money Market very short-term Some credit risk
debt securities
- --------------------------------------------------------------------------
Florida Intermediate-Term Quality debt securities Florida economic risk
Municipal that mature in Credit risk
five to 10 years Interest rate risk
- --------------------------------------------------------------------------
Arizona Intermediate-Term Quality debt securities Arizona economic risk
Municipal that mature in Credit risk
five to 10 years Interest rate risk

As with all funds, at any given time the value of your shares of a fund may be
worth more or less than the price you paid. If you sell shares when the value is
less than the price you paid, you will lose money.

WHO MAY WANT TO INVEST IN THE FUNDS?

The funds may be a good investment if you are

* a Florida or Arizona resident or taxpayer

* seeking current tax-free income

* comfortable with risk based on Florida's or Arizona's economy

* comfortable with the funds' other investment risks

* seeking diversification by investing in a fixed-income mutual fund

WHO MAY NOT WANT TO INVEST IN THE FUNDS?

The funds may not be a good investment if you are

* investing in a IRA or other tax-advantaged retirement plan

* investing for long-term growth

* looking for the added security of FDIC insurance

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DEBT SECURITIES include fixed-income investments such as notes, bonds,
commercial paper and debentures.

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An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Although the Florida Money Market Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in it.

2 American Century Investments 1-800-345-2021

FUND PERFORMANCE HISTORY

FLORIDA MUNICIPAL MONEY MARKET FUND

Annual Total Returns(1)

[bar chart data below]
Florida Municipal Money Market Fund
1998 3.13%
1997 3.39%
1996 3.67%
1995 4.07%

(1) As of June 30, 1999, Florida Municipal Money Market's year-to-date return
was 1.36%.

The highest and lowest quarterly returns for the period reflected in the chart
are:

Highest Lowest
- --------------------------------------------------------------------------------
Florida Municipal Money Market 1.06% (2Q 1995) 0.63% (1Q 1999)

Average Annual Returns

The following table shows the average annual total returns of the fund's
Investor Class shares for the periods indicated. The benchmark is an index of an
independently-selected universe of funds that features an investment objective
similar to the fund's and is included in the table for performance comparison.

For the calendar year ended December 31, 1998 1 year Life of Fund(1)
- ----------------------------------------------------------------------------
Florida Municipal Money Market 3.13% 3.52%
Lipper Other States Tax-Exempt Money Market Funds 3.01% 3.20%(2)

(1) The inception date for the fund is April 11, 1994.

(2) Since April 30, 1994, the date nearest the fund's inception for which data
are available.

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The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

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For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com.

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

Annual Total Returns(1)

[bar chart data below]
Florida Intermediate-Term Municipal Fund
1998 6.49%
1997 8.22%
1996 3.66%
1995 13.49%

(1) As of June 30, 1999, Florida Intermediate-Term Municipal's year-to-date
return was -1.01%.

The highest and lowest quarterly returns for the period reflected in the chart
are:

Highest Lowest
- --------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 5.06% (1Q 1995) -1.63% (2Q 1999)

Average Annual Returns

The following table shows the average annual total returns of the fund's
Investor Class shares for the periods indicated. The benchmark is an unmanaged
index that has no operating costs and is included in the table for performance
comparison.

For the calendar year ended December 31, 1998 1 year Life of Fund(1)
- --------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 6.49% 6.92%
Lehman 5-Year General Obligation Index 5.84% 6.25%(2)

(1) The inception date for Florida Intermediate-Term Municipal is April 11,
1994.

(2) Since April 30, 1994, the date nearest the fund's inception for which data
are available.

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[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com

4 American Century Investments 1-800-345-2021

FUND PERFORMANCE HISTORY

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND

Annual Total Returns(1)

Arizona Intermediate-Term Municipal Fund
1998 5.90%
1997 6.90%
1996 3.74%
1995 13.15%

(1) As of June 30, 1999, Arizona Intermediate-Term Municipal's year-to-date
return was -1.04%.

The highest and lowest quarterly returns for the period reflected in the chart
are:

Highest Lowest
- --------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 4.60% (1Q 1995) -1.63% (2Q 1999)

Average Annual Returns

For the calendar year ended December 31, 1998 1 year Life of Fund(1)
- --------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 5.90% 6.66%
Lehman 5-Year General Obligation Index 5.84% 6.25%(2)

(1) The inception date for Arizona Intermediate-Term Municipal is April 11,
1994.

(2) Since April 30, 1994, the date nearest the fund's inception for which data
are available.

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[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com

www.americancentury.com American Century Investments 5

FEES AND EXPENSES

There are no sales loads, fees or other charges

* to buy fund shares directly from American Century

* to reinvest dividends in additional shares

* to exchange into the Investor Class shares of other American Century funds

* to redeem your shares

The following table describes the fees and expenses that you will pay if you buy
and hold shares of the funds.

<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>

Florida Municipal Money Market 0.49% None 0.01% 0.50%
- ----------------------------------------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 0.50% None 0.01% 0.51%
- ----------------------------------------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 0.50% None 0.01% 0.51%
</TABLE>

(1) Based on expenses incurred during the funds' most recent fiscal year. The
funds have a stepped fee schedule. As a result, the funds' management fee
rate generally decreases as fund assets increase.

(2) Other expenses include the fees and expenses of the funds' independent
trustees, their legal counsel and interest.

EXAMPLES

The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .

* invest $10,000 in the fund

* redeem all of your shares at the end of the periods shown below

* earn a 5% return each year

* incur the same operating expenses shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------
Florida Municipal Money Market $51 $160 $279 $627
- ------------------------------------------------------------------------------
Florida Intermediate-Term Municipal $52 $163 $285 $640
- ------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal $52 $163 $285 $640

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Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.

6 American Century Investments 1-800-345-2021

INFORMATION ABOUT THE FUNDS

FLORIDA MUNICIPAL MONEY MARKET FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Florida Municipal Money Market seeks safety of principal and high current income
that is exempt from federal income tax and seeks to be exempt from the Florida
intangible personal property tax.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers buy cash-equivalent, HIGH-QUALITY DEBT SECURITIES with income
payments exempt from federal income tax and which are exempt from the Florida
intangible personal property tax. Cities, counties and other municipalities in
Florida usually issue these securities for public projects, such as schools and
roads.

The fund managers also may buy cash-equivalent, high-quality debt securities
with income payments exempt from federal income tax and which are exempt from
the Florida intangible personal property tax, but are not exempt from the
federal alternative minimum tax. Cities, counties and other municipalities in
Florida usually issue these securities (called private activity bonds) to fund
for-profit private projects, such as hospitals and athletic stadiums.

Additional information about the fund's investments is available in its annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent six-month period. You may get these
reports at no cost by calling us.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?

Because cash-equivalent securities are among the safest securities available,
the interest they pay is among the lowest for income-paying securities.
Accordingly, the yield on this fund will likely be lower than funds that invest
in longer-term or lower-quality securities.

Because the fund invests primarily in Florida municipal securities, it will be
sensitive to events that affect Florida's economy. Florida Municipal Money
Market may have a higher level of risk than funds that invest in a larger
universe of securities.

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Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

A HIGH-QUALITY DEBT SECURITY is one that has been determined to be in the top
two credit quality categories. This can be established in a number of ways. For
example, independent rating agencies may rate the security in their higher
rating categories. The fund's advisor also can analyze an unrated security to
determine if its credit quality is high enough for investment. The details of
the fund's credit quality standards are described in the Statement of Additional
Information.

www.americancentury.com American Century Investments 7

FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Florida Intermediate-Term Municipal seeks safety of principal and high current
income that is exempt from federal income tax and seeks to be exempt from the
Florida intangible personal property tax.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers buy intermediate-term, QUALITY DEBT SECURITIES with income
payments exempt from federal income tax and which are exempt from the Florida
intangible personal property tax. Cities, counties and other municipalities in
Florida usually issue these securities for public projects, such as schools and
roads.

The fund managers also may buy intermediate-term, quality debt securities with
income payments exempt from federal income tax and which are exempt from the
Florida intangible personal property tax, but are not exempt from the federal
alternative minimum tax. Cities, counties and other municipalities in Florida
usually issue these securities (called private activity bonds) to fund
for-profit private projects, such as hospitals and athletic stadiums.

The fund managers also may use futures contracts and options to pursue the
fund's investment objectives.

In the event of exceptional market or economic conditions, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or cash- equivalent securities. To the extent a fund assumes a defensive
position, it will not be pursuing its investment objectives and may generate
taxable income.

The WEIGHTED AVERAGE MATURITY of the fund is expected to be between five and 10
years.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

When interest rates change, the fund's share value will be affected. Generally,
when interest rates rise, the fund's share value will decline. The opposite is
true when interest rates decline. The interest rate risk is higher for Florida
Intermediate-Term Municipal than for funds that have shorter weighted average
maturities, such as money market and short-term bond funds.

The fund may invest part of its assets in securities rated in the lowest
investment-grade category (for example, Baa or BBB). The issuers of these
securities are more likely to pose a credit risk, that is, to have problems
making interest and principal payments.

Because the fund invests primarily in Florida municipal securities, it will be
sensitive to events that affect Florida's economy. Florida Intermediate-Term
Municipal may have a higher level of risk than funds that invest in a larger
universe of securities.

As with all funds, at any given time the value of your shares of Florida
Intermediate-Term Municipal may be worth more or less than the price you paid.
If you sell your shares when the value is less than the price you paid, you will
lose money.

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Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

A QUALITY DEBT SECURITY is one that has been determined to be in the top four
credit quality categories. This can be established in a number of ways. For
example, independent rating agencies may rate the security in their higher
rating categories. The fund's advisor also can analyze an unrated security to
determine if its credit quality is high enough for investment. The details of
the fund's credit quality standards are described in the Statement of Additional
Information.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate a
fund's interest rate sensitivity. For more information, see "Weighted Average
Maturity" in this Prospectus.

8 American Century Investments 1-800-345-2021

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Arizona Intermediate-Term Municipal seeks safety of principal and high current
income that is exempt from federal and Arizona income taxes.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers buy intermediate-term, QUALITY DEBT SECURITIES with income
payments exempt from federal and Arizona income taxes. Cities, counties and
other municipalities in Arizona usually issue these securities for public
projects, such as schools and roads.

The fund managers also may buy intermediate-term, quality debt securities with
income payments exempt from federal and Arizona income taxes, but are not exempt
from the federal alternative minimum tax. Cities, counties and other
municipalities in Arizona usually issue these securities (called private
activity bonds) to fund for-profit private projects, such as hospitals and
athletic stadiums.

The fund managers also may use futures contracts and options to pursue the
fund's investment objectives.

In the event of exceptional market or economic conditions, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or cash-equivalent securities. To the extent a fund assumes a defensive
position, it will not be pursuing its investment objectives and may generate
taxable income.

The WEIGHTED AVERAGE MATURITY of the fund is expected to be between five and 10
years.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

When interest rates change, the fund's share value will be affected. Generally,
when interest rates rise, the fund's share value will decline. The opposite is
true when interest rates decline. The interest rate risk is higher for Arizona
Intermediate-Term Municipal than for funds which have shorter weighted average
maturities, such as money market and short-term bond funds.

Because the fund invests primarily in Arizona municipal securities, it will be
sensitive to events that affect Arizona's economy. Arizona Intermediate-Term
Municipal may have a higher level of risk than funds that invest in a larger
universe of securities.

As with all funds, at any given time the value of your shares of Arizona
Intermediate-Term Municipal may be worth more or less than the price you paid.
If you sell your shares when the value is less than the price you paid, you will
lose money.

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[graphic of pointing finger]

Income from the funds may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate a
fund's interest rate sensitivity. For more information, see "Weighted Average
Maturity" in this Prospectus.

www.americancentury.com American Century Investments 9

BASICS OF FIXED-INCOME INVESTING

DEBT SECURITIES

When a fund buys a debt security, which is also called a fixed-income security,
it is essentially lending money to the issuer of the security. Notes, bonds,
commercial paper and Treasury bills are examples of debt securities. After the
debt security is first sold by the issuer, it may be bought and sold by other
investors. The price of the security may rise or fall based on many factors,
including changes in interest rates, inflation, liquidity and credit quality.

The fund managers decide which debt securities to buy and sell by

* determining which securities help a fund meet its maturity requirements

* eliminating securities that do not satisfy a fund's credit quality standards

* evaluating the current economic conditions and assessing the risk of
inflation

* evaluating special features of the securities that may make them more or less
attractive

WEIGHTED AVERAGE MATURITY

Like most loans, debt securities eventually must be repaid (or refinanced) at
some date. This date is called the maturity date. The number of days left to a
debt security's maturity date is called the remaining maturity. The longer a
debt security's remaining maturity, generally the more sensitive it is to
changes in interest rates.

Because a bond fund will own many debt securities, the fund managers calculate
the average of the remaining maturities of all of the debt securities the fund
owns to evaluate the interest rate sensitivity of the entire portfolio. This
average is weighted according to the size of the fund's individual holdings and
is called WEIGHTED AVERAGE MATURITY. The following chart shows how fund managers
would calculate the weighted average maturity for a fund that owned only two
debt securities.

<TABLE>
Amount of Percent of Remaining Weighted
Security Owned Portfolio Maturity Maturity
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Security A $100,000 25% 1,000 days 250 days
- ------------------------------------------------------------------------------------
Debt Security B $300,000 75% 10,000 days 7,500 days
- ------------------------------------------------------------------------------------
Weighted Average Maturity 7,750 days
</TABLE>

TYPES OF RISK

The basic types of risk that the funds face are described below.

Interest Rate Risk

Generally, interest rates and the prices of debt securities move in opposite
directions. When interest rates fall, the prices of most debt securities rise;
when interest rates rise, prices fall. Because the funds invest primarily in
debt securities, changes in interest rates will affect the funds' performance.

The degree to which interest rate changes affect the funds' performance varies
and is related to the weighted average maturity of a particular fund. For
example, when interest rates rise, you can expect the share value of a long-term
bond fund to fall more than that of a short-term bond fund. When rates fall, the
opposite is true. This sensitivity to interest rate changes is called interest
rate risk.

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The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate
the remaining maturity of a fund's investment portfolio.

10 American Century Investments 1-800-345-2021

When interest rates change, longer maturity bonds generally experience a greater
change in price. The following table shows the likely effect of a 1% increase in
interest rates on the price of 7% coupon bonds of differing maturities:

<TABLE>

Remaining Maturity Current Price Price after 1% Increase Change in Price
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
- --------------------------------------------------------------------------------
3 years $100.00 $97.38 -2.62%
- --------------------------------------------------------------------------------
10 years $100.00 $93.20 -6.80%
- --------------------------------------------------------------------------------
30 years $100.00 $88.69 -11.31%
</TABLE>

Credit Risk

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the rating
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and be able to make interest and principal
payments on time. Generally, a lower credit rating indicates a greater risk of
non-payment. A lower rating also may indicate that the issuer has a more senior
series of debt securities, which means that if the issuer has difficulties
making its payments, the more senior series of debt is first in line for
payment.

It's not as simple as buying the highest-rated debt securities. Higher credit
ratings usually mean lower interest rate payments, so investors often purchase
securities that aren't the highest rated to increase return. If a fund purchases
lower-rated securities, it has assumed additional credit risk.

The following chart shows the authorized credit quality ranges for the funds
offered by this Prospectus.

<TABLE>
- ------------------------------------------------------------
Quality
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------
High Quality
- ---------------------------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- -----------------------------------------------------------------------------------------------------------
Florida Municipal Money Market X X
- ------------------------------------------------------------- -----------------------------------------
Florida Intermediate-Term
Municipal X X X X
- ------------------------------------------------------------- -----------------------------------------
Arizona Intermediate-Term
Municipal X X X X
- ------------------------------------------------------------- -----------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- ------------------------------------------------------------- -----------------------------------------
</TABLE>

Securities rated in one of the highest four categories by a nationally
recognized securities rating organization (e.g., Moody's or Standard & Poor's)
are considered "investment grade." Although they are considered investment
grade, an investment in these securities still involves some credit risk since a
AAA rating is not a guarantee of payment. For a complete description of the
ratings system, see "Explanation of Fixed-Income Securities Ratings" in the
Statement of Additional Information. The funds' credit quality restrictions
apply at the time of purchase; the fund will not necessarily sell securities if
they are downgraded by a rating agency.

Liquidity Risk

Debt securities can become difficult to sell, or less liquid, for a variety of
reasons, such as lack of an active trading market. The chance that a fund will
have liquidity issues is called liquidity risk.

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Credit quality may be lower when the issuer has
* a high debt level
* a short operating history
* a senior level of debt
* a difficult, competitive environment
* a less stable cash flow

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The Statement of Additional Information provides a detailed description of these
securities ratings.

www.americancentury.com American Century Investments 11

Inflation Risk

The safest investments usually have the lowest potential income and performance.
During periods of high inflation, shorter-term, fixed-income investments
typically perform better. This reflects the high short-term demand for money
when inflation is high. The risk that your short-term performance will suffer
during periods of high inflation is called inflation risk.

A COMPARISON OF BASIC RISK FACTORS

The following chart depicts the basic risks of investing in the funds. It is
designed to help you compare these funds with each other; it shouldn't be used
to compare these funds with other mutual funds.

<TABLE>
Interest Rate Credit Liquidity Inflation
Risk Risk Risk Risk
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida Municipal Money Market Lowest Lowest Lowest Lowest
- ----------------------------------------------------------------------------------------
Florida Intermediate-Term Municipal Medium Medium Medium Medium
- ----------------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal Medium Medium Medium Medium
</TABLE>

The funds engage in a variety of investment techniques as they pursue their
investment objectives. Each technique has its own characteristics, and may pose
some level of risk to the funds. If you would like to learn more about these
techniques, you should review the Statement of Additional Information before
making an investment.

12 American Century Investments 1-800-345-2021

MANAGEMENT

WHO MANAGES THE FUNDS?

The Board of Trustees, investment advisor and fund management team play key
roles in the management of the funds.

THE BOARD OF TRUSTEES

The Board of Trustees oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Trustees does not manage the funds, it has hired an investment advisor to do so.
More than two-thirds of the trustees are independent of the funds' advisor; that
is, they are not employed by and have no financial interest in the advisor.

THE INVESTMENT ADVISOR

The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958. American Century is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.

The advisor is responsible for managing the investment portfolios of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.

For the services it provided to the funds during their most recent fiscal year,
the advisor received a unified management fee based on a percentage of the
average net assets of the Investor Class shares of the funds. The rate of the
management fee for a fund is determined on a class-by-class basis monthly using
a two-step formula that takes into account the fund's strategy (money market,
bond or equity) and the total amount of mutual fund assets the advisor manages.

The Statement of Additional Information contains detailed information about the
calculation of the management fee. Out of that fee, the advisor paid all
expenses of managing and operating the fund except brokerage expenses, taxes,
interest, fees and expenses of the independent directors (including legal
counsel fees), and extraordinary expenses. A portion of the management fee may
be paid by the funds' advisor to unaffiliated third parties who provide
recordkeeping and administrative services that would otherwise be performed by
an affiliate of the advisor.

Management Fees Paid by the Funds to the Advisor as a Percentage of Average Net
Assets for the Most Recent Fiscal Year Ended May 31, 1999
- ---------------------------------------------------------------------------
Florida Municipal Money Market 0.49%
- ---------------------------------------------------------------------------
Florida Intermediate-Term Municipal 0.50%
- ---------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 0.50%

www.americancentury.com American Century Investments 13

THE FUND MANAGEMENT TEAM

The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. Teams meet regularly to review portfolio holdings
and to discuss purchase and sale activity. Team members buy and sell securities
for a fund as they see fit, guided by the fund's investment objective and
strategy.

The portfolio managers who lead the investment teams are identified below:

BRYAN E. KARCHER
Mr. Karcher, Portfolio Manager, has been a member of the team that manages
Florida Municipal Money Market since June 1995. He joined American Century in
July 1989 and has been a Portfolio Manager since June 1995. He holds a
bachelor's degree in economics from the University of California-Los Angeles. He
is a Chartered Financial Analyst.

KENNETH M. SALINGER
Mr. Salinger, Portfolio Manager, has been a member of the team that manages
Arizona Intermediate-Term Municipal team since June 1998 and the Florida
Intermediate-Term Municipal team since October 1996. He joined American Century
in April 1992. He has a bachelor's degree in quantitative economics from the
University of California-San Diego. He is a Chartered Financial Analyst.

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CODE OF ETHICS
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or from profiting from the purchase and sale of the same security within 60
calendar days. In addition, the Code of Ethics requires portfolio managers and
other employees with access to information about the purchase or sale of
securities by the funds to obtain approval before executing permitted personal
trades.

14 American Century Investments 1-800-345-2021

FUNDAMENTAL INVESTMENT POLICIES

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Trustees may change any other policies
and investment strategies.

YEAR 2000 ISSUES

Many of the world's computer systems were originally programmed in a way that
prevented them from properly recognizing or processing 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 the provision of shareholder services, may be hampered.

In addition, the issuers of securities the funds own could have Year 2000
computer problems. Municipal issuers may be more susceptible to such problems
than other issuers. These problems could negatively affect the value of their
securities, which, in turn, could impact the funds' performance. The advisor 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 fund managers may consider when making investment decisions, and other
factors may receive greater weight.

www.americancentury.com American Century Investments 15

INVESTING WITH AMERICAN CENTURY

SERVICES AUTOMATICALLY AVAILABLE TO YOU

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

CONDUCTING BUSINESS IN WRITING

If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose this option, you must provide written
instructions to invest, exchange and redeem. All account owners must sign
transaction instructions (with signatures guaranteed for redemptions in excess
of $100,000). If you want to add services later, you can complete an Investor
Service Options form.

WAYS TO MANAGE YOUR ACCOUNT
- --------------------------------------------------------------------------------

BY TELEPHONE

Investor Relations
1-800-345-2021

Business, Not-For-Profit and
Employer-Sponsored
Retirement Plans
1-800-345-3533

Automated Information Line
1-800-345-8765

[graphic of telephone]

OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES
Call us or use our Automated Information Line if you have authorized us to
accept telephone instructions.

MAKE ADDITIONAL INVESTMENTS
Call us or use our Automated Information Line if you have authorized us to
invest from your bank account.

SELL SHARES
Call an Investor Relations Representative.

- --------------------------------------------------------------------------------
BY MAIL OR FAX
P.O. Box 419200 Kansas City, MO 64141-6200

Fax
816-340-7962

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OPEN AN ACCOUNT
Send a signed, completed application and check or money order payable to
American Century Investments.

EXCHANGE SHARES
Send us written instructions to exchange your shares from one American Century
account to another.

MAKE ADDITIONAL INVESTMENTS
Send us your check or money order for at least $50 with an investment slip or
$250 without an investment slip. If you don't have an investment slip, include
your name, address and account number on your check or money order.

SELL SHARES
Send us written instructions or a redemption form to sell shares. Call an
Investor Relations Representative to request a form.

- --------------------------------------------------------------------------------
ONLINE
www.americancentury.com

[graphic of computer]

OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES
Exchange shares from another American Century account.

MAKE ADDITIONAL INVESTMENTS
Make an additional investment into an established American Century account if
you have authorized us to invest from your bank account.

SELL SHARES
Not available.

16 American Century Investments 1-800-345-2021

A NOTE ABOUT MAILINGS TO SHAREHOLDERS

To reduce expenses and demonstrate respect for our environment, we will deliver
most financial reports, prospectuses and account statements to households in a
single envelope, even if the accounts are registered under different names. If
you would like additional copies of financial reports and prospectuses or
separate mailing of account statements, please call us.

YOUR GUIDE TO SERVICES AND POLICIES

When you open an account, you will receive a services guide, which explains the
services available to you and the policies of the funds and the transfer agent.

- --------------------------------------------------------------------------------
BY WIRE

[graphic of pointing finger]

Please remember that if you request redemptions by wire, $10 will be deducted
from the amount wired. Your bank also may charge a fee.

[graphic of wire machine]

OPEN AN ACCOUNT
Call us to set up your account or mail a completed application to the address
provided in the "By mail" section and give your bank the following information

* Our bank information:
Commerce Bank N.A.
Routing No. 101000019
Account No. 2804918
* The fund name
* Your American Century account number+
* Your name
* The contribution year (for IRAs only)

+ For additional investments only

MAKE ADDITIONAL INVESTMENTS
Follow the wire instructions provided in the "Open an account" section

SELL SHARES
You can receive redemption proceeds by wire or electronic transfer.

EXCHANGE SHARES Not available.

- --------------------------------------------------------------------------------
AUTOMATICALLY

[graphic of revolving arrows]

OPEN AN ACCOUNT
Not available.

EXCHANGE SHARES
Send us written instructions to set up an automatic exchange of your shares from
one American Century account to another.

MAKE ADDITIONAL INVESTMENTS
With the automatic investment privilege, you can purchase shares on a regular
basis. You must invest at least $600 per year per account.

SELL SHARES
If you have at least $10,000 in your account, you may sell shares automatically
by establishing Check-A-Month or Automatic Redemption plans.

- --------------------------------------------------------------------------------
IN PERSON
{graphic of person]

If you prefer to handle your transactions in person, visit one of our Investor
Centers and a representative can help you open an account, make additional
investments and sell or exchange shares.

4500 Main St.
Kansas City, Missouri
8 a.m. to 5:30 p.m., Monday - Friday

1665 Charleston Road
Mountain View, California
8 a.m. to 5 p.m., Monday - Friday

4917 Town Center Drive
Leawood, Kansas
8 a.m. to 6 p.m., Monday -- Friday
8 a.m. to noon, Saturday

9445 East County Line Road, Suite A
Englewood, Colorado
8 a.m. to 6 p.m., Monday- Friday
8 a.m. to noon, Saturday

www.americancentury.com American Century Investments 17

<TABLE>
MINIMUM INITIAL INVESTMENT AMOUNTS(1)

Florida Municipal
To open an account the minimum investments are as follows: Money Market Other Funds
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Individual or Joint $2,500 $5,000
- ---------------------------------------------------------------------------------------
UGMA/UTMA $2,500 $5,000
</TABLE>

(1) The funds in this Prospectus are not available for retirement accounts.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

If your redemption activity causes your account balance to fall below the
minimum initial investment amount, we will notify you and give you 90 days to
meet the minimum. If you do not meet the deadline, American Century will redeem
the shares in the account and send the proceeds to your address of record.

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds -- up to seven days -- or to honor
certain redemptions with securities, rather than cash, as described in the next
section.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the assets of the fund if that percentage is less than $250,000), we
reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of cash. If we make payment
in securities, we will value the securities selected by the fund managers in the
same manner as we do in computing the fund's net asset value. We may provide
these securities in lieu of cash without prior notice.

If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us with an unconditional instruction to
redeem at least 15 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. This minimizes the effect of the
redemption on the fund and its remaining shareholders.

18 American Century Investments 1-800-345-2021

INVESTING THROUGH FINANCIAL INTERMEDIARIES

If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include

* minimum investment requirements

* exchange policies

* fund choices

* cutoff time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statements of Additional Information are available from your
intermediary or plan sponsor.

Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.

Although transactions in fund shares may be made directly with American Century
at no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.

American Century has contracts with certain financial intermediaries requiring
them to track the time investment orders are received and to comply with
procedures relating to the transmission of orders. The funds have authorized
those intermediaries to accept orders on each fund's behalf up to the time at
which the net asset value is determined. If those orders are transmitted to
American Century and paid for in accordance with the contract, they will be
priced at the net asset value next determined after your request is received in
the form required by the intermediary on a fund's behalf.

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Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.

www.americancentury.com American Century Investments 19

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the funds as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

If current market prices of securities owned by a fund (except Florida Municipal
Money Market) are not readily available, the advisor may determine their fair
value in accordance with procedures adopted by the fund's Board of Trustees. The
portfolio securities of Florida Municipal Money Market are valued at amortized
cost. This means that the securities are initially valued at their cost when
purchased. After the initial purchase, the difference between the purchase price
and the known value at maturity will be reduced at a constant rate until
maturity. This valuation will be used regardless of the impact of interest rates
on the market value of the security. The Board has adopted procedures to ensure
that this type of pricing is fair to the fund's shareholders.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

DISTRIBUTIONS

Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the funds will not be subject to state
or federal income tax on amounts distributed. The distributions generally
consist of dividends and interest received, as well as CAPITAL GAINS realized on
the sale of investment securities.

Florida Municipal Money Market declares and reinvests distributions from net
income daily. Each of the other funds declares distributions from net income
daily and pays these distributions monthly. Each fund (except Florida Municipal
Money Market) generally pays distributions of capital gains, if any, once a year
usually in December. A fund may make more frequent distributions if necessary to
comply with Internal Revenue Code provisions. Distributions are reinvested
automatically in additional shares unless you choose another option.

You will participate in fund distributions, when they are declared, starting on
the day after your purchase is effective. For example, if you purchase shares on
a day that a distribution is declared, you will not receive that distribution.
If you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any distribution received with
your redemption proceeds.

Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
our services guide for further information regarding distributions and your
distribution options.

[left margin]

The NET ASSET VALUE of a fund is the price of the fund's shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

20 American Century Investments 1-800-345-2021

TAXES

Tax-Exempt Income

Most of the income that the funds receive from municipal securities is exempt
from regular federal income taxes. Distributions from Arizona Intermediate-Term
Municipal will also be exempt from Arizona income taxes. Shares of Florida
Municipal Money Market and Florida Intermediate-Term Municipal will also
generally be exempt from the Florida intangible personal property tax. However,
corporate shareholders should be aware that distributions may be subject to
state corporate franchise tax.

The funds may also purchase private activity bonds. The income from these
securities is subject to the federal alternative minimum tax. If you are subject
to the alternative minimum tax, then distributions from the funds that represent
income derived from private activity bonds is taxable to you. Consult your tax
advisor to determine whether you are subject to the alternative minimum tax.

Taxable Income

The funds' investment performance also is based on sources other than income
from municipal securities. These investment performance sources, while not the
primary source of fund distributions, will generate taxable income to you. Some
of these investment performance sources are

* Market Discount Purchases. The funds may buy a tax-exempt security for a price
less than the principal amount of the bond. If the price of the bond increases
over time, a portion of the gain may be treated as ordinary income and taxable
as ordinary income if it is distributed to shareholders.

* Capital Gains. When a fund sells a security, even a tax-exempt municipal
security, it can generate a capital gain or loss, which you must report on your
tax return.

* Temporary Investments. Some temporary investments, such as securities loans
and repurchase agreements, can generate taxable income.

<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
- ---------------------------------------------------------------------------------------
Long-term capital gains 10% 20%
</TABLE>

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distribution in
additional shares or take them in cash. American Century will send you the tax
status of fund distributions for each calendar year in an annual tax mailing
(Form 1099-DIV) from the fund.

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

[left margin]
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BUYING A DIVIDEND

Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.

The risk in buying a dividend is that a fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. We distribute those gains to you, after subtracting any losses, even
if you did not own the shares when the gains occurred.

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

www.americancentury.com American Century Investments 21

Taxes on Transactions

Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that 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
gain and disallowed to the extent of any distribution of tax-exempt income to
you with respect to those shares. 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. This may result in a postponement of the recognition of such loss
for federal income tax purposes.

If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and remit 31% of dividends, capital
gains distributions and redemptions to the IRS.

22 American Century Investments 1-800-345-2021

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

The tables on the next few pages itemize what contributed to the changes in
share price during the period. They also show the changes in share price for
this period in comparison to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, each table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

Each table also includes some key statistics for the period as appropriate

* TOTAL RETURN --the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* EXPENSE RATIO --operating expenses as a percentage of average net assets

* NET INCOME RATIO --net investment income as a percentage of average net
assets

* PORTFOLIO TURNOVER --the percentage of the fund's buying and selling activity

The Financial Highlights for the fiscal years ended May 31, 1998, and 1999, have
been audited by PricewaterhouseCoopers LLP, independent accountants. Their
report is included in the funds' annual reports, which are incorporated by
reference into the Statement of Additional Information, and are available upon
request. Prior years' information was audited by other independent auditors,
whose report also is incorporated by reference into the Statement of Additional
Information.

www.americancentury.com American Century Investments 23

<TABLE>

FLORIDA MUNICIPAL MONEY MARKET FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995
<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 0.03 0.04 0.04
----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income .................. (0.03) (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(1) ............................. 2.92% 3.31% 3.55% 3.86% 3.71%

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses to
Average Net Assets (Before Expense Waiver) .... 0.50% 0.53% 0.66% 0.71% 0.88%

Ratio of Operating Expenses
to Average Net Assets ......................... 0.50% 0.51% 0.12% 0.01% --

Ratio of Net Investment Income to
Average Net Assets (Before Expense Waiver) .... 2.88% 3.23% 2.94% 3.05% 3.05%

Ratio of Net Investment Income
to Average Net Assets ......................... 2.88% 3.25% 3.48% 3.75% 3.93%

Net Assets, End of Period (in thousands) ...... $ 87,509 $ 109,684 $ 112,129 $ 99,993 $ 45,147

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

24 American Century Investments 1-800-345-2021

FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995

Net Asset Value, Beginning of Period ........$ 10.56 $ 10.34 $ 10.18 $ 10.30 $ 10.11
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income ..................... 0.44 0.45 0.46 0.52 0.52
Net Realized and Unrealized Gain (Loss)
on Investment Transactions ................ 0.05 0.38 0.20 (0.08) 0.19
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .......... 0.49 0.83 0.66 0.44 0.71
---------- ---------- ---------- ---------- ----------
Distributions
From Net Investment Income ................ (0.44) (0.45) (0.46) (0.52) (0.52)
From Net Realized Capital Gains ........... (0.11) (0.16) (0.04) (0.04) --
---------- ---------- ---------- ---------- ----------
Total Distributions ....................... (0.55) (0.61) (0.50) (0.56) (0.52)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ..............$ 10.50 $ 10.56 $ 10.34 $ 10.18 $ 10.30
========== ========== ========== ========== ==========
Total Return(1) ........................... 4.71% 8.20% 6.63% 4.34% 7.31%

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses
to Average Net Assets ....................... 0.51% 0.54% 0.65% 0.13% --

Ratio of Operating Expenses to Average
Net Assets (Before Expense Waiver) .......... 0.51% 0.58% 0.86% 0.88% 1.09%

Ratio of Net Investment Income
to Average Net Assets ....................... 4.13% 4.28% 4.42% 5.05% 5.23%

Ratio of Net Investment Income to
Average Net Assets (Before Expense Waiver) .. 4.13% 4.24% 4.21% 4.30% 4.14%

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

Net Assets, End of Period (in thousands) ....$ 44,379 $ 29,605 $ 16,513 $ 10,319 $ 9,532

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

www.americancentury.com American Century Investments 25

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995

Net Asset Value, Beginning of Period ........$ 10.67 $ 10.44 $ 10.31 $ 10.35 $ 10.13
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income ..................... 0.46 0.46 0.45 0.51 0.51
Net Realized and Unrealized Gain (Loss)
on Investment Transactions ................ 0.01 0.28 0.13 (0.03) 0.22
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .......... 0.47 0.74 0.58 0.48 0.73
---------- ---------- ---------- ---------- ----------
Distributions
From Net Investment Income ................ (0.46) (0.46) (0.45) (0.51) (0.51)
From Net Realized Gains
on Investment Transactions ................ (0.06) (0.05) -- (0.01) --
---------- ---------- ---------- ---------- ----------
Total Distributions ....................... (0.52) (0.51) (0.45) (0.52) (0.51)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ..............$ 10.62 $ 10.67 $ 10.44 $ 10.31 $ 10.35
========== ========== ========== ========== ==========
Total Return(1) ........................... 4.51% 7.19% 5.77% 4.65% 7.52%

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses to
Average Net Assets (Before Expense Waiver) .. 0.51% 0.60% 0.79% 0.82% 1.01%

Ratio of Operating Expenses
to Average Net Assets ....................... 0.51% 0.54% 0.66% 0.14% --

Ratio of Net Investment Income to
Average Net Assets (Before Expense Waiver) .. 4.30% 4.27% 4.22% 4.17% 4.15%

Ratio of Net Investment Income
to Average Net Assets ....................... 4.30% 4.33% 4.35% 4.85% 5.16%

Portfolio Turnover Rate ..................... 70% 39% 81% 36% 33%

Net Assets, End of Period (in thousands) ....$ 45,410 $ 40,047 $ 30,555 $ 25,789 $ 19,778

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

</TABLE>

26 American Century Investments 1-800-345-2021

NOTES

www.americancentury.com American Century Investments 27

NOTES

28 American Century Investments 1-800-345-2021

NOTES

www.americancentury.com American Century Investments 29

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

Annual and Semiannual Reports

These reports contain more information about the funds' investments and the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period.

Statement of Additional Information

The SAI contains a more detailed, legal description of the funds' operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.

You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.

You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location
and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the
documents.)

Investment Company Act File No. 811-4025

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-345-2021 or 816-531-5575

9910
SH-PRS-17436
<PAGE>
AMERICAN CENTURY

Prospectus

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

OCTOBER 1, 1999
INVESTOR CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by
Funds Distributor, Inc.

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

Dear Investor,

Here's what you'll find:

* The funds' primary investments and risks

* A description of who may or may not want to invest in the funds

* Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the funds' benchmarks

* An overview of ways to best manage your accounts

* Helpful tips and definitions of key investment terms

Sincerely,

/*/Mark Killen
Mark Killen
Senior Vice President
American Century Investment Services, Inc.

[Left Margin]

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

American Century
Investments

P.O. Box 419200
Kansas City, MO
64141-6200

TABLE OF CONTENTS

An Overview of the Funds .................................................. 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 6
Information about the Funds ............................................... 7
New York Municipal Money Market Fund ................................. 7
Florida Municipal Money Market Fund .................................. 8
Florida Intermediate-Term Municipal Fund ............................. 9
Arizona Intermediate-Term Municipal Fund ............................. 10
Basics of Fixed-Income Investing .......................................... 11
Management ................................................................ 14
Investing with American Century ........................................... 17
Share Price and Distributions ............................................. 21
Taxes ..................................................................... 22
Financial Highlights ...................................................... 24

[left margin]

Throughout this book you'll find definitions to key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

[graphic of pointing finger]
This symbol highlights special information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUNDS

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

These funds seek high current income and investment returns that are exempt from
regular federal income tax and taxes imposed by New York (both city and state),
Florida or Arizona.

WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

Fund Primary Investments Principal Risks
- ----------------------------------------------------------------------------
New York Municipal High-quality, New York economic risk
Money Market very short-term Some credit risk
debt securities
- ----------------------------------------------------------------------------
Florida Municipal High-quality, Florida economic risk
Money Market very short-term Some credit risk
debt securities
- ----------------------------------------------------------------------------
Florida Intermediate-Term Quality debt securities Florida economic risk
Municipal that mature in Credit risk
five to 10 years Interest rate risk
- ----------------------------------------------------------------------------
Arizona Intermediate-Term Quality debt securities Arizona economic risk
Municipal that mature in Credit risk
five to 10 years Interest rate risk

WHO MAY WANT TO INVEST IN THE FUNDS?

The funds may be a good investment if you are

* a New York, Florida or Arizona resident or taxpayer

* seeking current tax-free income

* comfortable with risk based on New York's, Florida's or Arizona's economy

* comfortable with the funds' other investment risks

* seeking diversification by investing in a fixed-income mutual fund

WHO MAY NOT WANT TO INVEST IN THE FUNDS?

The funds may not be a good investment if you are

* investing in a IRA or other tax-advantaged retirement plan

* investing for long-term growth

* looking for the added security of FDIC insurance

[left margin]
DEBT SECURITIES include fixed-income investments such as notes, bonds,
commercial paper and debentures.

[graphic of pointing finger]
An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Although the money market funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing in
them.

2 American Century Investments 1-800-345-2021

FUND PERFORMANCE HISTORY

FLORIDA MUNICIPAL MONEY MARKET FUND

Annual Total Returns(1)

The following bar chart shows the performance of the fund's Investor Class
shares for each full calendar year in the life of the fund. It indicates the
volatility of the fund's historical returns from year to year. New York
Municipal Money Market is not included because it does not yet have a full
calendar year of performance.

[bar chart data below]
Florida Municipal Money Market Fund
1998 3.13%
1997 3.39%
1996 3.67%
1995 4.07%

(1) As of June 30, 1999, Florida Municipal Money Market's year-to-date return
was 1.36%.

The highest and lowest quarterly returns for the period reflected in the chart
are:

Highest Lowest
- --------------------------------------------------------------------------------
Florida Municipal Money Market 1.06% (2Q 1995) 0.63% (1Q 1999)

Average Annual Returns

(1) The inception date for the fund is April 11, 1994.

(2) Since April 30, 1994, the date nearest the fund's inception for which data
are available.

[left margin]

[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com.

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

Annual Total Returns(1)

Florida Intermediate-Term Municipal Fund
1998 6.49%
1997 8.22%
1996 3.66%
1995 13.49%

(1) As of June 30, 1999, Florida Intermediate-Term Municipal's year-to-date
return was -1.01%.

The highest and lowest quarterly returns for the period reflected in the chart
are:

Highest Lowest
- --------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 5.06% (1Q 1995) -1.63% (2Q 1999)

Average Annual Returns

(1) The inception date for Florida Intermediate-Term Municipal is April 11,
1994.

(2) Since April 30, 1994, the date nearest the fund's inception for which data
are available.

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[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com

4 American Century Investments 1-800-345-2021

FUND PERFORMANCE HISTORY

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND

Annual Total Returns(1)

Arizona Intermediate-Term Municipal Fund
1998 5.90%
1997 6.90%
1996 3.74%
1995 13.15%

(1) As of June 30, 1999, Arizona Intermediate-Term Municipal's year-to-date
return was -1.04%.

The highest and lowest quarterly returns for the period reflected in the chart
are:

Highest Lowest
- --------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 4.60% (1Q 1995) -1.63% (2Q 1999)

Average Annual Returns

(1) The inception date for Arizona Intermediate-Term Municipal is April 11,
1994.

(2) Since April 30, 1994, the date nearest the fund's inception for which data
are available.

[left margin]

[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com.

www.americancentury.com American Century Investments 5

FEES AND EXPENSES

There are no sales loads, fees or other charges

* to buy fund shares directly from American Century

* to reinvest dividends in additional shares

* to exchange into the Investor Class shares of other American Century funds

* to redeem your shares

The following table describes the fees and expenses that you will pay if you buy
and hold shares of the funds.

<TABLE>

ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses Operating Expenses
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York Municipal Money Market 0.50% None 0.01%(2) 0.51%
- --------------------------------------------------------------------------------------------------------------
Florida Municipal Money Market 0.49% None 0.01%(3) 0.50%
- --------------------------------------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 0.50% None 0.01%(3) 0.51%
- --------------------------------------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 0.50% None 0.01%(3) 0.51%
</TABLE>

(2) Other expenses, which include the fees and expenses of the fund's
independent trustees, their legal counsel and interest, are expected to be
0.01% for the current fiscal year.

(3) Other expenses include the fees and expenses of the funds' independent
trustees, their legal counsel and interest.

EXAMPLES

The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .

* invest $10,000 in the fund

* redeem all of your shares at the end of the periods shown below

* earn a 5% return each year

* incur the same operating expenses shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------
New York Municipal Money Market $52 $163 $285 $640
- --------------------------------------------------------------------------
Florida Municipal Money Market $51 $160 $279 $627
- --------------------------------------------------------------------------
Florida Intermediate-Term Municipal $52 $163 $285 $640
- --------------------------------------------------------------------------
Arizona Intermediate-Term Municipal $52 $163 $285 $640

[left margin]
[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.

6 American Century Investments 1-800-345-2021

INFORMATION ABOUT THE FUNDS

NEW YORK MUNICIPAL MONEY MARKET FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

New York Municipal Money Market seeks safety of principal and high current
income that is exempt from federal income tax and seeks to be exempt from the
New York tax.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers buy cash-equivalent, HIGH-QUALITY DEBT SECURITIES with income
payments exempt from federal, New York state and New York City income taxes.
Cities, counties and other municipalities in New York and U.S. territories (such
as Puerto Rico) usually issue these securities for public projects, such as
schools and roads.

The fund managers also may buy cash-equivalent, high-quality debt securities
with income payments exempt from federal, New York state and New York City
income taxes, but are not exempt from the federal alternative minimum tax.
Cities, counties and other municipalities in New York and U.S. territories (such
as Puerto Rico) usually issue these securities (called private activity bonds)
to fund for-profit private projects, such as hospitals and athletic stadiums.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?

Because the fund invests primarily in New York municipal securities, it will be
sensitive to events that affect New York's economy. New York Municipal Money
Market may have a higher level of risk than funds that invest in a larger
universe of securities.

[left margin]
[graphic of pointing finger]
Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

www.americancentury.com American Century Investments 7

FLORIDA MUNICIPAL MONEY MARKET FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Florida Municipal Money Market seeks safety of principal and high current income
that is exempt from federal income tax and seeks to be exempt from the Florida
intangible personal property tax.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?

[left margin]
[graphic of pointing finger]
Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

8 American Century Investments 1-800-345-2021

FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Florida Intermediate-Term Municipal seeks safety of principal and high current
income that is exempt from federal income tax and seeks to be exempt from the
Florida intangible personal property tax.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers also may use futures contracts and options to pursue the
fund's investment objectives.

The WEIGHTED AVERAGE MATURITY of the fund is expected to be between five and 10
years.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

[left margin]
[graphic of pointing finger]
Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate a
fund's interest rate sensitivity. For more information, see "Weighted Average
Maturity" in this Prospectus.

www.americancentury.com American Century Investments 9

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Arizona Intermediate-Term Municipal seeks safety of principal and high current
income that is exempt from federal and Arizona income taxes.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers also may use futures contracts and options to pursue the
fund's investment objectives.

In the event of exceptional market or economic conditions, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or cash-equivalent securities. To the extent a fund assumes a defensive
position, it will not be pursuing its investment objectives and may generate
taxable income.

The WEIGHTED AVERAGE MATURITY of the fund is expected to be between five and 10
years.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

When interest rates change, the fund's share value will be affected. Generally,
when interest rates rise, the fund's share value will decline. The opposite is
true when interest rates decline. The interest rate risk is higher for Arizona
Intermediate-Term Municipal than for funds which have shorter weighted average
maturities, such as money market and short-term bond funds.

[left margin]
[graphic of pointing finger]
Income from the funds may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate a
fund's interest rate sensitivity. For more information, see "Weighted Average
Maturity" in this Prospectus.

10 American Century Investments 1-800-345-2021

BASICS OF FIXED-INCOME INVESTING

DEBT SECURITIES

The fund managers decide which debt securities to buy and sell by

* determining which securities help a fund meet its maturity requirements

* eliminating securities that do not satisfy a fund's credit quality standards

* evaluating the current economic conditions and assessing the risk of
inflation

* evaluating special features of the securities that may make them more or less
attractive

WEIGHTED AVERAGE MATURITY

TYPES OF RISK

The basic types of risk that the funds face are described below.

Interest Rate Risk

[left margin]
[graphic of pointing finger]

The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate
the remaining maturity of a fund's investment portfolio.

www.americancentury.com American Century Investments 11

<TABLE>

Remaining Maturity Current Price Price after 1% Increase Change in Price
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
- --------------------------------------------------------------------------------------
3 years $100.00 $97.38 -2.62%
- --------------------------------------------------------------------------------------
10 years $100.00 $93.20 -6.80%
- --------------------------------------------------------------------------------------
30 years $100.00 $88.69 -11.31%
</TABLE>

Credit Risk

The following chart shows the authorized credit quality ranges for the funds
offered by this Prospectus.

<TABLE>
- -------------------------------------------------------------
Quality
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------
High Quality
- ---------------------------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- ------------------------------------------------------------------------------------------------------------
New York Municipal
Money Market X X
- ------------------------------------------------------------------------------------------------------------
Florida Municipal Money Market X X
- ------------------------------------------------------------------------------------------------------------
Florida
Intermediate-Term Tax-Free X X X X
- ------------------------------------------------------------------------------------------------------------
Arizona Intermediate-Term
Municipal X X X X
- ------------------------------------------------------------- -----------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- ------------------------------------------------------------- -----------------------------------------
</TABLE>

Liquidity Risk

[left margin]
[graphic of pointing finger]
Credit quality may be lower when the issuer has
* a high debt level
* a short operating history
* a senior level of debt
* a difficult, competitive environment
* a less stable cash flow

[graphic of pointing finger]
The Statement of Additional Information provides a detailed description of these
securities ratings.

12 American Century Investments 1-800-345-2021

Inflation Risk

A COMPARISON OF BASIC RISK FACTORS

<TABLE>
Interest Rate Credit Liquidity Inflation
Risk Risk Risk Risk
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York Municipal Money Market Lowest Lowest Lowest Lowest
- ------------------------------------------------------------------------------------------
Florida Municipal Money Market Lowest Lowest Lowest Lowest
- ------------------------------------------------------------------------------------------
Florida Intermediate-Term Municipal Medium Medium Medium Medium
- ------------------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal Medium Medium Medium Medium
</TABLE>

www.americancentury.com American Century Investments 13

MANAGEMENT

WHO MANAGES THE FUNDS?

The Board of Trustees, investment advisor and fund management team play key
roles in the management of the funds.

THE BOARD OF TRUSTEES

THE INVESTMENT ADVISOR

New York Municipal Money Market will pay the advisor an investment category fee
rate of 0.2700% of the first $1 billion of average net assets, 0.2270% of the
next $1 billion, 0.1860% of the next $3 billion, 0.1690% of the next $5 billion,
0.1580% of the next $15 billion, 0.1575% of the next $25 billion, and 0.1570%
thereafter. In addition to the investment category fee, New York Municipal Money
Market will pay the advisor a complex fee based on the total assets the advisor
manages at a rate of 0.3100% of the first $2.5 billion of average net assets,
0.3000% of the next $7.5 billion, 0.2985% of the next $15 billion, 0.2970% of
the next $25 billion, 0.2960% of the next $50 billion, 0.2950% of the next $100
billion, 0.2940% of the next $100 billion, 0.2930% of the next $200 billion,
0.2920% of the next $250 billion, 0.2910% of the next $500 billion, and 0.2900%
thereafter.

Management Fees Paid by the Funds to the Advisor as a Percentage of Average Net
Assets for the Most Recent Fiscal Year Ended May 31, 1999
- --------------------------------------------------------------------------------
Florida Municipal Money Market 0.49%
- --------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 0.50%
- --------------------------------------------------------------------------------
Arizona Intermediate-Term Municipal 0.50%

14 American Century Investments 1-800-345-2021

THE FUND MANAGEMENT TEAM

The portfolio managers who lead the investment teams are identified below:

BRYAN E. KARCHER

Mr. Karcher, Portfolio Manager, has been a member of the team that manages
Florida Municipal Money Market since June 1995 and the New York Municipal Money
Market team since its inception. He joined American Century in July 1989 and has
been a Portfolio Manager since June 1995. He holds a bachelor's degree in
economics from the University of California-Los Angeles. He is a Chartered
Financial Analyst.

KENNETH M. SALINGER

Mr. Salinger, Portfolio Manager, has been a member of the team that manages
Arizona Intermediate-Term Municipal team since June 1998 and the Florida
Intermediate-Term Municipal team since October 1996. He joined American Century
in April 1992. He has a bachelor's degree in quantitative economics from the
University of California-San Diego. He is a Chartered Financial Analyst.

[left margin]

[graphic of pointing finger]

CODE OF ETHICS

American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or from profiting from the purchase and sale of the same security within 60
calendar days. In addition, the Code of Ethics requires portfolio managers and
other employees with access to information about the purchase or sale of
securities by the funds to obtain approval before executing permitted personal
trades.

www.americancentury.com American Century Investments 15

FUNDAMENTAL INVESTMENT POLICIES

YEAR 2000 ISSUES

16 American Century Investments 1-800-345-2021

INVESTING WITH AMERICAN CENTURY

SERVICES AUTOMATICALLY AVAILABLE TO YOU

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

CONDUCTING BUSINESS IN WRITING

WAYS TO MANAGE YOUR ACCOUNT
- --------------------------------------------------------------------------------

BY TELEPHONE

Investor Relations
1-800-345-2021

Business, Not-For-Profit and
Employer-Sponsored
Retirement Plans
1-800-345-3533

Automated Information Line
1-800-345-8765

[graphic of telephone]

OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES
Call us or use our Automated Information Line if you have authorized us to
accept telephone instructions.

MAKE ADDITIONAL INVESTMENTS
Call us or use our Automated Information Line if you have authorized us to
invest from your bank account.

SELL SHARES
Call an Investor Relations Representative.

- --------------------------------------------------------------------------------
BY MAIL OR FAX

P.O. Box 419200
Kansas City, MO 64141-6200

Fax
816-340-7962

[graphic of envelope]

OPEN AN ACCOUNT
Send a signed, completed application and check or money order payable to
American Century Investments.

EXCHANGE SHARES
Send us written instructions to exchange your shares from one American Century
account to another.

SELL SHARES
Send us written instructions or a redemption form to sell shares. Call an
Investor Relations Representative to request a form.

- --------------------------------------------------------------------------------
ONLINE

www.americancentury.com

[graphic of computer]

OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES
Exchange shares from another American Century account.

MAKE ADDITIONAL INVESTMENTS
Make an additional investment into an established American Century account if
you have authorized us to invest from your bank account.

SELL SHARES
Not available.

www.americancentury.com American Century Investments 17

A NOTE ABOUT MAILINGS TO SHAREHOLDERS

YOUR GUIDE TO SERVICES AND POLICIES

When you open an account, you will receive a services guide, which explains the
services available to you and the policies of the funds and the transfer agent.

- --------------------------------------------------------------------------------
BY WIRE

[graphic of pointing finger]
Please remember that if you request redemptions by wire, $10 will be deducted
from the amount wired. Your bank also may charge a fee.

[graphic of wire machine]

OPEN AN ACCOUNT
Call us to set up your account or mail a completed application to the address
provided in the "By mail" section and give your bank the following information.

* Our bank information:
Commerce Bank N.A.
Routing No. 101000019
Account No. 2804918
* The fund name
* Your American Century account number+
* Your name
* The contribution year (for IRAs only)

+ For additional investments only

MAKE ADDITIONAL INVESTMENTS
Follow the wire instructions provided in the "Open an account" section

SELL SHARES
You can receive redemption proceeds by wire or electronic transfer.

EXCHANGE SHARES Not available.

- --------------------------------------------------------------------------------
AUTOMATICALLY

[graphic of revolving arrows]

OPEN AN ACCOUNT
Not available.

EXCHANGE SHARES
Send us written instructions to set up an automatic exchange of your shares from
one American Century account to another.

MAKE ADDITIONAL INVESTMENTS
With the automatic investment privilege, you can purchase shares on a regular
basis. You must invest at least $600 per year per account.

SELL SHARES
If you have at least $10,000 in your account, you may sell shares automatically
by establishing Check-A-Month or Automatic Redemption plans.

- --------------------------------------------------------------------------------
IN PERSON

[graphic of person]

If you prefer to handle your transactions in person, visit one of our Investor
Centers and a representative can help you open an account, make additional
investments and sell or exchange shares.

4500 Main St.
Kansas City, Missouri
8 a.m. to 5:30 p.m., Monday - Friday

1665 Charleston Road
Mountain View, California
8 a.m. to 5 p.m., Monday - Friday

4917 Town Center Drive
Leawood, Kansas
8 a.m. to 6 p.m., Monday -- Friday
8 a.m. to noon, Saturday

9445 East County Line Road, Suite A
Englewood, Colorado
8 a.m. to 6 p.m., Monday- Friday
8 a.m. to noon, Saturday

18 American Century Investments 1-800-345-2021

<TABLE>
MINIMUM INITIAL INVESTMENT AMOUNTS(1)

Florida Municipal
Money Market and
New York Municipal
To open an account the minimum investments are as follows: Money Market Other Funds
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Individual or Joint $2,500 $5,000
- ------------------------------------------------------------------------------------------
UGMA/UTMA $2,500 $5,000
</TABLE>

(1) The funds in this Prospectus are not available for retirement accounts.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

www.americancentury.com American Century Investments 19

INVESTING THROUGH FINANCIAL INTERMEDIARIES

* minimum investment requirements

* exchange policies

* fund choices

* cutoff time for investments

[left margin]
[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.

20 American Century Investments 1-800-345-2021

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

If current market prices of securities owned by a fund (except Florida Municipal
Money Market) are not readily available, the advisor may determine their fair
value in accordance with procedures adopted by the fund's Board of Trustees. The
portfolio securities of the money market funds are valued at amortized cost.
This means that the securities are initially valued at their cost when
purchased. After the initial purchase, the difference between the purchase price
and the known value at maturity will be reduced at a constant rate until
maturity. This valuation will be used regardless of the impact of interest rates
on the market value of the security. The Board has adopted procedures to ensure
that this type of pricing is fair to the funds' shareholders.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

DISTRIBUTIONS

Each money market fund declares and reinvests distributions from net income
daily. Each of the other funds declares distributions from net income daily and
pays these distributions monthly. Each fund (except New York Municipal Money
Market and Florida Municipal Money Market) generally pays distributions of
capital gains, if any, once a year usually in December. A fund may make more
frequent distributions if necessary to comply with Internal Revenue Code
provisions. Distributions are reinvested automatically in additional shares
unless you choose another option.

[left margin]

The NET ASSET VALUE of a fund is the price of the fund's shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

www.americancentury.com American Century Investments 21

TAXES

Tax-Exempt Income

Most of the income that the funds receive from municipal securities is exempt
from regular federal income taxes. Distributions from New York Municipal Money
Market and Arizona Intermediate-Term Municipal will also be exempt from New York
and Arizona income taxes, respectively. Shares of Florida Municipal Money Market
and Florida Intermediate-Term Municipal will also generally be exempt from the
Florida intangible personal property tax. However, corporate shareholders should
be aware that distributions may be subject to state corporate franchise tax.

Taxable Income

* Market Discount Purchases. The funds may buy a tax-exempt security for a
price less than the principal amount of the bond. If the price of the bond
increases over time, a portion of the gain may be treated as ordinary income
and taxable as ordinary income if it is distributed to shareholders.

* Capital Gains. When a fund sells a security, even a tax-exempt municipal
security, it can generate a capital gain or loss, which you must report on
your tax return.

* Temporary Investments. Some temporary investments, such as securities loans
and repurchase agreements, can generate taxable income.

<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Brackeor Above
- ------------------------------------------------------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
- ------------------------------------------------------------------------------------
Long-term capital gains 10% 20%
</TABLE>

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

[left margin]
[graphic of pointing finger]

BUYING A DIVIDEND

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

22 American Century Investments 1-800-345-2021

Taxes on Transactions

www.americancentury.com American Century Investments 23

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, each table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

Each table also includes some key statistics for the period as appropriate

* TOTAL RETURN --the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* EXPENSE RATIO --operating expenses as a percentage of average net assets

* NET INCOME RATIO --net investment income as a percentage of average net
assets

* PORTFOLIO TURNOVER --the percentage of the fund's buying and selling activit

24 American Century Investments 1-800-345-2021

<TABLE>

<CAPTION>
FLORIDA MUNICIPAL MONEY MARKET FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995

<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 0.03 0.04 0.04
----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income ................. (0.03) (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(1) ............................ 2.92% 3.31% 3.55% 3.86% 3.71%

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses to
Average Net Assets (Before Expense Waiver) ... 0.50% 0.53% 0.66% 0.71% 0.88%

Ratio of Operating Expenses
to Average Net Assets ........................ 0.50% 0.51% 0.12% 0.01% --

Ratio of Net Investment Income to
Average Net Assets (Before Expense Waiver) ... 2.88% 3.23% 2.94% 3.05% 3.05%

Ratio of Net Investment Income
to Average Net Assets ........................ 2.88% 3.25% 3.48% 3.75% 3.93%

Net Assets, End of Period (in thousands) ..... $ 87,509 $ 109,684 $ 112,129 $ 99,993 $ 45,147

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

www.americancentury.com American Century Investments 25

FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses
to Average Net Assets ....................... 0.51% 0.54% 0.65% 0.13% --

Ratio of Operating Expenses to Average
Net Assets (Before Expense Waiver) .......... 0.51% 0.58% 0.86% 0.88% 1.09%

Ratio of Net Investment Income
to Average Net Assets ....................... 4.13% 4.28% 4.42% 5.05% 5.23%

Ratio of Net Investment Income to
Average Net Assets (Before Expense Waiver) .. 4.13% 4.24% 4.21% 4.30% 4.14%

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

Net Assets, End of Period (in thousands) ....$ 44,379 $ 29,605 $ 16,513 $ 10,319 $ 9,532

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

26 American Century Investments 1-800-345-2021

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995

Net Asset Value, Beginning of Period ..................$ 10.67 $ 10.44 $ 10.31 $ 10.35 $ 10.13
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income ............................... 0.46 0.46 0.45 0.51 0.51
Net Realized and Unrealized Gain (Loss)
on Investment Transactions .......................... 0.01 0.28 0.13 (0.03) 0.22
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .................... 0.47 0.74 0.58 0.48 0.73
---------- ---------- ---------- ---------- ----------
Distributions
From Net Investment Income .......................... (0.46) (0.46) (0.45) (0.51) (0.51)
From Net Realized Gains on Investment Transactions .. (0.06) (0.05) -- (0.01) --
---------- ---------- ---------- ---------- ----------
Total Distributions ................................. (0.52) (0.51) (0.45) (0.52) (0.51)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ........................$ 10.62 $ 10.67 $ 10.44 $ 10.31 $ 10.35
========== ========== ========== ========== ==========
Total Return(1) ..................................... 4.51% 7.19% 5.77% 4.65% 7.52%

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses to
Average Net Assets (Before Expense Waiver) ............ 0.51% 0.60% 0.79% 0.82% 1.01%

Ratio of Operating Expenses ........................... 0.51% 0.54% 0.66% 0.14% --

Ratio of Net Investment Income to
Average Net Assets (Before Expense Waiver) ............ 4.30% 4.27% 4.22% 4.17% 4.15%

Ratio of Net Investment Income
to Average Net Assets ................................. 4.30% 4.33% 4.35% 4.85% 5.16

Portfolio Turnover Rate ............................... 70% 39% 81% 36% 33%

Net Assets, End of Period (in thousands) ..............$ 45,410 $ 40,047 $ 30,555 $ 25,789 $ 19,778

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

</TABLE>

www.americancentury.com American Century Investments 27

NOTES

28 American Century Investments 1-800-345-2021

NOTES

www.americancentury.com American Century Investments 29

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

Annual and Semiannual Reports

Statement of Additional Information

You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location
and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the documents.)

Investment Company Act File No. 811-4025

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

1-800-345-2021 or 816-531-5575

9910
SH-PRS-17438
<PAGE>
AMERICAN CENTURY

Prospectus

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

OCTOBER 1, 1999
INVESTOR CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by
Funds Distributor, Inc.

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

[inside front cover]

Dear Investor,

Here's what you'll find:

* The funds' primary investments and risks

* A description of who may or may not want to invest in the funds

* Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the funds' benchmarks

* An overview of ways to best manage your accounts

* Helpful tips and definitions of key investment terms

Sincerely,

/*/Mark Killen
Mark Killen
Senior Vice President
American Century Investment Services, Inc.

[left margin]

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

American Century
Investments

P.O. Box 419200
Kansas City, MO
64141-6200

TABLE OF CONTENTS
An Overview of the Funds .................................................. 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 6
Information about the Funds ............................................... 7
Tax-Free Money Market Fund ........................................... 7
Limited-Term Tax-Free Fund
Intermediate-Term Tax-Free Fund
Long-Term Tax-Free Fund .............................................. 8
High-Yield Municipal Fund ............................................ 10
Basics of Fixed-Income Investing .......................................... 11
Management ................................................................ 14
Investing with American Century ........................................... 17
Share Price and Distributions ............................................. 21
Taxes ..................................................................... 22
Financial Highlights ...................................................... 23

[left margin]

Throughout this book you'll find definitions to key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

[graphic of pointing finger]

This symbol highlights special information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUNDS

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

These funds seek high current income and investment returns that are exempt from
federal income tax.

High-Yield Municipal also seeks capital appreciation as a secondary objective.

WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

Fund Primary Investments Principal Risks
- ---------------------------------------------------------------------------
Tax-Free Money Market High-quality, Some credit risk
very short-term
debt securities
- ---------------------------------------------------------------------------
Limited-Term Tax-Free Quality debt securities Credit risk
that mature in Some interest rate risk
five years or less
- ---------------------------------------------------------------------------
Intermediate-Term Quality debt securities Credit risk
Tax-Free that mature in Interest rate risk
five to 10 years
- ---------------------------------------------------------------------------
Long-Term Tax-Free Quality debt securities Credit risk
that mature in High interest rate risk
10 years or more
- ---------------------------------------------------------------------------
High-Yield Municipal Debt securities that provide High credit risk
high income, including junk High interest rate risk and
private activity bonds

WHO MAY WANT TO INVEST IN THE FUNDS?

The funds may be a good investment if you are

* seeking current tax-free income
* seeking diversification by investing in a fixed-income mutual fund
* comfortable with the funds' other investment risks

WHO MAY NOT WANT TO INVEST IN THE FUNDS?

The funds may not be a good investment if you are

* investing in a IRA or other tax-advantaged retirement plan
* investing for long-term growth
* looking for the added security of FDIC insurance

[left margin]

DEBT SECURITIES include fixed-income investments such as notes, bonds,
commercial paper and debentures.

[graphic of pointing finger]
An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Although the Tax-Free Money Market Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in it.

2 American Century Investments 1-800-345-2021

FUND PERFORMANCE HISTORY

TAX-FREE MONEY MARKET FUND

Annual Total Returns(1)

The following bar chart shows the performance of the fund's Investor Class
shares for each of the last 10 calendar years. It indicates the volatility of
the fund's historical returns from year to year.

[bar chart data below]
Tax-Free Money Market Fund
1998 3.47%
1997 3.43%
1996 2.98%
1995 3.36%
1994 2.31%
1993 1.90%
1992 2.47%
1991 4.21%
1990 5.60%
1989 6.04%

(1) As of June 30, 1999, Tax-Free Money Market's year-to-date return was 1.39%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- ---------------------------------------------------------------------------
Tax-Free Money Market 1.59% (2Q 1989) 0.44% (1Q 1994)

Average Annual Returns

The following table shows the average annual total returns of the fund's
Investor Class shares for the periods indicated. The benchmark is included in
the table for performance comparison.

<TABLE>

For the calendar year ended December 31, 1998 1 year 5 years 10 years Life of Fund(1)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Free Money Market 3.47% 3.11% 3.57% 3.96%
Lipper Tax-Exempt Money Market Funds 2.92% 2.93% 3.47% 3.72%(2)
</TABLE>

(1) The inception date for Tax-Free Money Market is July 31, 1984.

(2) Since August 31, 1984, the date nearest the fund's inception for which data
are available.

[left margin]
[graphic of pointing finger]
The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com.

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

LIMITED-TERM TAX-FREE FUND
INTERMEDIATE-TERM TAX-FREE FUND
LONG-TERM TAX-FREE FUND

Annual Total Returns(1)

The following bar chart shows the performance of the funds' Investor Class
shares for each of the last 10 calendar years or each full calendar year in the
life of each fund, if less than 10 years. It indicates the volatility of the
funds' historical returns from year to year. High-Yield Municipal is not
included because it does not yet have a full calendar year of performance.

[bar chart data below]
Limited-Term Intermediate-Term Long-Term
Tax-Free Fund Tax-Free Fund Tax-Free Fund
1998 5.13% 5.81% 5.94%
1997 5.60% 7.44% 9.59%
1996 3.68% 3.94% 3.08%
1995 6.75% 11.93% 18.50%
1994 2.47% -2.06% -5.58%
1993 9.07% 12.15%
1992 7.17% 7.61%
1991 10.05% 12.01%
1990 6.28% 6.15%
1989 6.66% 9.55%

(1) As of June 30, 1999, the funds' year-to-date returns were: Limited-Term
Tax-Free -0.04%, Intermediate-Term Tax-Free -1.30% and Long-Term Tax-Free
-2.30%.

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
Limited-Term Tax-Free 2.10% (3Q 1998) -0.81% (2Q 1999)
- --------------------------------------------------------------------------------
Intermediate-Term Tax-Free 4.17% (1Q 1995) -3.54% (1Q 1994)
- --------------------------------------------------------------------------------
Long-Term Tax-Free 6.68% (1Q 1995) -5.46% (1Q 1994)

4 American Century Investments 1-800-345-2021

Average Annual Returns

The following table shows the average annual total returns of the funds'
Investor Class shares for the periods indicated. The benchmarks are unmanaged
indices that have no operating costs and are included in the table for
performance comparison.

<TABLE>

For the calendar year ended December 31, 1998 1 year 5 years 10 years Life of Fund(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Limited-Term Tax-Free 5.13% 4.71% N/A 4.62%
Merrill Lynch 0-3 Year Municipal Index 5.01% 4.45% N/A 4.37%
- --------------------------------------------------------------------------------------------------
Intermediate-Term Tax-Free 5.81% 5.31% 6.57% 6.08%
Lehman 5-Year General Obligation Index 5.84% 5.35% 6.98% 6.35%
- --------------------------------------------------------------------------------------------------
Long-Term Tax-Free 5.94% 6.01% 7.73% 7.25%
Lehman Long-Term Municipal Bond Index 6.89% 6.84% 9.15% 8.51%
</TABLE>

(1) The inception dates for the funds are: Limited-Term Tax-Free, March 1, 1993;
Intermediate-Term Tax-Free and Long-Term Tax-Free, March 2, 1987.

[left margin]
[graphic of pointing finger]
For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at www.americancentury.com

www.americancentury.com American Century Investments 5

FEES AND EXPENSES

There are no sales loads, fees or other charges

* to buy fund shares directly from American Century
* to reinvest dividends in additional shares
* to exchange into the Investor Class shares of other American Century funds
* to redeem your shares

The following table describes the fees and expenses that you will pay if you buy
and hold shares of the funds.

<TABLE>
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tax-Free Money Market 0.49% None 0.01% 0.50%
- --------------------------------------------------------------------------------------------------
Limited-Term Tax-Free 0.51% None 0.01% 0.52%
Intermediate-Term Tax-Free 0.51% None 0.01% 0.52%
Long-Term Tax-Free 0.51% None 0.01% 0.52%
- --------------------------------------------------------------------------------------------------
High-Yield Municipal 0.64% None 0.01% 0.65%(3)
</TABLE>

(2) Other expenses include the fees and expenses of the funds' independent
trustees, their legal counsel and interest.

(3) The advisor waived all expenses of High-Yield Municipal through April 30,
1999. The fee is shown without the effect of the fee waiver.

EXAMPLES

The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .

* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------
Tax-Free Money Market $51 $160 $279 $627
- ------------------------------------------------------------------------
Limited-Term Tax-Free $53 $167 $290 $652
Intermediate-Term Tax-Free $53 $167 $290 $652
Long-Term Tax-Free $53 $167 $290 $652
- ------------------------------------------------------------------------
High-Yield Municipal $66 $208 $362 $809

[left margin]
[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.

6 American Century Investments 1-800-345-2021

INFORMATION ABOUT THE FUNDS

TAX-FREE MONEY MARKET FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

Tax-Free Money Market seeks safety of principal and high current income that is
exempt from federal income tax.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers buy cash-equivalent, HIGH-QUALITY DEBT SECURITIES with income
payments exempt from federal income tax. Cities, counties and other
municipalities in the 50 states and U.S. territories usually issue these
securities for public projects, such as schools and roads.

The fund managers also may buy cash-equivalent, high-quality debt securities
with payments exempt from regular federal income tax, but are not exempt from
the federal alternative minimum tax. Cities, counties and other municipalities
usually issue these securities (called private activity bonds) to fund
for-profit private projects, such as hospitals and athletic stadiums. No more
than 20% of the fund's total assets may be invested in these securities.

Additional information about the fund's investments is available in its annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling us.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

Because the fund invests primarily in municipal securities, it will be sensitive
to events that affect municipal markets. Tax-Free Money Market may have a higher
level of risk than funds that invest in a larger universe of securities.

[left margin]
[graphic of pointing finger]
Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

www.americancentury.com American Century Investments 7

LIMITED-TERM TAX-FREE FUND
INTERMEDIATE-TERM TAX-FREE FUND
LONG-TERM TAX-FREE FUND

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

These funds seek safety of principal and high current income that is exempt from
federal income tax.

HOW DO THE FUNDS PURSUE THEIR INVESTMENT OBJECTIVES?

The fund managers buy QUALITY DEBT SECURITIES with income payments exempt from
federal income tax. Cities, counties and other municipalities in the 50 states
and U.S. territories usually issue these securities for public projects, such as
schools and roads.

The fund managers also may buy quality debt securities with payments exempt from
regular federal income tax, but are not exempt from the federal alternative
minimum tax. Cities, counties and other municipalities usually issue these
securities (called private activity bonds) to fund for-profit private projects,
such as hospitals and athletic stadiums. No more than 20% of the funds' total
assets may be invested in these securities.

The funds may purchase securities in a number of different ways to seek higher
rates of return. For example, by using when-issued and forward commitment
transactions, the funds may purchase securities in advance to generate
additional income.

In the event of exceptional market or economic conditions, the funds may, as a
temporary defensive measure, invest all or a substantial portion of their assets
in cash or cash- equivalent securities. To the extent a fund assumes a defensive
position, it will not be pursuing its investment objectives and may generate
taxable income.

Additional information about the funds' investments is available in their annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period. You may get these
reports at no cost by calling us.

WHAT IS THE DIFFERENCE BETWEEN THE FUNDS?

The funds differ in the maturity of the debt securities they purchase. This
difference is shown on the chart below.

Weighted Average Maturity Range
- -----------------------------------------------------------------------
Limited-Term Tax-Free 5 years or less
Intermediate-Term Tax-Free 5-10 years
Long-Term Tax-Free 10 years or longer

[left margin]
[graphic of pointing finger]
Income from the funds may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

8 American Century Investments 1-800-345-2021

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?

The funds have different WEIGHTED AVERAGE MATURITIES. Because of this, the funds
will respond differently to changes in interest rates. Funds with longer
weighted average maturities are more sensitive to interest rate changes. When
interest rates rise, the values of the funds usually fall, but the values of
funds with longer weighted average maturities generally will fall farther.

The funds may invest part of their assets in securities rated in the lowest
investment-grade category (for example, BBB). The issuers of these securities
are more likely to pose a credit risk, that is, to have problems making interest
and principal payments than issuers of higher-rated securities.

Because these funds invest primarily in municipal securities, they will be
sensitive to events that affect municipal markets. The funds may have a higher
level of risk than funds that invest in a larger universe of securities.

As with all funds, at any given time the value of your shares may be worth more
or less than the price you paid. If you sell your shares when the value is less
than the price you paid, you will lose money.

The funds' share values will fluctuate. In general, the funds that have higher
potential income have a higher potential loss.

Potential Income Potential Loss
- ---------------------------------------------------------------------------
Limited-Term Tax-Free Lower Lower
Intermediate-Term Tax-Free Moderate Moderate
Long-Term Tax-Free Higher Higher

[left margin]

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate a
fund's interest rate sensitivity. For more information, see "Weighted Average
Maturity" in this Prospectus.

www.americancentury.com American Century Investments 9

HIGH-YIELD MUNICIPAL FUND

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES?

High-Yield Municipal seeks high current income that is exempt from federal
income tax. Capital appreciation is a secondary objective.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVES?

The fund managers buy long- and intermediate-term debt securities with income
payments exempt from federal income tax. Cities, counties and other
municipalities in the 50 states and U.S. territories usually issue these
securities for public projects, such as schools and roads.

The fund managers also may buy long- and intermediate-term debt securities with
income payments exempt from regular federal income tax, but are not exempt from
the federal alternative minimum tax. Cities, counties and other municipalities
usually issue these securities (called private activity bonds) to fund
for-profit private projects, such as hospitals and athletic stadiums.

The fund managers buy securities that are considered below investment grade,
including so-called junk bonds. Issuers of these securities often have short
financial histories or have questionable credit.

Although High-Yield Municipal invests primarily for income, it also employs
techniques designed to realize capital appreciation. For example, the fund
managers may select bonds with maturities and coupon rates that position it for
potential capital appreciation for a variety of reasons, including their view on
the direction of future interest-rate movements and the potential for a credit
upgrade.

The WEIGHTED AVERAGE MATURITY of the fund is expected to be 10 years or longer.

Additional information about the fund's investments is available in its annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling us.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

When interest rates change, the fund's share value will be affected. Generally,
when interest rates rise, the fund's share value will decline. The opposite is
true when interest rates decline. This interest rate risk is higher for
High-Yield Municipal than for funds that have shorter weighted average
maturities, such as short-term and intermediate-term funds. The magnitude and
frequency of changes in the fund's share value will also increase.

The fund may invest part of its assets in securities rated below investment
grade, including bonds that are in technical or monetary default. By definition,
the issuers of many of these securities have had and may continue to have
problems making interest and principal payments.

Some or all of the fund's income may be subject to the federal alternative
minimum tax.

Because the fund invests primarily in municipal securities, it will be sensitive
to events that affect municipal markets. High-Yield Municipal may have a higher
level of risk than funds that invest in a larger universe of securities.

As with all funds, at any given time the value of your shares of High-Yield
Municipal may be worth more or less than the price you paid. If you sell your
shares when the value is less than the price you paid, you will lose money.

[left margin]
[graphic of pointing finger]
Income from the fund may be subject to the alternative minimum tax. For more
information, see "Taxes" in this Prospectus.

WEIGHTED AVERAGE MATURITY is a measure of a fund's interest rate sensitivity.
For more information, see "Weighted Average Maturity" in this Prospectus.

10 American Century Investments 1-800-345-2021

BASICS OF FIXED-INCOME INVESTING

DEBT SECURITIES

The fund managers decide which debt securities to buy and sell by

* determining which securities help a fund meet its maturity requirements

* eliminating securities that do not satisfy a fund's credit quality standards

* evaluating the current economic conditions and assessing the risk of
inflation

* evaluating special features of the securities that may make them more or less
attractive

WEIGHTED AVERAGE MATURITY

<TABLE>
Amount of Percent of Remaining Weighted
Security Owned Portfolio Maturity Maturity
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Security A $100,000 25% 1,000 days 250 days
- ----------------------------------------------------------------------------------
Debt Security B $300,000 75% 10,000 days 7,500 days
- ----------------------------------------------------------------------------------
Weighted Average Maturity 7,750 days
</TABLE>

TYPES OF RISK

The basic types of risk that the funds face are described below.

Interest Rate Risk

[left margin]
[graphic of pointing finger]
The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate
the remaining maturity of a fund's investment portfolio.

www.americancentury.com American Century Investments 11

<TABLE>

Remaining Maturity Current Price Price after 1% Increase Change in Price
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
- ----------------------------------------------------------------------------------
3 years $100.00 $97.38 -2.62%
- ----------------------------------------------------------------------------------
10 years $100.00 $93.20 -6.80%
- ----------------------------------------------------------------------------------
30 years $100.00 $88.69 -11.31%
</TABLE>

Credit Risk

The following chart shows the authorized credit quality ranges for the funds
offered by this Prospectus.

<TABLE>
- -------------------------------------------------------------
Quality
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------
High Quality
- ---------------------------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- --------------------------------------------------------------------------------------------------------
Tax-Free Money Market X X
- --------------------------------------------------------------------------------------------------------
Limited-Term Tax-Free X X X X
- --------------------------------------------------------------------------------------------------------
Intermediate-Term Tax-Free X X X X
- --------------------------------------------------------------------------------------------------------
Long-Term Tax-Free X X X X
- ------------------------------------------------------------- --------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- ------------------------------------------------------------- --------------------------------------
</TABLE>

Liquidity Risk

[graphic of pointing finger]
The Statement of Additional Information provides a detailed description of these
securities ratings.

12 American Century Investments 1-800-345-2021

Inflation Risk

A COMPARISON OF BASIC RISK FACTORS

<TABLE>
Interest Rate Credit Liquidity Inflation
Risk Risk Risk Risk
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Free Money Market Lowest Lowest Lowest Lowest
- --------------------------------------------------------------------------------
Limited-Term Tax-Free Low Medium Medium Low
Intermediate-Term Tax-Free Medium Medium Medium Medium
Long-Term Tax-Free High Medium Medium High
- --------------------------------------------------------------------------------
High-Yield Municipal Highest Highest Highest Highest
</TABLE>

www.americancentury.com American Century Investments 13

MANAGEMENT

WHO MANAGES THE FUNDS?

The Board of Trustees, investment advisor and fund management team play key
roles in the management of the funds.

THE BOARD OF TRUSTEES

THE INVESTMENT ADVISOR

Management Fees Paid by the Funds to the Advisor as a Percentage of Average Net
Assets for the Most Recent Fiscal Year Ended May 31, 1999
- --------------------------------------------------------------------------
Tax-Free Money Market 0.49%
- --------------------------------------------------------------------------
Limited-Term Tax-Free 0.51%
Intermediate-Term Tax-Free 0.51%
Long-Term Tax-Free 0.51%
- --------------------------------------------------------------------------
High-Yield Municipal 0.64%

14 American Century Investments 1-800-345-2021

THE FUND MANAGEMENT TEAM

The portfolio managers who lead the investment teams are identified below:

G. DAVID MACEWEN

Mr. MacEwen, Senior Vice President and Portfolio Manager, supervises the
American Century Municipal Trust team. He has been a member of the team that
manages Long-Term Tax-Free since May 1991 and Limited-Term Tax-Free since June
1999. He joined American Century in May 1991 as a Municipal Portfolio Manager.
He has a bachelor's degree in economics from Boston University and an MBA in
finance from the University of Delaware.

STEVEN M. PERMUT

Mr. Permut, Vice President, Director of Municipal Research and Portfolio
Manager, has been a member of the High-Yield Municipal team since its inception
in March 1998. He joined American Century in June 1987. He has bachelor's
degrees 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

Mr. Karcher, Portfolio Manager, has been a member of the team that manages
Tax-Free Money Market since June 1995 and Limited-Term Tax-Free since June 1999.
He joined American Century in July 1989 and has been a Portfolio Manager since
June 1995. He has a bachelor's degree in economics from the University of
California-Los Angeles. He is a Chartered Financial Analyst.

KENNETH M. SALINGER

Mr. Salinger, Portfolio Manager, has been a member of the team that manages
Intermediate-Term Tax-Free since June 1999. He joined American Century in April
1992. He has a bachelor's degree in quantitative economics from the University
of California-San Diego. He is a Chartered Financial Analyst.

[left margin]
[graphic of pointing finger]

CODE OF ETHICS

www.americancentury.com American Century Investments 15

FUNDAMENTAL INVESTMENT POLICIES

YEAR 2000 ISSUES

16 American Century Investments 1-800-345-2021

INVESTING WITH AMERICAN CENTURY

SERVICES AUTOMATICALLY AVAILABLE TO YOU

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

CONDUCTING BUSINESS IN WRITING

WAYS TO MANAGE YOUR ACCOUNT
- ------------------------------------------------------------------------------
BY TELEPHONE

Investor Relations
1-800-345-2021

Business, Not-For-Profit and
Employer-Sponsored
Retirement Plans
1-800-345-3533

Automated Information Line
1-800-345-8765

[graphic of telephone]

OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES
Call us or use our Automated Information Line if you have authorized us to
accept telephone instructions.

MAKE ADDITIONAL INVESTMENTS
Call us or use our Automated Information Line if you have authorized us to
invest from your bank account.

SELL SHARES
Call an Investor Relations Representative.

- ------------------------------------------------------------------------------
BY MAIL OR FAX

P.O. Box 419200
Kansas City, MO 64141-6200

Fax
816-340-7962

[graphic of envelope]

OPEN AN ACCOUNT
Send a signed, completed application and check or money order payable to
American Century Investments.

EXCHANGE SHARES
Send us written instructions to exchange your shares from one American Century
account to another.

SELL SHARES
Send us written instructions or a redemption form to sell shares. Call an
Investor Relations Representative to request a form.

- ------------------------------------------------------------------------------
ONLINE

www.americancentury.com

{graphic of computer]

OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES
Exchange shares from another American Century account.

MAKE ADDITIONAL INVESTMENTS
Make an additional investment into an established American Century account if
you have authorized us to invest from your bank account.

SELL SHARES
Not available.

www.americancentury.com American Century Investments 17

A NOTE ABOUT MAILINGS TO SHAREHOLDERS

YOUR GUIDE TO SERVICES AND POLICIES

When you open an account, you will receive a services guide, which explains the
services available to you and the policies of the funds and the transfer agent.

- --------------------------------------------------------------------------------
BY WIRE

[graphic of finger pointing]
Please remember that if you request redemptions by wire, $10 will be deducted
from the amount wired. Your bank also may charge a fee.

[graphic of wire machine]

OPEN AN ACCOUNT
Call us to set up your account or mail a completed application to the address
provided in the "By mail" section and give your bank the following information

* Our bank information:
Commerce Bank N.A.
Routing No. 101000019
Account No. 2804918
* The fund name
* Your American Century account number+
* Your name
* The contribution year (for IRAs only)

+ For additional investments only

MAKE ADDITIONAL INVESTMENTS
Follow the wire instructions provided in the "Open an account" section

SELL SHARES
You can receive redemption proceeds by wire or electronic transfer.

EXCHANGE SHARES Not available.

- ------------------------------------------------------------------------------
AUTOMATICALLY

[graphic of revolving arrows]

OPEN AN ACCOUNT
Not available.

EXCHANGE SHARES
Send us written instructions to set up an automatic exchange of your shares from
one American Century account to another.

MAKE ADDITIONAL INVESTMENTS
With the automatic investment privilege, you can purchase shares on a regular
basis. You must invest at least $600 per year per account.

SELL SHARES
If you have at least $10,000 in your account, you may sell shares automatically
by establishing Check-A-Month or Automatic Redemption plans.

- ------------------------------------------------------------------------------
IN PERSON
[graphic of person]

If you prefer to handle your transactions in person, visit one of our Investor
Centers and a representative can help you open an account, make additional
investments and sell or exchange shares.

4500 Main St.
Kansas City, Missouri
8 a.m. to 5:30 p.m., Monday - Friday

1665 Charleston Road
Mountain View, California
8 a.m. to 5 p.m., Monday - Friday

4917 Town Center Drive
Leawood, Kansas
8 a.m. to 6 p.m., Monday -- Friday
8 a.m. to noon, Saturday

9445 East County Line Road, Suite A
Englewood, Colorado
8 a.m. to 6 p.m., Monday - Friday
8 a.m. to noon, Saturday

18 American Century Investments 1-800-345-2021

MINIMUM INITIAL INVESTMENT AMOUNTS(1)

To open an account the minimum investments are as follows:
Tax-Free Money Market Other Funds
- ----------------------------------------------------------------------
Individual or Joint $2,500 $5,000
- ----------------------------------------------------------------------
UGMA/UTMA $2,500 $5,000

(1) The funds in this Prospectus are not available for retirement accounts.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

If your redemption activity causes your account balance to fall below the
minimum initial investment amount we will notify you and give you 90 days to
meet the minimum. If you do not meet the deadline, American Century will redeem
the shares in the account and send the proceeds to your address of record.

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

www.americancentury.com American Century Investments 19

INVESTING THROUGH FINANCIAL INTERMEDIARIES

* minimum investment requirements

* exchange policies

* fund choices

* cutoff time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statement of Additional Information are available from your
intermediary or plan sponsor.

[left margin]
[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.

20 American Century Investments 1-800-345-2021

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

If current market prices of securities owned by a fund (except Tax-Free Money
Market) are not readily available, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Trustees. The
portfolio securities of Tax-Free Money Market are valued at amortized cost. This
means that the securities are initially valued at their cost when purchased.
After the initial purchase, the difference between the purchase price and the
known value at maturity will be reduced at a constant rate until maturity. This
valuation will be used regardless of the impact of interest rates on the market
value of the security. The Board has adopted procedures to ensure that this type
of pricing is fair to the fund's shareholders.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

DISTRIBUTIONS

Tax-Free Money Market declares and reinvests distributions from net income
daily. Each of the other funds declares distributions from net income daily and
pays these distributions monthly. Each fund (except Tax-Free Money Market)
generally pays distributions of capital gains, if any, once a year usually in
December. A fund may make more frequent distributions if necessary to comply
with Internal Revenue Code provisions. Distributions are reinvested
automatically in additional shares unless you choose another option.

[left margin]
[graphic of pointing finger]

The NET ASSET VALUE of a fund is the price of the fund's shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

www.americancentury.com American Century Investments 21

TAXES

Tax-Exempt Income

Most of the income that the funds receive from municipal securities is exempt
from regular federal income taxes. However, corporate shareholders should be
aware that distributions may be subject to state corporate franchise tax.

Taxable Income

* Market Discount Purchases. The funds may buy a tax-exempt security for a
price less than the principal amount of the bond. If the price of the bond
increases over time, a portion of the gain may be treated as ordinary income
and taxable as ordinary income if it is distributed to shareholders.

* Capital Gains. When a fund sells a security, even a tax-exempt municipal
security, it can generate a capital gain or loss, which you must report on
your tax return.

* Temporary Investments. Some temporary investments, such as securities loans
and repurchase agreements, can generate taxable income.

<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
- --------------------------------------------------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
- --------------------------------------------------------------------------------
Long-term capital gains 10% 20%
</TABLE>

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

[left margin]
[graphic of pointing finger]

BUYING A DIVIDEND

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

22 American Century Investments 1-800-345-2021

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, each table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

Each table also includes some key statistics for the period as appropriate

* TOTAL RETURN --the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* EXPENSE RATIO --operating expenses as a percentage of average net assets

* NET INCOME RATIO --net investment income as a percentage of average net
assets

* PORTFOLIO TURNOVER --the percentage of the fund's buying and selling activit

www.americancentury.com American Century Investments 23

<TABLE>

<CAPTION>
TAX-FREE MONEY MARKET FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31

Per-Share Data
1999 1998 1997 1996 1995

<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 0.04 0.03 0.03 0.03
----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income .............. (0.03) (0.04) (0.03) (0.03) (0.03)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ............$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Return(1) ......................... 3.10% 3.70% 2.98% 3.19% 2.95%

Ratios/Supplemental Data
1999 1998 1997 1996 1995

Ratio of Operating Expenses
to Average Net Assets ..................... 0.31%(2) 0.04%(2) 0.67% 0.65% 0.66%

Ratio of Net Investment Income
to Average Net Assets ..................... 3.10%(2) 3.68%(2) 2.93% 3.12% 2.88%

Net Assets, End of Period (in thousands) ..$ 283,046 $ 444,277 $ 85,730 $ 91,118 $ 92,034

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

(2) The advisor voluntarily waived its management fee from August 1, 1997
through July 31, 1998. Effective August 1, 1998, the advisor began decreasing
the waiver by 0.10% of the fund's net assets on a monthly basis, until the
waiver expired in December 1998. In absence of the waiver, the ratio of
operating expenses to average net assets and the ratio of net investment
income to average net assets would have been 0.50% and 2.91% for 1999, and
0.52% and 3.20% for 1998, respectively.

24 American Century Investments 1-800-345-2021

LIMITED-TERM TAX-FREE FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31 (except as noted)

Per-Share Data
1999 1998(1) 1997(1) 1996(1) 1995(1) 1994(1)

Net Asset Value, Beginning of Period ......$ 10.16 $ 10.11 $ 10.08 $ 10.09 $ 9.95 $ 10.04
--------- ---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income ................... 0.40 0.24 0.41 0.43 0.44 0.36
Net Realized and Unrealized Gain (Loss)
on Investment Transactions .............. 0.01 0.05 0.10 (0.01) 0.14 (0.09)
--------- ---------- ---------- ---------- ---------- ----------
Total From Investment Operations ........ 0.41 0.29 0.51 0.42 0.58 0.27
--------- ---------- ---------- ---------- ---------- ----------
Distributions
From Net Investment Income .............. (0.40) (0.24) (0.41) (0.43) (0.44) (0.36)
From Net Realized Gains on
Investment Transactions ................. (0.03) -- (0.07) -- -- --
--------- ---------- ---------- ---------- ---------- ----------
Total Distributions ..................... (0.43) (0.24) (0.48) (0.43) (0.44) (0.36)
--------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ............$ 10.14 $ 10.16 $ 10.11 $ 10.08 $ 10.09 $ 9.95
========= ========== ========== ========== ========== ==========
Total Return(2) ......................... 4.15% 2.87% 5.22% 4.26% 5.95% 2.75%

Ratios/Supplemental Data
1999 1998(1) 1997(1) 1996(1) 1995(1) 1994(1)

Ratio of Operating Expenses
to Average Net Assets ..................... 0.51% 0.52%(3) 0.59% 0.38%(4) --(4) --(4)

Ratio of Net Investment Income
to Average Net Assets ..................... 3.93% 4.04%(3) 4.05% 4.28% 4.38% 3.62%

Portfolio Turnover Rate ................... 41% 28% 74% 68% 78% 42%

Net Assets, End of Period
(in thousands) ............................$ 41,117 $ 38,410 $ 36,437 $ 49,866 $ 58,837 $ 60,857

(1) The period ended May 31, 1998 represents a seven month reporting period. The
fund's fiscal year end was changed from October 31 to May 31 during the
period. Periods prior to 1998 are based on a fiscal year ended October 31.

(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.

(4) The advisor 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%.

www.americancentury.com American Century Investments 25

INTERMEDIATE-TERM TAX-FREE FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31 (except as noted)

Per-Share Data
1999 1998(1) 1997(1) 1996(1) 1995(1) 1994(1)

Net Asset Value, Beginning of Period ....$ 10.52 $ 10.46 $ 10.35 $ 10.45 $ 10.01 $ 10.75
----------- ----------- ----------- ----------- ----------- ----------
Income From Investment Operations
Net Investment Income ................... 0.48 0.28 0.49 0.48 0.49 0.48
Net Realized and Unrealized Gain (Loss)
on Investment Transactions ............ (0.05) 0.08 0.21 (0.03) 0.52 (0.61)
----------- ----------- ----------- ----------- ----------- ----------
Total From Investment Operations ........ 0.43 0.36 0.70 0.45 1.01 (0.13)
----------- ----------- ----------- ----------- ----------- ----------
Distributions
From Net Investment Income .............. (0.48) (0.28) (0.49) (0.48) (0.49) (0.48)
From Net Realized Gains on
Investment Transactions ............... (0.08) (0.02) (0.10) (0.07) (0.08) (0.13)
----------- ----------- ----------- ----------- ----------- ----------
Total Distributions ..................... (0.56) (0.30) (0.59) (0.55) (0.57) (0.61)
----------- ----------- ----------- ----------- ----------- ----------
Net Asset Value, End of Period ..........$ 10.39 $ 10.52 $ 10.46 $ 10.35 $ 10.45 $ 10.01
=========== =========== =========== =========== =========== ==========
Total Return(2) ......................... 4.07% 3.50% 6.88% 4.47% 10.41% (1.25)%

Ratios/Supplemental Data
1999 1998(1) 1997(1) 1996(1) 1995(1) 1994(1)

Ratio of Operating Expenses
to Average Net Assets ................... 0.51% 0.51%(3) 0.58% 0.60% 0.60% 0.60%

Ratio of Net Investment Income
to Average Net Assets ................... 4.52% 4.62%(3) 4.71% 4.66% 4.77% 4.59%

Portfolio Turnover Rate ................. 32% 17% 35%(4) 39% 32% 74%

Net Assets, End of Period
(in thousands) ..........................$ 149,678 $ 137,907 $ 132,416 $ 80,568 $ 80,248 $ 81,400

(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.

(4) Purchases, sales, and market value amounts for Benham Intermediate-Term
Tax-Free Fund prior to the merger were excluded from the portfolio turnover
calculation. See Note 5 of the "Notes to Financial Statements" in the Annual
Report dated May 31, 1999.

26 American Century Investments 1-800-345-2021

LONG-TERM TAX-FREE FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31 (except as noted)

Per-Share Data
1999 1998(1) 1997(1) 1996(1) 1995(1) 1994(1)

Net Asset Value, Beginning of Period ....$ 10.81 $ 10.75 $ 10.58 $ 10.54 $ 9.75 $ 11.10
----------- ----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net Investment Income ................. 0.52 0.31 0.55 0.53 0.53 0.52
Net Realized and Unrealized Gain (Loss)
on Investment Transactions ............ (0.15) 0.13 0.33 0.04 0.83 (1.01)
----------- ----------- ----------- ----------- ----------- -----------
Total From Investment Operations ........ 0.37 0.44 0.88 0.57 1.36 (0.49)
----------- ----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income .............. (0.52) (0.31) (0.55) (0.53) (0.53) (0.52)
From Net Realized Gains
on Investment Transactions ............ (0.16) (0.07) (0.16) -- (0.04) (0.34)
In Excess of Net Realized Gains
on Investment Transactions ............ (0.02) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions ..................... (0.70) (0.38) (0.71) (0.53) (0.57) (0.86)
----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ..........$ 10.48 $ 10.81 $ 10.75 $ 10.58 $ 10.54 $ 9.75
=========== =========== =========== =========== =========== ===========
Total Return(2) ......................... 3.44% 4.18% 8.59% 5.60% 14.45% (4.70)%

Ratios/Supplemental Data
1999 1998(1) 1997(1) 1996(1) 1995(1) 1994(1)

Ratio of Operating Expenses
to Average Net Assets ................... 0.51% 0.51%(3) 0.58% 0.59% 0.59% 0.60%

Ratio of Net Investment Income
to Average Net Assets ................... 4.86% 4.96%(3) 5.16% 5.06% 5.24% 5.00%

Portfolio Turnover Rate ................. 80% 47% 65%(4) 60% 61% 66%

Net Assets, End of Period
(in thousands) ..........................$ 117,584 $ 116,615 $ 108,868 $ 60,772 $ 57,997 $ 50,964

(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.

(4) Purchases, sales, and market value amounts for Benham Long-Term Tax-Free
Fund prior to the merger were excluded from the portfolio turnover
calculation. See Note 5 of the "Notes to Financial Statements" in the Annual
Report dated May 31, 1999.

www.americancentury.com American Century Investments 27

HIGH-YIELD MUNICIPAL FUND
Investor Class
For a Share Outstanding Throughout the Years Ended May 31 (except as noted)

Per-Share Data
1999 1998(1)

Net Asset Value, Beginning of Period ............................$ 10.08 $ 9.99
---------- ----------
Income From Investment Operations
Net Investment Income ........................................ 0.54 0.09
Net Realized and Unrealized Gain on Investment Transactions .. 0.07 0.09
---------- ----------
Total From Investment Operations ............................. 0.61 0.18
---------- ----------
Distributions
From Net Investment Income ................................... (0.54) (0.09)
From Net Realized Gains on Investment Transactions ........... (0.03) --
---------- ----------
Total Distributions .......................................... (0.57) (0.09)
---------- ----------
Net Asset Value, End of Period ..................................$ 10.12 $ 10.08
========== ==========
Total Return(2) ................................................. 6.18% 1.81%

Ratios/Supplemental Data
1999 1998(1)

Ratio of Operating Expenses to Average Net Assets(3) ............ 0.01% --

Ratio of Net Investment Income to Average Net Assets(3) ......... 5.28% 5.38%(4)

Portfolio Turnover Rate ......................................... 92% 44%

Net Assets, End of Period (in thousands) ........................$ 42,068 $ 18,788

(1) March 31, 1998 (inception) 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) The advisor voluntarily agreed to pay all expenses of the fund from March
31, 1998 (inception) through April 30, 1999. In absence of the waiver, the
ratio of operating expenses to average net assets would have been 0.64% for
both periods (annualized for the period in 1998) and the ratio of net
investment income to average net assets would have been 4.66% and 4.74%
(annualized), for the year ended May 31, 1999 and the period March 31, 1998
through May 31, 1998, respectively.

(4) Annualized.

</TABLE>

28 American Century Investments 1-800-345-2021

NOTES

www.americancentury.com American Century Investments

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

Annual and Semiannual Reports

Statement of Additional Information

You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location
and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
The SEC will charge a fee for copying the
documents.)

Investment Company Act File No. 811-4025

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

1-800-345-2021 or 816-531-5575

9910
SH-PRS-17437

<PAGE>
AMERICAN CENTURY

Statement of Additional Information

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

OCTOBER 1, 1999

American Century
Municipal Trust

THIS STATEMENT OF ADDITIONAL INFORMATION ADDS TO THE DISCUSSION IN THE FUNDS'
PROSPECTUSES, DATED OCTOBER 1, 1999, BUT IS NOT A PROSPECTUS. THE STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FUNDS' CURRENT
PROSPECTUSES. IF YOU WOULD LIKE A COPY OF A PROSPECTUS, PLEASE CONTACT US AT THE
ADDRESS OR TELEPHONE NUMBERS LISTED ON THE BACK COVER OR VISIT AMERICAN
CENTURY'S WEB SITE AT WWW.AMERICANCENTURY.COM.

THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES BY REFERENCE CERTAIN
INFORMATION THAT APPEARS IN THE FUNDS' ANNUAL AND SEMIANNUAL REPORTS, WHICH ARE
DELIVERED TO ALL SHAREHOLDERS. YOU MAY OBTAIN A FREE COPY OF THE FUNDS' ANNUAL
OR SEMIANNUAL REPORT BY CALLING 1-800-345-2021.

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American
Century

STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 1, 1999

TABLE OF CONTENTS

The Funds' History ........................................................ 2
Fund Investment Guidelines ................................................ 2
Florida Municipal Money Market Fund and
Florida Intermediate-Term Municipal Fund ............................ 2
Arizona Intermediate-Term Municipal Fund ............................... 3
Tax-Free Money Market Fund,
Limited-Term Tax-Free Fund,
Intermediate-Term Tax-Free Fund
and Long-Term Tax Free Fund ......................................... 3
High-Yield Municipal Fund .............................................. 4
Credit Quality and Maturity Guidelines ................................. 4
Detailed Information About the Funds ...................................... 5
Investment Strategies and Risks ........................................ 5
Investment Policies .................................................... 15
Temporary Defensive Measures ........................................... 16
Portfolio Turnover ..................................................... 16
Management ................................................................ 17
The Board of Trustees .................................................. 17
Officers ............................................................... 19
The Funds' Principal Shareholders ......................................... 21
Service Providers ......................................................... 21
Investment Advisor ..................................................... 21
Transfer Agent and Administrator ....................................... 24
Distributor ............................................................ 24
Other Service Providers ................................................... 24
Custodian Banks ........................................................ 24
Independent Accountants ................................................ 25
Brokerage Allocation ...................................................... 25
Information About Fund Shares ............................................. 25
Buying and Selling Fund Shares ......................................... 25
Valuation of a Fund's Securities ....................................... 25
Money Market Funds .................................................. 26
Non-Money Market Funds .............................................. 26
Taxes ..................................................................... 27
Federal Income Tax ..................................................... 27
How Fund Performance Information is Calculated ............................ 28
Financial Statements ...................................................... 30
Explanation of Fixed-Income Securities Ratings ............................ 30

Statement of Additional Information 1

THE FUNDS' HISTORY

American Century Municipal Trust is a registered open-end management
investment company that was organized as a Massachusetts business trust on May
1, 1984. From then until January 1997, it was known as Benham Municipal Income
Trust. Throughout this Statement of Additional Information we refer to American
Century Municipal Trust as the Trust.

Each fund described in this Statement of Additional Information is a
separate series of the Trust and operates for many purposes as if it were an
independent company. Each fund has its own investment objective, strategy,
management team, assets, tax identification and stock registration number.

Ticker Inception
Fund Symbol Date
- --------------------------------------------------------------------------------
Florida Municipal Money Market BEFXX 04/11/94
Florida Intermediate-Term Municipal ACBFX 04/11/94
Arizona Intermediate-Term Municipal BEAMX 04/11/94
Tax-Free Money Market BNTXX 07/31/84
Limited-Term Tax-Free TWTSX 03/01/93
Intermediate-Term Tax-Free TWT1X 03/02/87
Long-Term Tax-Free TWTLX 03/02/87
High-Yield Municipal ABHY2 03/31/98
- --------------------------------------------------------------------------------

FUND INVESTMENT GUIDELINES

This section explains the extent to which the funds' advisor, American
Century Investment Management, Inc., can use various investment vehicles and
strategies in managing a fund's assets. Descriptions of the investment
techniques and risks associated with each appear in the section, "Investment
Strategies and Risks," which begins on page 5. In the case of the funds'
principal investment strategies, these descriptions elaborate upon discussions
contained in the Prospectuses.

Each fund (except High-Yield Municipal, Florida Municipal Money Market,
Florida Intermediate-Term Municipal and Arizona Intermediate-Term Municipal) is
a diversified open-end investment company as defined in the Investment Company
Act of 1940 (the Investment Company Act). Diversified means that, with respect
to 75% of its total assets, each fund will not invest more than 5% of its total
assets in the securities of a single issuer.

Tax-Free Money Market and Florida Municipal Money Market each operate
pursuant to Rule 2a-7 under the Investment Company Act. That rule permits the
valuation of portfolio securities on the basis of amortized cost. To rely on the
rule, each fund must be diversified with regard to 100% of its assets other than
U.S. government securities. This operating policy is more restrictive than the
Investment Company Act, which requires a diversified investment company to be
diversified with regard to only 75% of its assets.

To meet federal tax requirements for qualification as a regulated investment
company, each fund must limit its investments so that at the close of each
quarter of its taxable year (1) no more than 25% of its total assets are
invested in the securities of a single issuer (other than the U.S government or
a regulated investment company), and (2) with respect to at least 50% of its
total assets, no more than 5% of its total assets are invested in the securities
of a single issuer.

In general, within the restrictions outlined here and in the funds'
Prospectuses, the fund managers have broad powers to decide how to invest fund
assets, including the power to hold them uninvested.

So long as a sufficient number of acceptable securities are available, the
fund managers intend to keep the funds fully invested. However, under
exceptional conditions, the funds may assume a defensive position, temporarily
investing all or a substantial portion of their assets in cash or short-term
securities.

FLORIDA MUNICIPAL MONEY MARKET FUND
FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

The Florida Municipal Money Market Fund and Florida Intermediate-Term
Municipal Fund 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 funds are designed for individuals in upper tax brackets seeking income
free from regular federal income tax, although the funds may generate some
taxable income. The 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 funds by themselves do not constitute a balanced investment plan.

2 American Century Investments

Each 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 fund will invest
at least 80% of its net assets in obligations with interest exempt from the
regular federal income tax. The funds are not limited, however, in their
investments in securities that are subject to the Federal Alternative Minimum
Tax (AMT).

In addition, each 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 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 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.

A 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.

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.

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

The 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, the fund will invest
at least 80% of its net assets in obligations with interest exempt from the
regular federal income tax. The fund is not limited, however, in its investments
in securities that are subject to the 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.

The 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 for purposes of the 80% policy
noted above.

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

Tax-Free Money Market Fund, Limited-Term Tax-Free Fund, Intermediate-Term
Tax-Free Fund, and Long-Term Tax-Free Fund 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 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.

Statement of Additional Information 3

The 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
AMT.

HIGH-YIELD MUNICIPAL FUND

High-Yield Municipal Fund 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.

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

The 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 regular federal
income tax may not be exempt from the AMT.

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.

CREDIT QUALITY AND MATURITY GUIDELINES

THE MONEY MARKET FUNDS

Tax-Free Money Market Fund and Florida Municipal Money Market Fund seek to
maintain a $1.00 share price, although there is no guarantee they will be able
to do so. Shares of the funds are neither insured nor guaranteed by the U.S.
government.

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.

In selecting investments for the money market funds, the advisor 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 portfolio maturity of
90 days or less; and (3) restricts its investments to high-quality obligations
determined by the advisor to present minimal credit risks, pursuant to
guidelines established by the Board of Trustees.

To be considered high-quality, an obligation must be one of the following:
(1) a U.S. government obligation; (2) rated, or issued by an issuer rated with
respect to a class of short-term obligations, within the two highest rating
categories for short-term debt obligations by at least two nationally recognized
statistical rating organizations, rating agencies, or one if only one has rated
the obligation; or (3) an unrated obligation judged by the advisor, pursuant to
guidelines established by the Board of Trustees, to be of comparable quality.

The fund managers intend to buy only obligations that are designated as
first-tier securities as defined by the SEC; that is, securities with the
highest rating.

The acquisition of securities that are unrated or rated by only one rating
agency must be approved or ratified by the Board of Trustees.

NON-MONEY MARKET FUNDS (EXCEPT HIGH-YIELD MUNICIPAL)

Limited-Term Tax-Free, Intermediate-Term Tax-Free, Long-Term Tax-Free,
Arizona Intermediate-Term Municipal and Florida Intermediate-Term Municipal have
identical policies governing the quality of securities in which they may invest.
The funds differ in their maturity criteria as stated in the Prospectus.

In terms of credit quality, each of these funds 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

4 American Century Investments

rating agency; and (3) unrated obligations judged by the advisor, under the
direction of the Board of Trustees, to be of comparable quality.

DETAILED INFORMATION ABOUT THE FUNDS

INVESTMENT STRATEGIES AND RISKS

This section describes each of the investment vehicles and strategies that
the fund managers can use in managing a fund's assets. It also details the risks
associated with each, because each technique contributes to a fund's overall
risk profile.

CONCENTRATION IN TYPES OF MUNICIPAL ACTIVITIES

From time to time, a significant portion of a fund's assets may be invested
in municipal obligations that are 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
government agency or legislative body promulgated or enacted new environmental
protection requirements for utility providers, projects financed by utility
bonds could suffer as a group. 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 or means of financing municipal projects, material or
manpower shortages and declining demand for projects or facilities financed by
the municipal bonds.

ABOUT THE RISKS AFFECTING ARIZONA MUNICIPAL SECURITIES

As noted in the Prospectus, the Arizona Intermediate-Term Municipal Fund is
susceptible to events that affect issuers of Arizona municipal obligations.
These include possible adverse affects of Arizona constitutional amendments,
legislative measures, voter initiatives and other matters described below.

The following information about risk factors is provided in view of the
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 risks associated with investing in
securities of these issuers. While the advisor 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's population has been, and is
projected to continue to be, one of the fastest growing 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 economies 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.

Statement of Additional Information 5

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.

ABOUT THE RISKS AFFECTING FLORIDA MUNICIPAL SECURITIES

As noted in the Prospectus, the Florida Municipal Money Market and Florida
Intermediate-Term Municipal funds are susceptible to events that affect issuers
of Florida municipal obligations. These include possible adverse affects of
Florida constitutional amendments, legislative measures, voter initiatives and
other matters described below.

The following information about risk factors is provided in view of the
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 risks associated with
investing in securities of these issuers. While the advisor has not
independently verified this information, it has no reason to believe the
information is inaccurate.

Because the 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

6 American Century Investments

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.

ABOUT THE RISKS AFFECTING 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 one million persons -- a record level.
Unemployment, however, still remains high at 13.8%.

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.

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 voters who favored
continuation of Commonwealth status, the vast majority were for statehood. In
February 1997, legislation was introduced in Congress proposing a mechanism to
permanently settle the political relationship with the United States.

Statement of Additional Information 7

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 Internal Revenue 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 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.

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, the 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.

Revenue Anticipation Warrants, or reimbursement warrants, are issued to meet
the cash flow needs of state governments at the end of a fiscal year and in the
early weeks of the following fiscal year. These warrants are payable from
unapplied money in the state's General Fund, including the proceeds of revenue
anticipation notes issued following enactment of a state budget or the proceeds
of refunding warrants issued by the state.

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

8 American Century Investments

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), a type of Revenue Bond, 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 depend solely on the ability of the
facility's user to meet 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 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 from financial
intermediaries. Floating-rate securities, or floaters, 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 typically is based on an index. These rate formulas are designed to result
in a market value for the VRDO or FRDO that approximates par value.

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 advisor expects that the funds will pay more for securities with puts
attached than for securities without these liquidity features. The advisor 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 fund's investments.

To ensure that the interest on municipal securities subject to puts is
tax-exempt to the funds, the advisor 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. When 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 advisor under the direction of the Board
of Trustees.

TENDER OPTION BONDS

Tender Option Bonds (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.

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 the put agreement on a tender option agreement will
terminate if the underlying bond is downgraded or defaults. Because of this, the
advisor 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 rating agency.

Statement of Additional Information 9

The advisor also takes steps to minimize the risk that the fund may realize
taxable income as a result of holding TOBs. These steps may include
consideration of (1) legal opinions relating to the tax-exempt status of the
underlying municipal bonds, (2) legal opinions relating to the tax ownership of
the underlying bonds, and (3) other elements of the structure that could result
in taxable income or other adverse tax consequences. After purchase, the advisor
monitors factors related to the tax-exempt status of the fund's TOB holdings in
order to minimize the risk of generating taxable income.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

The funds may engage in municipal 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, a
fund assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. While the 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, cash equivalents or other appropriate liquid securities 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 the sale 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.

As an operating policy, no fund will commit more than 50% of its total
assets to when-issued or forward commitment agreements. If fluctuations in the
value of securities held cause more than 50% of a fund's total assets to be
committed under when-issued or forward commitment agreements, the fund managers
need not sell such agreements, but it will be restricted from entering into
further agreements on behalf of the fund until the percentage of assets
committed to such agreements is below 50% of total assets.

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 a lessor 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
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 sale contracts (which normally
provide for title to the leased asset to pass to the government issuer) have
evolved as a way 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, which provide
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

The funds (except the money market funds) may hold inverse floaters. 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 inverse floaters goes

10 American Century Investments

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
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. A Dutch Auction is an auction system
in which the price of the security is gradually lowered until it meets a
responsive bid and is sold. 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:

* Floater holders receive interest based on rates set at a six-month
interval or 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.

* 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 the 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. The interest rates on inverse floaters may be significantly
reduced, even to zero, if interest rates rise.

LOWER-QUALITY BONDS

As indicated in the Prospectus, an investment in High-Yield Municipal
carries greater risk than an investment in the other funds because the fund may
invest without limitation in lower-rated bonds and unrated bonds judged by the
advisor to be of comparable quality (collectively, lower-quality bonds).

While the market values of higher-quality bonds tend to correspond to market
interest rate changes, the market values of lower-quality bonds tend to reflect
the financial condition of their issuers.

Projects financed through the issuance of lower-quality bonds are often
highly leveraged. The issuer's ability to service its debt obligations may be
adversely affected by an economic downturn, a period of rising interest rates,
the issuer's inability to meet projected revenue forecasts, or a lack of needed
additional financing.

Lower-quality bonds generally are unsecured and often are subordinated to
other obligations of the issuer. These bonds frequently have call or buy-back
features that permit the issuer to call or repurchase the bond from the holder.
Premature disposition of a lower-quality bond due to a call or buy-back feature,
deterioration of the issuer's creditworthiness, or a default may make it
difficult for the advisor to manage the flow of income to the fund, which may
have negative tax implications for shareholders.

The market for lower-quality bonds tends to be concentrated among a smaller
number of dealers

Statement of Additional Information 11

than the market for higher-quality bonds. This market is dominated by dealers
and institutions (including mutual funds), rather than by individuals. To the
extent that a secondary trading market for lower- quality bonds exists, it may
not be as liquid as the secondary market for higher-quality bonds. Limited
liquidity in the secondary market may adversely affect market prices and hinder
the advisor's ability to dispose of particular bonds when it determines that it
is in the best interest of the fund to do so. Reduced liquidity also may hinder
the advisor's ability to obtain market quotations for purposes of valuing the
fund's portfolio and determining its net asset value.

The advisor continually monitors securities to determine their relative
liquidity.

A fund may incur expenses in excess of its ordinary operating expenses if it
becomes necessary to seek recovery on a defaulted bond, particularly a
lower-quality bond.

REPURCHASE AGREEMENTS

Each fund may invest in repurchase agreements when such transactions present
an attractive short-term return on cash that is not otherwise committed to the
purchase of securities pursuant to the investment policies of that fund.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to purchase it on a specified
date in the future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the fund's money is invested in the
security.

Because the security purchased constitutes security for the repurchase
obligation, a repurchase agreement can be considered a loan collateralized by
the security purchased. The fund's risk is the ability of the seller to pay the
agreed-upon repurchase price on the repurchase date. If the seller defaults, the
fund may incur costs in disposing of the collateral, which would reduce the
amount realized thereon. If the seller seeks relief under the bankruptcy laws,
the disposition of the collateral may be delayed or limited. To the extent the
value of the security decreases, the fund could experience a loss.

The funds will limit repurchase agreement transactions to securities issued
by the U.S. government and its agencies and instrumentalities, and will enter
into such transactions with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the funds' Board of Trustees.

No fund will invest more than 15% of its assets (10% for the money market
funds) in repurchase agreements maturing in more than seven days.

SHORT-TERM SECURITIES

Under certain circumstances, the non-money market funds may invest in
short-term municipal or U.S. government securities, including money market
instruments (short-term securities). 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.
However, the advisor intends to minimize such investments and, when suitable
short-term municipal securities are unavailable, may allow the funds to hold
cash to avoid generating taxable dividends.

Except as otherwise required for temporary defensive purposes, the advisor
does not expect the non-money market funds to invest more than 35% of total
assets in short-term securities.

Pursuant to an exemptive order from the Securities and Exchange Commission
(SEC), each non-money market fund may invest in shares of any money market funds
to facilitate cash management provided that the investment is consistent with
the funds' investment policies and restrictions.

The funds may invest up to 5% of their total assets in shares of any money
market fund. For the non-money market funds, these investments may include
investments in money market funds managed by the advisor. Any investments in
money market funds must be consistent with the investment objectives of the fund
making the investment.

FUTURES AND OPTIONS

Each non-money market 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.

12 American Century Investments

Although other techniques may be used to control a fund's exposure to market
fluctuations, the use of futures contracts may 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 the
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. government agency. The funds may engage in
futures and options transactions based on securities indexes such as the Bond
Buyer Index of Municipal Bonds that are consistent with the fund's investment
objectives. The 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 Bond
Buyer 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 open positions in a futures contract, a fund would
be required to make a good faith margin deposit in cash or government securities
with a futures broker or custodian. A margin deposit is intended to assure
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 futures broker for as long as the contract remains open and do not
constitute margin transactions for purposes of the funds' 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 advisor 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 could suffer losses 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 contracts, and
there is no assurance that a liquid secondary market will exist for any
particular futures contract at any particular time. Consequently, it may not be
possible to close a futures position when the advisor 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 advisor would not otherwise
elect to do so. In addition, a fund may be required to deliver or take delivery
of instruments underlying futures contracts it holds. The advisor will seek to
minimize these risks by limiting the contracts entered 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 a fund had different maturities than
those of the portfolio securities being hedged. Such imperfect correlation may
give rise to circumstances in which a fund loses money on a

Statement of Additional Information 13

futures contract at the same time that it experiences a decline in the value of
its "hedged" portfolio securities. A fund also could lose margin payments it has
deposited with a margin broker, if, for example, the broker became 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 it 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, the funds would give up some
ability to participate in a price increase on the underlying security. If a fund
were to engage in options transactions, it would own the futures contract at the
time a call were 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 non-money market fund may enter into futures contracts, options or
options on futures contracts.

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 total assets. To the extent required by law, each
fund will set aside cash and appropriate liquid assets in a segregated account
to cover its obligations related to futures contracts and options.

The funds intend to comply with tax rules applicable to regulated investment
companies, including a requirement that capital gains from the sale of
securities held less than three months constitute less than 30% of a fund's
gross income for each fiscal year. Gains on some futures contracts and options
are included in this 30% calculation, which may limit the funds' investments in
such instruments.

RESTRICTED AND ILLIQUID SECURITIES

The funds may, from time to time, purchase restricted or illiquid
securities, including Rule 144A securities, when they present attractive
investment opportunities that otherwise meet the funds' criteria for selection.
Rule 144A securities are securities that are privately placed with and traded
among qualified institutional investors rather than the general public. Although
Rule 144A securities are considered "restricted securities," they are not
necessarily illiquid.

With respect to securities 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, such determination to be based upon a
consideration of the readily available trading markets and the review of any
contractual restrictions. Accordingly, the Board of Trustees is responsible for
developing and establishing the guidelines and procedures for determining the
liquidity of Rule 144A securities. As allowed by Rule 144A, the Board of
Trustees of the funds has delegated the day-to-day function of determining the
liquidity of Rule 144A securities to

14 American Century Investments

the advisor. The Board retains the responsibility to monitor the
implementation of the guidelines and procedures it has adopted.

Because the secondary market for such securities is limited to certain
qualified institutional investors, the liquidity of such securities may be
limited accordingly and a fund may, from time to time, hold a Rule 144A or other
security that is illiquid. In such an event, the advisor will consider
appropriate remedies to minimize the effect on such fund's liquidity.

INVESTMENT POLICIES

Unless otherwise indicated, with the exception of the percentage limitations
on borrowing, the following restrictions apply at the time transactions are
entered into. Accordingly, any later increase or decrease beyond the specified
limitation resulting from a change in a fund's net assets will not be considered
in determining whether it has complied with its investment restrictions.

FUNDAMENTAL INVESTMENT POLICIES

The funds are subject to the following investment restrictions that 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.

For purposes of the investment restriction 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, electric and telephone will each be considered a
separate industry, and (d) personal credit and business credit businesses will
be considered separate industries.

Subject Policy
- --------------------------------------------------------------------------------
Senior Securities A fund may not issue senior securities, except as
permitted under the Investment Company Act.
- --------------------------------------------------------------------------------
Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or investment) in an
amount not exceeding 331/3% of the fund's total assets.
- --------------------------------------------------------------------------------
Lending A fund may 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.
- --------------------------------------------------------------------------------
Real Estate A fund may 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.
- --------------------------------------------------------------------------------
Concentration A fund may 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).
- --------------------------------------------------------------------------------
Underwriting A fund may 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.
- --------------------------------------------------------------------------------
Commodities A fund may 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 purchasing or selling options and
futures contracts or from investing in securities or other
instruments backed by physical commodities.
- --------------------------------------------------------------------------------
Control A fund may not invest for purposes of exercising control
over management.
- --------------------------------------------------------------------------------

Statement of Additional Information 15

NONFUNDAMENTAL INVESTMENT POLICIES

In addition, the funds are subject to the following additional investment
restrictions that are not fundamental and may be changed by the Board of
Trustees.

Subject Policy
- --------------------------------------------------------------------------------
Diversification A fund may not purchase additional investment
(Tax-Free Money Market, securities at any time during which outstanding
Limited-Term, borrowings exceed 5% of the total assets of the fund.
Intermediate-Term and
Long-Term Tax-Free)
- --------------------------------------------------------------------------------
Diversification To meet federal tax requirements for qualification as
(Florida Municipal a regulated investment company, each fund must limit
Money Market, its investments so that at the close of each quarter
Florida Intermediate-Term of its taxable year (1) no more than 25% of its total
Municipal, Arizona assets are invested in the securities of a single
Intermediate-Term issurer (other than the U.S government or a regulated
Municipal and investment company), and (2) with respect to at least
High-Yield Municipal) 50% of its total assets, no more than 5% of its total
assets are invested in the securities of a single
issuer.
- --------------------------------------------------------------------------------
Futures and options The money market funds may not purchase or sell
[money market funds only] futurescontracts 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.
- --------------------------------------------------------------------------------
Liquidity A fund may 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 seven days and in securities that are
illiquid by virtue of legal or contractual
restrictions on resale or the absence of areadily
available market.
- --------------------------------------------------------------------------------
Short Sales A fund may 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.
- --------------------------------------------------------------------------------
Margin A fund may not purchase securities on margin, except
to 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.
- --------------------------------------------------------------------------------
TEMPORARY DEFENSIVE MEASURES

For temporary defensive purposes, a fund may invest in securities that may
not fit its investment objective or its stated market. During a temporary
defensive period, a fund may direct its assets to the following investment
vehicles: (1) interest-bearing bank accounts or certificates of deposit; (2)
U.S. government securities and repurchase agreements collateralized by U.S.
government securities; and (3) other money market funds.

PORTFOLIO TURNOVER

Under normal conditions, the funds' annual portfolio turnover rates are not
expected to exceed 100%. Because a higher turnover rate increases transaction
costs and may increase taxable capital gains, the managers carefully weigh the
potential benefits of short-term investing against these considerations.

The funds' portfolio turnover rates (except those of the money market funds)
are listed in the Financial Highlights table in the Prospectuses. Because of the
short-term nature of the money market funds' investments, portfolio turnover
rates are not generally used to evaluate their trading activities.

16 American Century Investments

MANAGEMENT

THE BOARD OF TRUSTEES

The Board of Trustees oversees the management of the funds and meets at
least quarterly to review reports about fund operations. Although the Board of
Trustees does not manage the funds, it has hired the advisor to do so.
Two-thirds of the trustees are independent of the funds' advisor, that is, they
are not employed by and have no financial interest in the advisor.

The individuals listed in the table below whose names are marked by an
asterisk (*) are interested persons of the funds (as defined in the Investment
Company Act) by virtue of, among other considerations, their affiliation with
either the funds; the advisor, American Century Investment Management, Inc.
(ACIM); the funds' agent for transfer and administrative services, American
Century Services Corporation (ACSC); the parent corporation, American Century
Companies, Inc. (ACC) or ACC's subsidiaries; the funds' distribution agent and
co-administrator, Funds Distributor, Inc. (FDI); or other funds advised by the
advisor. Each trustee listed below serves as a trustee or director of seven
registered investment companies in the American Century family of funds, which
are also advised by the advisor.

Name (Age) Position(s) Held Principal Occupation(s)
Address With Fund During Past Five Years
- ------------------------------------------------------------------------------
Albert A. Eisenstat (69) Trustee Independent Director, Commercial
1665 Charleston Road Metals Co. (1982 to present)
Mountain View, CA 94043 Independent Director, Sungard Data
Systems (1991 to present) General
Partner, Discovery Ventures
(venture capital firm, 1996 to
1998) Independent Director,
Business Objects S/A (software &
programming, 1994 to present)
- ------------------------------------------------------------------------------
Ronald J. Gilson (53) Trustee Charles J. Meyers Professor of Law
1665 Charleston Road and Business, Stanford Law School
Mountain View, CA 94043 (1979 to present)
Mark and Eva Stern Professor of Law
and Business, Columbia University
School of Law (1992 to present)
Counsel, Marron, Reid & Sheehy (a
San Francisco law firm, 1984 to
present)
- ------------------------------------------------------------------------------
William M. Lyons* (43) Trustee President, Chief Operating Officer
4500 Main Street and Assistant Secretary, ACC
Kansas City, MO 64111 Executive Vice President, Chief
Operating Officer and Secretary,
ACSC and ACIS
- ------------------------------------------------------------------------------
Myron S. Scholes (58) Trustee Limited Partner, Long-Term Capital
1665 Charleston Road Management (February 1999 to
Mountain View, CA 94043 present) Principal, Long-Term
Capital Management (investment
advisor, 1993 to January 1999)
Frank E. Buck Professor of Finance,
Stanford Graduate School of
Business (1981 to present)
Director, Dimensional Fund Advisors
(investment advisor, 1982 to
present) Director Smith Breeden
Family of Funds (1992 to present)
- ------------------------------------------------------------------------------
Kenneth E. Scott (70) Trustee Ralph M. Parsons Professor of Law
1665 Charleston Road amd Business, Stanford Law School
Mountain View, CA 94043 (1972 to present)
Director, RCM Capital Funds, Inc.
(1994 to present)
- ------------------------------------------------------------------------------

Statement of Additional Information 17

Name (Age) Position(s) Held Principal Occupation(s)
Address With Fund During Past Five Years
- ------------------------------------------------------------------------------
Isaac Stein (52) Trustee Director, Raychem Corporation
1665 Charleston Road (electrical equipment, 1993 to
Mountain View, CA 94043 present) President, Waverley
Associates, Inc. (private
investment firm, 1983 to present)
Director, ALZA Corporation
(pharmaceuticals, 1987 to present)
Trustee, Stanford University
(1994 to present) Chairman,
Stanford Health Services (1994 to
present)
- ------------------------------------------------------------------------------
James E. Stowers III* (40) Trustee, Chief Executive Officer and
4500 Main Street Chairman of Director, ACC President, Chief
Kansas City, MO 64111 the Board Executive Officer and Director,
ACSC and ACIS Son of James E.
Stowers, Jr. (founder)
- ------------------------------------------------------------------------------
Jeanne D. Wohlers (54) Trustee Director, Indus International
1665 Charleston Road (software solutions, January 1999
Mountain View, CA 94043 to present) Director and Partner,
Windy Hill Productions, LP
(educational software, 1994 to
1998) Director, Quintus
Corporation (automation solutions,
1995 to present)
- ------------------------------------------------------------------------------

COMMITTEES

The Board has four committees to oversee specific functions of the funds'
operations. Information about these committees appears in the table below. The
trustee first named acts as chairman of the committee:

<TABLE>
Committee Members Function of Committee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>

Audit Jeanne D. Wohlers The Audit Committee selects and oversees the activities of the
Albert A. Eisenstat Trust's independent auditor. The committee receives reports from
Kenneth E. Scott the advisor's Internal Audit Department, which is accountable
solely to the committee. The committee also receives reporting
about compliance matters affecting the Trust.
- ----------------------------------------------------------------------------------------------------------
Nominating Kenneth E. Scott The Nominating Committee primarily considers and recommends
Myron S. Scholes individuals for nomination as trustees. The name of potential trustee
Albert A. Eisenstat candidates are drawn from a number of sources, including
Ronald J. Gilson recommendations from members of the Board, management and shareholders.
Isaac Stein committee also reviews and makes recommendations to the Board with
Jeanne D. Wohlers This respect to the composition of Board committees and other Board-
related matters, including its organization, size, composition,
responsibilities, functions and compensation.
- ----------------------------------------------------------------------------------------------------------
Portfolio Myron S. Scholes The Portfolio Committee reviews quarterly the investment activities and
Ronald J. Gilson strategies used to manage fund assets. The committee regularly receives
Isaac Stein reports from portfolio managers, credit analysts and other investment
personnel concerning the funds' investments.
- ----------------------------------------------------------------------------------------------------------
Quality of Isaac Stein The Quality of Service Committee reviews the level and quality of transfer
Service William Lyons agent and administrative services provided to the funds and their
Ronald J. Gilson shareholders. It receives and reviews reports comparing those services
Myron S. Scholes to fund competitors and seeks to improve such services where feasible
and appropriate.
- ----------------------------------------------------------------------------------------------------------
</TABLE>

18 American Century Investments

COMPENSATION OF TRUSTEES

The trustees also serve as trustees for six American Century investment
companies other than American Century Municipal Trust. Each trustee who is not
an interested person as defined in the Investment Company Act receives
compensation for service as a member of the Board of all seven such companies
based on a schedule that takes into account the number of meetings attended and
the assets of the funds for which the meetings are held. These fees and expenses
are divided among the seven investment companies based, in part, upon their
relative net assets. Under the terms of the management agreement with the
advisor, the funds are responsible for paying such fees and expenses.

The following table shows the aggregate compensation paid by the Trust for
the periods indicated and by the seven investment companies served by this Board
to each trustee who is not an interested person as defined in the Investment
Company Act.

Aggregate Trustee Compensation for Fiscal Year Ended May 31, 1999
- -------------------------------------------------------------------------------
Total Total Compensation
Compensation from the
from the American Century
Name of Trustee Funds(1) Family of Funds(2)
- -------------------------------------------------------------------------------
Albert A. Eisenstat $13,571 $57,750
Ronald J. Gilson 13,917 66,500
Myron S. Scholes 13,424 55,250
Kenneth E. Scott 13,905 66,500
Isaac Stein 13,695 61,750
Jeanne D. Wohlers 13,832 64,750
- -------------------------------------------------------------------------------

(1) Includes compensation paid to the trustees during the fiscal year ended May
31, 1999, and also includes amounts deferred at the election of the
trustees under the American Century Mutual Funds Deferred Compensation Plan
for Non-Interested Directors and Trustees. The total amount of deferred
compensation included in the preceding table is as follows: Mr. Eisenstat,
$13,571; Mr. Gilson, $13,917; Mr. Scholes, $13,424; and Mr. Scott, $6,952.

(2) Includes compensation paid by the seven investment company members of the
American Century family of funds served by this Board.

The funds have adopted the American Century Deferred Compensation Plan for
Non-Interested Directors and Trustees. Under the plan, the independent trustees
may defer receipt of all or any part of the fees to be paid to them for serving
as trustees of the funds.

All deferred fees are credited to an account established in the name of the
trustees. The amounts credited to the account then increase or decrease, as the
case may be, in accordance with the performance of one or more of the American
Century funds that are selected by the trustee. The account balance continues to
fluctuate in accordance with the performance of the selected fund or funds until
final payment of all amounts credited to the account. Trustees are allowed to
change their designation of mutual funds from time to time.

No deferred fees are payable until such time as a trustee resigns, retires
or otherwise ceases to be a member of the Board of Trustees. Trustees may
receive deferred fee account balances either in a lump sum payment or in
substantially equal installment payments to be made over a period not to exceed
10 years. Upon the death of a trustee, all remaining deferred fee account
balances are paid to the trustee's beneficiary or, if none, to the trustee's
estate.

The plan is an unfunded plan and, accordingly, the funds have no obligation
to segregate assets to secure or fund the deferred fees. The rights of trustees
to receive their deferred fee account balances are the same as the rights of a
general unsecured creditor of the funds. The plan may be terminated at any time
by the administrative committee of the plan. If terminated, all deferred fee
account balances will be paid in a lump sum.

No deferred fees were paid to any trustee under the plan during the fiscal
year ended May 31, 1999.

OFFICERS

Background information for the officers of the funds is provided below. All
persons named as officers of the funds also serve in similar capacities for the
12 other investment companies advised by ACIM. Not all officers of the funds are
listed; only those officers with policy-making functions for the funds are
listed. No officer is compensated for his or her service as an officer of the
funds. The individuals listed in the table are interested persons of the funds
(as defined in the Investment Company Act) by virtue of, among other
considerations, their affiliation with either the funds; ACC; ACC's subsidiaries
(including ACIM and ACSC); or the funds' distributor (FDI), as specified in the
following table.

Statement of Additional Information 19

<TABLE>
Position
Name (Age) Held
Address With Fund Principal Occupation(s) During Past Five Years
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>

George A. Rio (44) President Executive Vice President and Director of Client Services, FDI
60 State St. (March 1998 to present)
Boston, MA 02109 Senior Vice President and Senior Key Account Manager,
Putnam Mutual Funds (June 1995 to March 1998)
Director Business Development, First Data Corporation
(May 1994 to June 1995)
- -------------------------------------------------------------------------------------------------------
Christopher J. Kelley (34) Vice Vice President and Associate General Counsel, FDI
60 State St. President (July 1996 to present)
Boston, MA 02109 Assistant Counsel, Forum Financial Group
(April 1994 to July 1996)
- -------------------------------------------------------------------------------------------------------
Mary A. Nelson (35) Vice Vice President and Manager of Treasury Services and
60 State St. President Administration, FDI (1994 to present
Boston, MA 02109 Assistant Vice President and Client Manager,
The Boston Company, Inc. (1989 to 1994)
- -------------------------------------------------------------------------------------------------------
Maryanne Roepke, CPA (43) Vice Senior Vice President and Treasurer, ACSC
4500 Main St. President
Kansas City, MO 64111 and Treasurer
- -------------------------------------------------------------------------------------------------------
David C. Tucker (41) Vice Senior Vice President and General Counsel, ACSC and ACIM
4500 Main St. President (June 1998 to present)
Kansas City, MO 64111 General Counsel, ACC (June 1998 to present)
Consultant to mutual fund industry (May 1997 to April 1998)
Vice President and General Counsel, Janus Companies
(1990 to 1997)
- --------------------------------------------------------------------------------------------------------
Douglas A. Paul (52) Secretary Vice President and Associate General Counsel, ACSC
1665 Charleston Road and Vice
Mountain View, CA 94043 President
- -------------------------------------------------------------------------------------------------------
C. Jean Wade (35) Controller Controller--Fund Accounting, ACSC
4500 Main St.
Kansas City, MO 64111
- -------------------------------------------------------------------------------------------------------
Jon Zindel (32) Tax Officer Vice President and Director of Taxation, ACSC (1996 to present)
4500 Main St. Vice President, ACIM (1999 to present)
Kansas City, MO 64111 Tax Manager, Price Waterhouse LLP (1989 to 1996)
- -------------------------------------------------------------------------------------------------------
</TABLE>

20 American Century Investments

THE FUNDS' PRINCIPAL SHAREHOLDERS

As of September 2, 1999, the following companies were the record owners of
more than 5% of a fund's outstanding shares:

Shareholder and Percentage
Fund of Shares Outstanding
- ----------------------------------------------------
Florida Municipal Margaret A. Benham
Money Market Astatula, FL -- 11.5%
Morgan Guaranty
New York, NY -- 6.6%
- ----------------------------------------------------
Florida Morgan Guaranty
Intermediate-Term New York, NY -- 34.4%
Municipal Charles Schwab & Company
San Francisco, CA -- 18.2%
American Century Investment
Management, Inc.
Kansas City, MO -- 5.3%
- ----------------------------------------------------
Arizona Charles Schwab & Company
Intermediate-Term San Francisco, CA -- 27.9%
Municipal
- ----------------------------------------------------
Intermediate-Term Charles Schwab & Company
Tax-Free San Francisco, CA -- 11.5%
American Century Investment
Management, Inc.
Kansas City, MO -- 11.5%
- ----------------------------------------------------
Long-Term Charles Schwab & Company
Tax-Free San Francisco, CA -- 6.1%
- ----------------------------------------------------
High-Yield American Century Investment
Municipal Management, Inc.
Kansas City, MO -- 12.7%
- ----------------------------------------------------

The funds are unaware of any other shareholders, beneficial or of record,
who own more than 5% of a fund's outstanding shares. As of September 2, 1999,
the officers and trustees of the funds, as a group, own less than 1% of any
fund's outstanding shares.

SERVICE PROVIDERS

The funds have no employees. To conduct the funds' day-to-day activities,
the funds have hired a number of service providers. Each service provider has a
specific function to fill on behalf of the funds and is described below.

ACIM and ACSC are both wholly owned by ACC. James E. Stowers, Jr., Chairman
of ACC, controls ACC by virtue of his ownership of a majority of its voting
stock.

INVESTMENT ADVISOR

A description of the responsibilities of the advisor appears in the
Prospectus under the heading "Management."

For the services provided to the funds, the advisor receives a monthly fee
based on a percentage of the average net assets of a 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 managed by the advisor (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 advisor 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 advisor (the Complex Fee). The Investment Category Fee and the Complex
Fee are then added to determine the unified management fee payable by a fund to
the advisor.

The schedules by which the Investment Category Fees are determined are as
follows:

INVESTMENT CATEGORY FEE SCHEDULE
FOR TAX-FREE MONEY MARKET AND FLORIDA
MUNICIPAL MONEY MARKET

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%
- --------------------------------

Statement of Additional Information 21

INVESTMENT CATEGORY FEE SCHEDULE FOR
LIMITED-TERM TAX-FREE, INTERMEDIATE-TERM
TAX-FREE, LONG-TERM TAX-FREE, ARIZONA
INTERMEDIATE-TERM MUNICIPAL, AND FLORIDA
INTERMEDIATE-TERM MUNICIPAL

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%
- -----------------------------------------------------------------

INVESTMENT CATEGORY FEE SCHEDULE FOR
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 is determined according to the schedule below.

COMPLEX FEE SCHEDULE

Complex Assets Fee Rate
- -----------------------------------------------------------------
First $2.5 billion 0.3100%
Next $7.5 billion 0.3000%
Next $15 billion 0.2985%
Next $25 billion 0.2970%
Next $50 billion 0.2960%
Next $100 billion 0.2950%
Next $100 billion 0.2940%
Next $200 billion 0.2930%
Next $250 billion 0.2920%
Next $500 billion 0.2910%
Thereafter 0.2900%
- -----------------------------------------------------------------

On the first business day of each month, the funds pay a management fee to
the advisor for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for the fund by
the aggregate average daily closing value of a fund's net assets during the
previous month. This number is then multiplied 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).

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 the vote of a majority of outstanding votes (as defined
in the Investment Company Act) and (2) by the vote of a majority of the trustees
of the funds who are not parties to the agreement or interested persons of the
advisor, 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 outstanding votes, on 60 days' written notice to the advisor, and
that it shall be automatically terminated if it is assigned.

The management agreement provides that the advisor shall not be liable to
the funds or their 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 advisor 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.

22 American Century Investments

Certain investments may be appropriate for the funds and also for other
clients advised by the advisor. 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 fund, or in different
amounts and at different times for more than one but less than all clients or
funds. In addition, purchases or sales of the same security may be made for two
or more clients or funds on the same date. Such transactions will be allocated
among clients in a manner believed by the advisor 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 advisor may aggregate purchase and sale orders of the funds with
purchase and sale orders of its other clients when the advisor believes that
such aggregation provides the best execution for the funds. The Board of
Trustees has approved the policy of the advisor 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
advisor 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 advisor
receives no additional compensation or remuneration as a result of such
aggregation.

Prior to August 1, 1997, Benham Management Corporation served as the
investment advisor to the funds. Benham Management Corporation was merged into
the advisor in late 1997.

Unified management fees paid by each fund for the fiscal periods ended May
31, 1999, 1998, and 1997, are indicated in the following tables.

UNIFIED MANAGEMENT FEES(1)

Fund 1999 1998 1997
- --------------------------------------------------------------------
Florida Municipal
Money Market $ 505,045 $491,139(2) 0

Florida
Intermediate-Term
Municipal 177,067 102,790(2) 0

Arizona
Intermediate-Term
Municipal 217,624 156,790(2) 0

Tax-Free Money
Market 1,222,903 0(2) 0

Limited-Term
Tax-Free 203,614 110,921(3) 259,501(4)

Intermediate-Term
Tax-Free 734,571 400,377(3) 489,817(4)

Long-Term
Tax-Free 603,742 330,083(3) 378,372(4)

High-Yield
Municipal 3,588 0 N/A
- --------------------------------------------------------------------

INVESTMENT ADVISORY FEES(5)

Fund 1998(6) 1997
- ---------------------------------------------------------------------
Florida Municipal Money Market $55,569 $0
Florida Intermediate-Term Municipal 7,574 23,601
Arizona Intermediate-Term Municipal 1,556 81,705
Tax-Free Money Market 37,379 341,854
Limited-Term Tax-Free N/A N/A
Intermediate-Term Tax-Free N/A N/A
Long-Term Tax-Free N/A N/A
High-Yield Municipal N/A N/A
- ---------------------------------------------------------------------

(1) Net of reimbursements or waivers.

(2) For the period August 1, 1997, to May 31, 1998. Fees paid during this
period were paid under the Management Agreement with American Century
Investment Management, Inc.

(3) For the period November 1, 1997, to May 31, 1998. Limited-Term Tax-Free,
Intermediate-Term Tax-Free and Long-Term Tax-Free's fiscal year was changed
from October 31 to May 31 resulting in a seven-month annual reporting
period.

(4) For the period November 1, 1996, to October 31, 1997.

(5) Fee amounts are net of amounts reimbursed or recouped under the funds'
previous investment advisory agreement with Benham Management Corporation.

(6) For the period June 1, 1997, to July 31, 1997. Fees paid during this period
were paid under the Investment Advisory Agreement with Benham Management
Corporation.

Statement of Additional Information 23

Other Advisory Relationships

In addition to managing the funds, the advisor also serves as an investment
advisor to 11 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 Quantitative Equity Funds
American Century International Bond Funds
American Century California Tax-Free and Municipal Funds

TRANSFER AGENT AND ADMINISTRATOR

American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111, serves as transfer agent and dividend-paying agent for the
funds. It provides physical facilities, computer hardware and software, and
personnel, for the day-to-day administration of the funds and of the advisor.
The advisor pays ACSC for such services.

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 each fund for the
fiscal periods ended May 31, 1998, and 1997, are indicated in the table below.
Fee amounts are net of expense limitations.

ADMINISTRATIVE FEES

Fund 1998(1) 1997
- ---------------------------------------------------------------------------
Florida Municipal Money Market $15,789 $ 0
Florida Intermediate-Term Municipal 3,851 10,678
Arizona Intermediate-Term Municipal 4,889 26,168
Tax-Free Money Market 13,717 84,467
Limited-Term Tax-Free N/A N/A(2)
Intermediate-Term Tax-Free N/A N/A(2)
Long-Term Tax-Free N/A N/A(2)
High-Yield Municipal(3) N/A N/A
- ---------------------------------------------------------------------------

TRANSFER AGENT FEES

Fund 1998(1) 1997
- ---------------------------------------------------------------------------
Florida Municipal Money Market $6,746 $ 0
Florida Intermediate-Term Municipal 1,484 10,178
Arizona Intermediate-Term Municipal 3,255 19,990
Tax-Free Money Market 9,971 61,414
Limited-Term Tax-Free N/A N/A(2)
Intermediate-Term Tax-Free N/A N/A(2)
Long-Term Tax-Free N/A N/A(2)
High-Yield Municipal N/A N/A
- ----------------------------------------------------------------------------

(1) For the period June 1, 1997, to July 31, 1997.

(2) For the period November 1, 1996, to October 31, 1997.

(3) The inception date for High-Yield Municipal is March 31, 1998.

DISTRIBUTOR

The funds' shares are distributed by FDI, a registered broker-dealer. The
distributor is a wholly owned, indirect subsidiary of Boston Institutional
Group, Inc. The distributor's principal business address is 60 State Street,
Suite 1300, Boston, Massachusetts 02109.

The distributor is the principal underwriter of the funds' shares. The
distributor makes a continuous, best-efforts underwriting of the funds' shares.
This means that the distributor has no liability for unsold shares.

OTHER SERVICE PROVIDERS

CUSTODIAN BANKS

Chase Manhattan Bank, 770 Broadway, 10th floor, New York, New York
10003-9598, and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105,
each serves as custodian of the assets of the funds. The custodians take no part
in determining the investment policies of the funds or in deciding which
securities are purchased or sold by the funds. The funds, however, may invest in
certain obligations of the custodians and may purchase or sell certain
securities from or to the custodians.

24 American Century Investments

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP are the independent accountants of the funds. The
address of PricewaterhouseCoopers LLP is 1055 Broadway, 10th floor, Kansas City,
Missouri 64105. As the independent accountants of the funds,
PricewaterhouseCoopers provides services including (1) audit of the annual
financial statements for each fund, (2) assistance and consultation in
connection with SEC filings, and (3) review of the annual federal income tax
return filed for each fund.

BROKERAGE ALLOCATION

Under the management agreement between the funds and the advisor, the
advisor has the responsibility of selecting brokers and dealers to execute
portfolio transactions. In many transactions, the selection of the broker or
dealer is determined by the availability of the desired security and its
offering price. In other transactions, the selection of a broker or dealer is a
function of the selection of market and the negotiation of price, as well as the
broker's general execution and operational and financial capabilities in the
type of transaction involved. The advisor will seek to obtain prompt execution
of orders at the most favorable prices or yields. The advisor may choose to
purchase and sell portfolio securities to and from dealers who provide
statistical and other information and services, including research, to the funds
and to the advisor. Such information or services will be in addition to, and not
in lieu of, the services required to be performed by the advisor, and the
expenses of the advisor will not necessarily be reduced as a result of the
receipt of such supplemental information.

INFORMATION ABOUT FUND SHARES

Each of the funds named on the front of this Statement of Additional
Information is a series of shares issued by the Trust, and shares of each fund
have equal voting rights.

Each fund votes separately on matters affecting that fund exclusively.
Voting rights are not cumulative, so that investors holding more than 50% of the
Trust's (i.e., all funds') outstanding shares may be able to elect a Board of
Trustees. The Trust undertakes dollar-based voting, meaning that the number of
votes a shareholder is entitled to is based upon the dollar amount of the
shareholder's investment. The election of trustees is determined by the votes
received from all Trust shareholders without regard to whether a majority of
shares of any one fund voted in favor of a particular nominee or all nominees as
a group.

Each shareholder has rights to dividends and distributions declared by the
fund he or she owns 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 fund have equal voting rights, although each fund votes
separately on matters affecting that fund 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 is unable to meet its obligations.

BUYING AND SELLING FUND SHARES

Information about buying, selling and exchanging fund shares is contained in
Your Guide to American Century Services. The guide is available to investors
without charge and may be obtained by calling us.

VALUATION OF A FUND'S 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 4 p.m.
Eastern time each day the Exchange is open for business. The Exchange typically
observes the following holidays: New Year's Day, Martin Luther King Jr. Day,

Statement of Additional Information 25

Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Although the funds expect the same holidays
to be observed in the future, the Exchange may modify its holiday schedule at
any time.

Each fund's NAV 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 funds'
yields. 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 money market funds operate 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 Trustees has adopted procedures designed
to stabilize, to the extent reasonably possible, a money market fund's price per
share as computed for the purposes of sales and redemptions at $1.00. While the
day-to-day operation of the money market funds has been delegated to the fund
managers, 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 unrated
securities, of comparable quality. The procedures require review of the money
market funds' portfolio holdings at such intervals as are reasonable in light of
current market conditions to determine whether the money market funds' net asset
values calculated by using available market quotations deviate from the
per-share value based on amortized cost. The procedures also prescribe the
action to be taken if such deviation should occur.

The Board of Trustees monitors the levels of illiquid securities, however if
the levels are exceeded, they will take action to rectify these levels.

Actions the Board of Trustees may consider under these circumstances include
(i) selling portfolio securities prior to maturity, (ii) withholding dividends
or distributions from capital, (iii) authorizing a one-time dividend adjustment,
(iv) discounting share purchases and initiating redemptions in kind, or (v)
valuing portfolio securities at market price for purposes of calculating NAV.

NON-MONEY MARKET FUNDS

Securities held by the non-money market funds normally are priced by an
independent pricing service, provided that such prices are believed by the
advisor 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
are generally determined without regard to bid or last sale prices. In valuing
securities, the pricing services generally 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 advisor under the general
supervision of the Board of Trustees. There are a number of pricing services
available, and the advisor, 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.

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.

Debt securities maturing within 60 days of the valuation date may be valued
at cost, plus or minus any

26 American Century Investments

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 value using methods approved by the Board of Trustees.

TAXES

FEDERAL INCOME TAX

Each fund intends to qualify annually as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).
By so qualifying, a fund will be exempt from federal and state income taxes to
the extent that it distributes substantially all of its net investment income
and net realized capital gains (if any) to shareholders. If a fund fails to
qualify as a regulated investment company, it will be liable for taxes,
significantly reducing its distributions to shareholders and eliminating
shareholders' ability to treat distributions of the funds in the manner they
were realized by the funds.

Certain of the bonds purchased by the funds may be treated as bonds that
were originally issued at a discount. Original issue discount represents
interest for federal income tax purposes and can generally be defined as the
difference between the price at which a security was issued and its stated
redemption price at maturity. Original issue discount, although no cash is
actually received by a fund until the maturity of the bond, is treated for
federal income tax purposes as income earned by a fund over the term of the
bond, and therefore is subject to the distribution requirements of the Code. The
annual amount of income earned on such a bond by a fund generally is determined
on the basis of a constant yield to maturity that takes into account the
semiannual compounding of accrued interest. Original issue discount on an
obligation with interest exempt from federal income tax will constitute
tax-exempt interest income to the fund.

In addition, some of the bonds may be purchased by a fund at a discount that
exceeds the original issue discount on such bonds, if any. This additional
discount represents market discount for federal income tax purposes. The gain
realized on the disposition of any bond having market discount generally will be
treated as taxable ordinary income to the extent it does not exceed the accrued
market discount on such bond (unless a fund elects to include market discount in
income in tax years to which it is attributable). Generally, market discount
accrues on a daily basis for each day the bond is held by a fund on a straight
line basis over the time remaining to the bond's maturity. In the case of any
debt security having a fixed maturity date of not more than one year from date
of issue, the gain realized on disposition generally will be treated as
short-term capital gain. In general, gain realized on disposition of a security
held less than one year is treated as short-term capital gain.

Under the Code, any distribution of a fund's net realized long-term capital
gains designated by the fund as a capital gain dividend is taxable to
shareholders as long-term capital gains, regardless of the length of time shares
are held. If a capital gain dividend is paid with respect to any shares of a
fund sold at a loss after being held for six months or less, the loss will be
treated as a long-term capital loss for tax purposes.

ALTERNATIVE MINIMUM TAX

While the interest on bonds issued to finance essential state and local
government operations is generally exempt from regular federal income tax,
interest on certain "private activity" bonds issued after August 7, 1986, while
exempt from regular federal income tax, constitutes a tax-preference item for
taxpayers in determining alternative minimum tax liability under the Code and
income tax provisions of several states.

The funds may each invest in private activity bonds. The interest on private
activity bonds could subject a shareholder to, or increase liability under, the
federal alternative minimum tax, depending on the shareholder's tax situation.

All distributions derived from interest exempt from regular federal income
tax may subject corporate shareholders to, or increase their liability under,
the alternative minimum tax because these distributions are included in the
corporation's "adjusted current earnings."

The Trust will inform fund shareholders annually of the amount of
distributions derived from interest payments on private activity bonds.

Statement of Additional Information 27

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The funds may quote performance in various ways. Historical performance
information will be used in advertising and sales literature.

For the money market funds, seven-day current 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 annualized by multiplying by 365/7 with
the resulting yield figure carried to at least the nearest hundredth of one
percent.

Calculations of seven-day 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

For the non-money market funds, 30-day SEC yield quotations are based on the
investment income per share earned during a particular 30-day period, less
expenses accrued during the period (net investment income), and are computed by
dividing the fund's net investment income 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 may also quote tax-equivalent yields. Tax-equivalent yields for
Tax-Free Money Market, Limited-Term Tax-Free, Intermediate-Term Tax-Free,
Long-Term Tax-Free and High-Yield Municipal are calculated using the following
equation:

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

Arizona Intermediate-Term Municipal's tax-equivalent yield is based on the
current double tax-exempt yield and your combined federal and state marginal tax
rate. Assuming all the funds' 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 the fund
using the equation below.

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

Florida Municipal Money Market and Florida Intermediate-Term Municipal's
tax-equivalent yield is based on each fund's 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 Intangibles Tax Rate
100% - Federal Tax Rate
= Your Tax-Equivalent Yield

Total returns quoted in advertising and sales literature reflect all aspects
of a fund's return, including the effect of reinvesting dividends and capital
gain 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 during 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 return of 7.18%, which is
the steady annual rate that would equal 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 the funds' 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.

28 American Century Investments

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, including periods other than one, five and 10
years. Average annual and cumulative total returns may be quoted as percentages
or as dollar amounts 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.

MONEY MARKET FUND TAX-EQUIVALENT YIELDS (seven-day period ended May 31, 1999)

Florida Municipal Money Market 2.92% 4.06% 4.23% 4.56% 4.83%
Tax-Free Money Market 3.03% 4.21% 4.39% 4.73% 5.02%
- -----------------------------------------------------------------------------------------------------------

Tax-Equivalent Tax-Equivalent Tax-Equivalent Tax-Equivalent
Yield Yield Yield Yield
7-Day 28% Tax 31% Tax 36% Tax 39.6% Tax
Fund Effective Yield Bracket Bracket Bracket Bracket
- -----------------------------------------------------------------------------------------------------------
Florida Municipal Money Market 2.96% 4.11% 4.29% 4.63% 4.90%
Tax-Free Money Market 3.08% 4.28% 4.46% 4.81% 5.10%
- -----------------------------------------------------------------------------------------------------------

NON-MONEY MARKET FUND TAX-EQUIVALENT YIELDS (30-day period ended May 31, 1999)

Tax-Equivalent Tax-Equivalent Tax-Equivalent Tax-Equivalent
Yield Yield Yield Yield
30-Day 28% Tax 31% Tax 36% Tax 39.6% Tax
Fund SEC Yield Bracket Bracket Bracket Bracket
- ------------------------------------------------------------------------------------------------------------
Florida Intermediate-Term Municipal 3.95% 5.49% 5.72% 6.17% 6.54%
Arizona Intermediate-Term Municipal 3.87% 5.38%(1) 5.61%(1) 6.05%(1) 6.41%(1)
Limited-Term Tax-Free 3.42% 4.75% 4.96% 5.34% 5.66%
Intermediate-Term Tax-Free 3.91% 5.43% 5.67% 6.11% 6.47%
Long-Term Tax-Free 4.37% 6.07% 6.33% 6.83% 7.24%
High-Yield Municipal 5.31% 7.38% 7.70% 8.30% 8.79%
- ------------------------------------------------------------------------------------------------------------

(1) Tax-equivalent yields based on federal and Arizona income tax rates are:
31.02% Tax Bracket, 5.61%; 33.90% Tax Bracket, 5.85%; 34.59% Tax Bracket,
5.92%; and 39.33% Tax Bracket, 6.38%.

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED MAY 31, 1999

Fund 1 year 5 years 10 years Life of Fund Inception Date
- ------------------------------------------------------------------------------------------------
Florida Municipal Money Market 2.92% 3.47% N/A 3.45% 04/11/94
Florida Intermediate-Term Municipal 4.71% 6.23% N/A 6.42% 04/11/94
Arizona Intermediate-Term Municipal 4.51% 5.92% N/A 6.17% 04/11/94
Tax-Free Money Market 3.10% 3.18% 3.42% 3.93% 07/31/84
Limited-Term Tax-Free 4.15% 4.75% N/A 4.44% 03/01/93
Intermediate-Term Tax-Free 4.07% 5.82% 6.35% 5.87% 03/02/87
Long-Term Tax-Free 3.44% 6.79% 7.14% 6.95% 03/02/87
High-Yield Municipal 6.18% N/A N/A 6.90% 03/31/98
- ------------------------------------------------------------------------------------------------
</TABLE>

Statement of Additional Information 29

PERFORMANCE COMPARISONS

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indices of market
performance. This may include comparisons with funds that, unlike the American
Century funds, are sold with a sales charge or deferred sales charge. 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 held by foreigners, the U.S. money supply,
net free reserves, and 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, 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 or to provide
general information about the funds.

PERMISSIBLE ADVERTISING INFORMATION

From time to time, the funds may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders: (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost averaging); (2) discussions of general economic
trends; (3) presentations of statistical data to supplement such discussions;
(4) descriptions of past or anticipated portfolio holdings for one or more of
the funds; (5) descriptions of investment strategies for one or more of the
funds; (6) descriptions or comparisons of various savings and investment
products (including, but not limited to, qualified retirement plans and
individual stocks and bonds), which may or may not include the funds; (7)
comparisons of investment products (including the funds) with relevant market or
industry indices or other appropriate benchmarks; (8) discussions of fund
rankings or ratings by recognized rating organizations; and (9) testimonials
describing the experience of persons that have invested in one or more of the
funds. The funds also may include calculations, such as hypothetical compounding
examples, which describe hypothetical investment results. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of any of the funds.

FINANCIAL STATEMENTS

The financial statements of the funds are included in the annual reports to
shareholders for the fiscal year ended May 31, 1999. The annual reports are
incorporated herein by reference. You may receive copies of the reports without
charge upon request to American Century at the address and telephone number
shown on the back cover of this Statement of Additional Information.

EXPLANATION OF FIXED INCOME SECURITIES RATINGS

As described in the Prospectus, the funds may invest in fixed income
securities. Those investments, however, are subject to certain credit quality
restrictions, as noted in the Prospectus. The following is a summary of the
rating categories referenced in the prospectus disclosure.

30 American Century Investments

<TABLE>
<CAPTION>
BOND RATINGS
S&P Moody's Description
- ---------------------------------------------------------------------------
<S> <C> <C>
AAA Aaa These are the highest ratings assigned by S&P and
Moody's to a debt obligation and indicates an
extremely strong capacity to pay interest and repay
principal.
- ---------------------------------------------------------------------------
AA Aa Debt rated in this category is considered to have a
very strong capacity to pay interest and repay
principal and differs from AAA/Aaa issues only in a
small degree.
- ---------------------------------------------------------------------------
A 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 Baa Debt rated BBB/Baa 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.
- ---------------------------------------------------------------------------
BB Ba Debt rated BB/Ba 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 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 is also used for debt
subordinated to senior debt that is assigned an actual
or implied BB/Ba or BB-/Ba3 rating.
- ---------------------------------------------------------------------------
CCC Caa Debt rated CCC/Caa 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/Caa rating category is also used for debt
subordinated to senior debt that is assigned an
actual or implied B or B-/B3 rating.
- ---------------------------------------------------------------------------
CC Ca The rating CC/Ca typically is applied to debt
subordinated to senior debt that is assigned an actual
or implied CCC/Caa rating.
- ---------------------------------------------------------------------------
C C The rating C typically is applied to debt subordinate
to senior debt, which is assigned an actual or implied
CCC-/Caa3 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 rating CI is reserved for income bonds on which
no interest is being paid.
- ---------------------------------------------------------------------------
D D Debt rated D is in payment default. The D rating
category is used when interest payments or principal
payments are not made on the date due even if the
applicable grace period has not expired, unless S&P
believes that such payments will be made during
such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt
service payments are jeopardized.
- ---------------------------------------------------------------------------
</TABLE>

Statement of Additional Information 31

To provide more detailed indications of credit quality, the Standard &
Poor's ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within these major rating categories. Similarly,
Moody's adds numerical modifiers (1,2,3) to designate relative standing within
its major bond rating categories. Fitch Investors Service, Inc. also rates bonds
and uses a ratings system that is substantially similar to that used by Standard
& Poor's.

COMMERCIAL PAPER RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
A-1 Prime-1 (P-1) This indicates that the degree of safety regarding
timely payment is strong. Standard & Poor's rates those
issues determined to possess extremely strong safety
characteristics as A-1+.
- --------------------------------------------------------------------------------
A-2 Prime-2 (P-2) Capacity for timely payment on commercial
paper is satisfactory, but the relative degree of
safety is not as high as for issues designated A-1.
Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization
characteristics, while still appropriated, may be more
affected by external conditions. Ample alternate
liquidity is maintained.
- --------------------------------------------------------------------------------
A-3 Prime-3(P-3) Satisfactory capacity for timely
repayment. Issues that carry this rating are somewhat
more vulnerable to the adverse changes in circumstances
than obligations carrying the higher designations.
- --------------------------------------------------------------------------------

NOTE RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying
strong protection from established cash flows of funds
for their servicing or from established and broad-based
access to the market for refinancing, or both.
- --------------------------------------------------------------------------------
SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins
of protection ample, although not so large as in the
preceding group.
- --------------------------------------------------------------------------------
SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all
security elements accounted for, but lacking the
undeniable strength of the preceding grades. Market
access for refinancing, in particular, is likely to be
less well established.
- --------------------------------------------------------------------------------
SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying specific risk
but having protection and not distinctly or
predominantly speculative.
- --------------------------------------------------------------------------------

32 American Century Investments

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

These contain more information about the funds' investments and the market
conditions and investment strategies that significantly affected the funds'
performance during the most recent fiscal period. The annual and semiannual
reports are incorporated by reference into this Statement of Additional
Information (SAI). This means that it is legally part of this SAI.

You can receive a free copy of the annual and semiannual reports, and ask any
questions about the funds, by contacting us at the address or one of the
telephone numbers listed below.

If you own or are considering purchasing fund shares through

* an employer-sponsored retirement plan
* a bank
* a broker-dealer
* an insurance company
* another financial intermediary

you can receive the annual and semiannual reports directly from them.

You can also get information about the funds from the Securities and Exchange
Commission (SEC).

* In person SEC Public
Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for
location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference
Section
Washington, D.C.
20549-6009
(The SEC will charge a fee for copying the documents.)

Investment Company Act File No. 811-4025

- ----------------------------------------------------------------------------

[american century logo(reg. sm)
American
Century

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

INVESTOR RELATIONS
1-800-345-2021 or 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

WWW.AMERICANCENTURY.COM

FAX
816-340-7962

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

BUSINESS; NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS 1-800-345-353

SH-PRS-17511 9910
<PAGE>
[front cover]

AMERICAN CENTURY

Statement of Additional Information

Florida Municipal Money Market Fund
Florida Intermediate-Term Municipal Fund
New York Municipal Money Market Fund
Arizona Intermediate-Term Municipal Fund
Tax-Free Money Market Fund
Limited-Term Tax-Free Fund
Intermediate-Term Tax-Free Fund
Long-Term Tax-Free Fund
High-Yield Municipal Fund

[american century logo(reg. sm)
American
Century

OCTOBER 1, 1999

American Century
Municipal Trust

THIS STATEMENT OF ADDITIONAL INFORMATION ADDS TO THE DISCUSSION IN THE FUNDS'
PROSPECTUSES, DATED OCTOBER 1, 1999, BUT IS NOT A PROSPECTUS. THE STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FUNDS' CURRENTP
ROSPECTUSES. IF YOU WOULD LIKE A COPY OF A PROSPECTUS, PLEASE CONTACT US AT THE
ADDRESS OR TELEPHONE NUMBERS LISTED ON THE BACK COVER OR
VISIT AMERICAN CENTURY'S WEB SITE AT
WWW.AMERICANCENTURY.COM.

THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES BY REFERENCE CERTAIN
INFORMATION THAT APPEARS IN THE FUNDS' ANNUAL AND SEMIANNUAL REPORTS, WHICH ARED
ELIVERED TO ALL SHAREHOLDERS. YOU MAY OBTAIN A FREE COPY OF THE FUNDS' ANNUAL
OR SEMIANNUAL REPORT BY CALLING 1-800-345-2021.

Distributed by Funds Distributor, Inc.

STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 1, 1999

TABLE OF CONTENTS

The Funds' History ........................................................ 2
Fund Investment Guidelines ................................................ 2
Florida Municipal Money Market Fund and
Florida Intermediate-Term Municipal Fund ........................... 2
New York Municipal Money Market Fund .................................. 3
Arizona Intermediate-Term Municipal Fund .............................. 3
Tax-Free Money Market Fund,
Limited-Term Tax-Free Fund,
Intermediate-Term Tax-Free Fund
and Long-Term Tax Free Fund ........................................ 4
High-Yield Municipal Fund ............................................. 4
Credit Quality and Maturity Guidelines ................................ 4
Detailed Information About the Funds ...................................... 5
Investment Strategies and Risks ....................................... 5
Investment Policies ................................................... 16
Temporary Defensive Measures .......................................... 17
Portfolio Turnover .................................................... 17
Management ................................................................ 18
The Board of Trustees ................................................. 18
Officers .............................................................. 20
The Funds' Principal Shareholders ......................................... 22
Service Providers ......................................................... 22
Investment Advisor .................................................... 22
Transfer Agent and Administrator ...................................... 25
Distributor ........................................................... 25
Other Service Providers ................................................... 25
Custodian Banks ....................................................... 25
Independent Accountants ............................................... 26
Brokerage Allocation ...................................................... 26
Information About Fund Shares ............................................. 26
Buying and Selling Fund Shares ........................................ 26
Valuation of a Fund's Securities ...................................... 26
Money Market Funds ................................................. 27
Non-Money Market Funds ............................................. 27
Taxes ..................................................................... 28
Federal Income Tax .................................................... 28
How Fund Performance
Information is Calculated ............................................... 29
Financial Statements ...................................................... 31
Explanation of Fixed-Income
Securities Ratings ...................................................... 31

Statement of Additional Information 1

THE FUNDS' HISTORY

Ticker Inception
Fund Symbol Date
- --------------------------------------------------------------------------------
Florida Municipal Money Market BEFXX 04/11/94
Florida Intermediate-Term Municipal ACBFX 04/11/94
New York Municipal Money Market N/A N/A
Arizona Intermediate-Term Municipal BEAMX 04/11/94
Tax-Free Money Market BNTXX 07/31/84
Limited-Term Tax-Free TWTSX 03/01/93
Intermediate-Term Tax-Free TWT1X 03/02/87
Long-Term Tax-Free TWTLX 03/02/87
High-Yield Municipal ABHY2 03/31/98
- --------------------------------------------------------------------------------

FUND INVESTMENT GUIDELINES

Each fund (except High-Yield Municipal, New York Municipal Money Market,
Florida Municipal Money Market, Florida Intermediate-Term Municipal and Arizona
Intermediate-Term Municipal) is a diversified open-end investment company as
defined in the Investment Company Act of 1940 (the Investment Company Act).
Diversified means that, with respect to 75% of its total assets, each fund will
not invest more than 5% of its total assets in the securities of a single
issuer.

In general, within the restrictions outlined here and in the funds'
Prospectuses, the fund managers have broad powers to decide how to invest fund
assets, including the power to hold them uninvested.

FLORIDA MUNICIPAL MONEY MARKET FUND
FLORIDA INTERMEDIATE-TERM MUNICIPAL FUND

2 American Century Investments

Intangibles Tax. Because of this emphasis on tax-exempt income, the funds
by themselves do not constitute a balanced investment plan.

NEW YORK MUNICIPAL MONEY MARKET FUND

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.

ARIZONA INTERMEDIATE-TERM MUNICIPAL FUND

Statement of Additional Information 3

income tax. The fund is not limited, however, in its investments in securities
that are subject to the AMT.

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

The 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
AMT.

HIGH-YIELD MUNICIPAL FUND

CREDIT QUALITY AND MATURITY GUIDELINES

THE MONEY MARKET FUNDS

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.

In selecting investments for the money market funds, the advisor adheres to
regulatory guidelines concerning the quality and maturity of money market

4 American Century Investments

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
portfolio maturity of 90 days or less; and (3) restricts its investments to
high-quality obligations determined by the advisor to present minimal credit
risks, pursuant to guidelines established by the Board of Trustees.

The fund managers intend to buy only obligations that are designated as
first-tier securities as defined by the SEC; that is, securities with the
highest rating.

The acquisition of securities that are unrated or rated by only one rating
agency must be approved or ratified by the Board of Trustees.

NON-MONEY MARKET FUNDS (EXCEPT HIGH-YIELD MUNICIPAL)

DETAILED INFORMATION ABOUT THE FUNDS

INVESTMENT STRATEGIES AND RISKS

CONCENTRATION IN TYPES OF MUNICIPAL ACTIVITIES

ABOUT THE RISKS AFFECTING ARIZONA MUNICIPAL SECURITIES

Statement of Additional Information 5

not constitute a complete description of the risks associated with investing in
securities of these issuers. While the advisor has not independently verified
the information contained in the official statements, it has no reason to
believe the information is inaccurate.

ABOUT THE RISKS AFFECTING FLORIDA MUNICIPAL SECURITIES

6 American Century Investments

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 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.

ABOUT THE RISKS AFFECTING NEW YORK MUNICIPAL SECURITIES

As noted in the Prospectus, New York Municipal Money Market is susceptible
to 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 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 risks 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

Statement of Additional Information 7

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.

ABOUT THE RISKS AFFECTING PUERTO RICO MUNICIPAL SECURITIES

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-

8 American Century Investments

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 Internal Revenue 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.

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.

Bond Anticipation Notes (BANs) are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds provide
the money for repayment of the notes.

MUNICIPAL BONDS

Statement of Additional Information 9

VARIABLE- AND FLOATING-RATE OBLIGATIONS

OBLIGATIONS WITH TERM PUTS ATTACHED

TENDER OPTION BONDS

The advisor also takes steps to minimize the risk that the fund may realize
taxable income as a result of holding TOBs. These steps may include
consideration

10 American Century Investments

of (1) legal opinions relating to the tax-exempt status of the underlying
municipal bonds, (2) legal opinions relating to the tax ownership of the
underlying bonds, and (3) other elements of the structure that could result in
taxable income or other adverse tax consequences. After purchase, the advisor
monitors factors related to the tax-exempt status of the fund's TOB holdings in
order to minimize the risk of generating taxable income.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

MUNICIPAL LEASE OBLIGATIONS

INVERSE FLOATERS

Statement of Additional Information 11

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 interest rate (as well as by any fees associated with
administering the inverse floater program).

* Inverse floater holders receive all of the interest that remains on the
underlying bonds after floater interest and auction fees are paid.

LOWER-QUALITY BONDS

While the market values of higher-quality bonds tend to correspond to market
interest rate changes, the market values of lower-quality bonds tend to reflect
the financial condition of their issuers.

The market for lower-quality bonds tends to be concentrated among a smaller
number of dealers

12 American Century Investments

The advisor continually monitors securities to determine their relative
liquidity.

A fund may incur expenses in excess of its ordinary operating expenses if it
becomes necessary to seek recovery on a defaulted bond, particularly a
lower-quality bond.

REPURCHASE AGREEMENTS

No fund will invest more than 15% of its assets (10% for the money market
funds) in repurchase agreements maturing in more than seven days.

SHORT-TERM SECURITIES

Except as otherwise required for temporary defensive purposes, the advisor
does not expect the non-money market funds to invest more than 35% of total
assets in short-term securities.

FUTURES AND OPTIONS

Statement of Additional Information 13

Risks Related to Futures and Options Transactions

14 American Century Investments

Options On Futures

Restrictions on the Use of Futures Contracts and Options

Each non-money market fund may enter into futures contracts, options or
options on futures contracts.

RESTRICTED AND ILLIQUID SECURITIES

Statement of Additional Information 15

the advisor. The Board retains the responsibility to monitor the implementation
of the guidelines and procedures it has adopted.

INVESTMENT POLICIES

FUNDAMENTAL INVESTMENT POLICIES

Subject Policy
- --------------------------------------------------------------------------------
Senior Securities A fund may not issue senior securities, except as
permitted under the Investment Company Act.
- --------------------------------------------------------------------------------
Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 (1)/(3)% of the fund's total assets.
- --------------------------------------------------------------------------------
Lending A fund may not lend any security or make any other loan if,
as a result, more than 33(1)/(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.
- --------------------------------------------------------------------------------
Real Estate A fund may 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.
- --------------------------------------------------------------------------------
Concentration A fund may 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).
- --------------------------------------------------------------------------------
Underwriting A fund may 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.
- --------------------------------------------------------------------------------
Commodities A fund may 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 purchasing or selling options and futures
contracts or from investing in securities or other
instruments backed by physical commodities.
- --------------------------------------------------------------------------------
Control A fund may not invest for purposes of exercising control over
management.
- --------------------------------------------------------------------------------

16 American Century Investments

NONFUNDAMENTAL INVESTMENT POLICIES

In addition, the funds are subject to the following additional investment
restrictions that are not fundamental and may be changed by the Board of
Trustees.

Subject Policy
- --------------------------------------------------------------------------------
Diversification A fund may not purchase additional investment
(Tax-Free Money Market, securities at any time during which outstanding
Limited-Term, borrowings exceed 5% of the total assets of the
Intermediate-Term and fund.
Long-Term Tax-Free)
- --------------------------------------------------------------------------------
Diversification To meet federal tax requirements for qualification
(New York Municipal as a regulated investment company, each fund must
Money Market, Florida limit its investments so that at the close of each
Municipal Money Market, quarter of its taxable year (1) no more than 25% of
Florida Intermediate-Term its total assets are invested in the securities of
Municipal, Arizona a single issuer (other than the U.S government or
Intermediate-Term Municipal a regulated investment company), and (2) with
and High-Yield Municipal) respect to at least 50% of its total assets, no
more than 5% of its total assets are invested in
the securities of a single issuer.
- --------------------------------------------------------------------------------
Futures and options The money market funds may not purchase or sell
[money market funds only] 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.
- --------------------------------------------------------------------------------
Liquidity A fund may 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.
- --------------------------------------------------------------------------------
Short Sales A fund may 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.
- --------------------------------------------------------------------------------
Margin A fund may not purchase securities on margin,
except to 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.
- --------------------------------------------------------------------------------

TEMPORARY DEFENSIVE MEASURES

PORTFOLIO TURNOVER

Statement of Additional Information 17

MANAGEMENT

THE BOARD OF TRUSTEES

The Board of Trustees oversees the management of the funds and meets at
least quarterly to review reports about fund operations. Although the Board of
Trustees does not manage the funds, it has hired the advisor to do so.
Two-thirds of the trustees are independent of the funds' advisor, that is, they
are not employed by and have no financial interest in the advisor.

<TABLE>
Name (Age)
Address Position(s) Held With Fund Principal Occupation(s) During Past Five
Years
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>

Albert A. Eisenstat (69) Trustee Independent Director, Commercial Metals Co. (1982 to present)
1665 Charleston Road Independent Director, Sungard Data Systems (1991 to present)
Mountain View, CA 94043 General Partner, Discovery Ventures (venture capital firm,
1996 to 1998)
Independent Director, Business Objects S/A (software &
programming, 1994 to present)
- --------------------------------------------------------------------------------------------------------------------------
Ronald J. Gilson (53) Trustee Charles J. Meyers Professor of Law and Business, Stanford
1665 Charleston Road Law School (1979 to present)
Mountain View, CA 94043 Mark and Eva Stern Professor of Law and Business, Columbia
University School of Law (1992 to present)
Counsel, Marron, Reid & Sheehy (a San Francisco law firm,
1984 to present)
- --------------------------------------------------------------------------------------------------------------------------
William M. Lyons* (43) Trustee President, Chief Operating Officer and Assistant Secretary, ACC
4500 Main Street Executive Vice President, Chief Operating Officer and Secretary,
Kansas City, MO 64111 ACSC and ACIS
- --------------------------------------------------------------------------------------------------------------------------
Myron S. Scholes (58) Trustee Limited Partner, Long-Term Capital Management (February
1665 Charleston Road 1999 to present)
Mountain View, CA 94043 Principal, Long-Term Capital Management (investment advisor,
1993 to January 1999)
Frank E. Buck Professor of Finance, Stanford Graduate School
of Business (1981 to present)
Director, Dimensional Fund Advisors (investment advisor, 1982
to present)
Director, Smith Breeden Family of Funds (1992 to present)
- --------------------------------------------------------------------------------------------------------------------------
Kenneth E. Scott (70) Trustee Ralph M. Parsons Professor of Law and Business, Stanford
1665 Charleston Road Law School (1972 to present)
Mountain View, CA 94043 Director, RCM Capital Funds, Inc. (1994 to present)
- --------------------------------------------------------------------------------------------------------------------------

18 American Century Investments

Name (Age)
Address Position(s) Held With Fund Principal Occupation(s) During Past Five
Years
- --------------------------------------------------------------------------------------------------------------------------
Isaac Stein (52) Trustee Director, Raychem Corporation (electrical equipment, 1993
1665 Charleston Road to present)
Mountain View, CA 94043 President, Waverley Associates, Inc. (private investment firm,
1983 to present)
Director, ALZA Corporation (pharmaceuticals, 1987 to present)
Trustee, Stanford University (1994 to present)
Chairman, Stanford Health Services (1994 to present)
- --------------------------------------------------------------------------------------------------------------------------
James E. Stowers III* (40) Trustee, Chief Executive Officer and Director, ACC
4500 Main Street Chairman of the Board President, Chief Executive Officer and Director, ACSC and ACIS
Kansas City, MO 64111 Son of James E. Stowers, Jr. (founder)
- --------------------------------------------------------------------------------------------------------------------------
Jeanne D. Wohlers (54) Trustee Director, Indus International (software solutions, January 1999
1665 Charleston Road to present)
Mountain View, CA 94043 Director and Partner, Windy Hill Productions, LP (educational
software, 1994 to 1998)
Director, Quintus Corporation (automation solutions, 1995 to
present)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

COMMITTEES

Committee Members Function of Committee
- --------------------------------------------------------------------------------
Audit Jeanne D. Wohlers The Audit Committee selects and
Albert A. Eisenstat oversees the activities of the
Kenneth E. Scott Trust's independent auditor. The
committee receives reports from the
advisor's Internal Audit Department,
which is accountable solely to the
committee. The committee also
receives reporting about compliance
matters affecting the Trust.
- --------------------------------------------------------------------------------
Nominating Kenneth E. Scott The Nominating Committee primarily
Myron S. Scholes considers and recommends individuals
Albert A. Eisenstat for nomination as trustees. The names
Ronald J. Gilson of potential trustee candidates are
Isaac Stein drawn from a number of sources,
Jeanne D. Wohlers including recommendations from
members of the Board, management and
shareholders. This committee also
reviews and makes recommendations to
the Board with respect to the
composition of Board committees and
other Board-related matters,
including its organization, size,
composition, responsibilities,
functions and compensation.
- --------------------------------------------------------------------------------
Portfolio Myron S. Scholes The Portfolio Committee reviews
Ronald J. Gilson quarterly the investment activities
Isaac Stein and strategies used to manage fund
assets. The committee regularly
receives reports from portfolio
managers, credit analysts and other
investment personnel concerning the
funds' investments.
- --------------------------------------------------------------------------------
Quality of Service Isaac Stein The Quality of Service Committee
William Lyons reviews the level and quality of
Ronald J. Gilson transfer agent and administrative
Myron S. Scholes services provided to the funds and
their shareholders. It receives and
reviews reports comparing those
services to fund competitors and
seeks to improve such services where
feasible and appropriate.
- --------------------------------------------------------------------------------

Statement of Additional Information 19

COMPENSATION OF TRUSTEES

Aggregate Trustee Compensation for Fiscal Year Ended May 31, 1999
- --------------------------------------------------------------------------------
Total Total Compensation
Compensation from the
from the American Century
Name of Trustee Funds(1) Family of Funds(2)
- --------------------------------------------------------------------------------
Albert A. Eisenstat $13,571 $57,750
Ronald J. Gilson 13,917 66,500
Myron S. Scholes 13,424 55,250
Kenneth E. Scott 13,905 66,500
Isaac Stein 13,695 61,750
Jeanne D. Wohlers 13,832 64,750
- --------------------------------------------------------------------------------

(1) Includes compensation paid to the trustees during the fiscal year ended May
31, 1999, and also includes amounts deferred at the election of the trustees
under the American Century Mutual Funds Deferred Compensation Plan for
Non-Interested Directors and Trustees. The total amount of deferred
compensation included in the preceding table is as follows: Mr. Eisenstat,
$13,571; Mr. Gilson, $13,917; Mr. Scholes, $13,424; and Mr. Scott, $6,952.

(2) Includes compensation paid by the seven investment company members of the
American Century family of funds served by this Board.

No deferred fees were paid to any trustee under the plan during the fiscal
year ended May 31, 1999.

OFFICERS

20 American Century Investments

<TABLE>
Name (Age)
Address Positions Held With Fund Principal Occupation(s) During Past Five
Years
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>

George A. Rio (44) President Executive Vice President and Director of Client Services, FDI
60 State St. (March 1998 to present)
Boston, MA 02109 Senior Vice President and Senior Key Account Manager, Putnam
Mutual Funds (June 1995 to March 1998)
Director Business Development, First Data Corporation (May
1994 to June 1995)
- --------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (34) Vice President Vice President and Associate General Counsel, FDI (July 1996
60 State St. to present)
Boston, MA 02109 Assistant Counsel, Forum Financial Group (April 1994 to
July
1996)
- --------------------------------------------------------------------------------------------------------------------------
Mary A. Nelson (35) Vice President Vice President and Manager of Treasury Services and
60 State St. Administration, FDI (1994 to present)
Boston, MA 02109 Assistant Vice President and Client Manager, The Boston
Company, Inc. (1989 to 1994)
- --------------------------------------------------------------------------------------------------------------------------
Maryanne Roepke, CPA (43) Vice President and Senior Vice President and Treasurer, ACSC
4500 Main St. Treasurer
Kansas City, MO 64111
- --------------------------------------------------------------------------------------------------------------------------
David C. Tucker (41) Vice President Senior Vice President and General Counsel, ACSC and ACIM
4500 Main St. (June 1998 to present)
Kansas City, MO 64111 General Counsel, ACC (June 1998 to present)
Consultant to mutual fund industry (May 1997 to April 1998)
Vice President and General Counsel, Janus Companies
(1990 to 1997)
- --------------------------------------------------------------------------------------------------------------------------
Douglas A. Paul (52) Secretary and Vice President and Associate General Counsel, ACSC
1665 Charleston Road Vice President
Mountain View, CA 94043
- --------------------------------------------------------------------------------------------------------------------------
C. Jean Wade (35) Controller Controller--Fund Accounting, ACSC
4500 Main St.
Kansas City, MO 64111
- --------------------------------------------------------------------------------------------------------------------------
Jon Zindel (32) Tax Officer Vice President and Director of Taxation, ACSC (1996 to present)
4500 Main St. Vice President, ACIM (1999 to present)
Kansas City, MO 64111 Tax Manager, Price Waterhouse LLP (1989 to 1996)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

Statement of Additional Information 21

THE FUNDS' PRINCIPAL SHAREHOLDERS

As of September 2, 1999, the following companies were the record owners of
more than 5% of a fund's outstanding shares:

Shareholder and Percentage
Fund of Shares Outstanding
- -------------------------------------------------------------------------------
Florida Municipal Margaret A. Benham
Money Market Astatula, FL -- 11.5%
Morgan Guaranty
New York, NY -- 6.6%
- -------------------------------------------------------------------------------
Florida Morgan Guaranty
Intermediate-Term New York, NY -- 34.4%
Municipal Charles Schwab & Company
San Francisco, CA -- 18.2%
American Century Investment
Management, Inc.
Kansas City, MO -- 5.3%
- -------------------------------------------------------------------------------
Arizona Charles Schwab & Company
Intermediate-Term San Francisco, CA -- 27.9%
Municipal
- -------------------------------------------------------------------------------
Intermediate-Term Charles Schwab & Company
Tax-Free San Francisco, CA -- 11.5%
American Century Investment
Management, Inc.
Kansas City, MO -- 11.5%
- -------------------------------------------------------------------------------
Long-Term Charles Schwab & Company
Tax-Free San Francisco, CA -- 6.1%
- -------------------------------------------------------------------------------
High-Yield American Century Investment
Municipal Management, Inc.
Kansas City, MO -- 12.7%
- -------------------------------------------------------------------------------

SERVICE PROVIDERS

ACIM and ACSC are both wholly owned by ACC. James E. Stowers, Jr., Chairman
of ACC, controls ACC by virtue of his ownership of a majority of its voting
stock.

INVESTMENT ADVISOR

A description of the responsibilities of the advisor appears in the
Prospectus under the heading "Management."

The schedules by which the Investment Category Fees are determined are as
follows:

INVESTMENT CATEGORY FEE SCHEDULE FOR TAX-FREE MONEY MARKET, FLORIDA MUNICIPAL
MONEY MARKET AND NEW YORK MUNICIPAL MONEY MARKET

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%
- -------------------------------------------------------------------------------

22 American Century Investments

INVESTMENT CATEGORY FEE SCHEDULE FOR LIMITED-TERM TAX-FREE, INTERMEDIATE-TERM
TAX-FREE, LONG-TERM TAX-FREE, ARIZONA INTERMEDIATE-TERM MUNICIPAL, AND FLORIDA
INTERMEDIATE-TERM MUNICIPAL

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%
- -------------------------------------------------------------------------------

INVESTMENT CATEGORY FEE SCHEDULE FOR 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 is determined according to the schedule below.

COMPLEX FEE SCHEDULE

Complex Assets Fee Rate
- -------------------------------------------------------------------------------
First $2.5 billion 0.3100%
Next $7.5 billion 0.3000%
Next $15 billion 0.2985%
Next $25 billion 0.2970%
Next $50 billion 0.2960%
Next $100 billion 0.2950%
Next $100 billion 0.2940%
Next $200 billion 0.2930%
Next $250 billion 0.2920%
Next $500 billion 0.2910%
Thereafter 0.2900%
- -------------------------------------------------------------------------------

Statement of Additional Information 23

Prior to August 1, 1997, Benham Management Corporation served as the
investment advisor to the funds. Benham Management Corporation was merged into
the advisor in late 1997.

Unified management fees incurred by each fund for the fiscal periods ended
May 31, 1999, 1998, and 1997, are indicated in the following tables.

UNIFIED MANAGEMENT FEES(1)

Fund 1999 1998 1997
- ------------------------------------------------------------------------
Florida Municipal
Money Market $ 505,045 $491,139(2) $ 0

Florida
Intermediate-Term
Municipal 177,067 102,790(2) 0

Arizona
Intermediate-Term
Municipal 217,624 156,790(2) 0

Tax-Free Money
Market 1,222,903 0(2) 0

Limited-Term
Tax-Free 203,614 110,921(3) 259,501(4)

Intermediate-Term
Tax-Free 734,571 400,377(3) 489,817(4)

Long-Term
Tax-Free 603,742 330,083(3) 378,372(4)

High-Yield
Municipal 3,588 0 N/A
- ------------------------------------------------------------------------

INVESTMENT ADVISORY FEES(5)

Fund 1998(6) 1997
- ------------------------------------------------------------------------
Florida Municipal Money Market $55,569 $ 0
Florida Intermediate-Term Municipal 7,574 23,601
Arizona Intermediate-Term Municipal 1,556 81,705
Tax-Free Money Market 37,379 341,854
Limited-Term Tax-Free N/A N/A
Intermediate-Term Tax-Free N/A N/A
Long-Term Tax-Free N/A N/A
High-Yield Municipal N/A N/A
- ------------------------------------------------------------------------

(1) Net of reimbursements or waivers.

(2) For the period August 1, 1997, to May 31, 1998. Fees paid during this period
were paid under the Management Agreement with American Century Investment
Management, Inc.

(4) For the period November 1, 1996, to October 31, 1997.

(5) Fee amounts are net of amounts reimbursed or recouped under the funds'
previous investment advisory agreement with Benham Management Corporation.

(6) For the period June 1, 1997, to July 31, 1997. Fees paid during this period
were paid under the Investment Advisory Agreement with Benham Management
Corporation.

24 American Century Investments

Other Advisory Relationships

In addition to managing the funds, the advisor also serves as an investment
advisor to 11 institutional accounts and to the following registered investment
companies:

TRANSFER AGENT AND ADMINISTRATOR

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 each fund for the
fiscal periods ended May 31, 1998, and 1997, are indicated in the table below.
Fee amounts are net of expense limitations.

ADMINISTRATIVE FEES

Fund 1998(1) 1997
- --------------------------------------------------------------------------------
Florida Municipal Money Market $15,789 $ 0
Florida Intermediate-Term Municipal 3,851 10,678
Arizona Intermediate-Term Municipal 4,889 26,168
Tax-Free Money Market 13,717 84,467
Limited-Term Tax-Free N/A N/A(2)
Intermediate-Term Tax-Free N/A N/A(2)
Long-Term Tax-Free N/A N/A(2)
High-Yield Municipal(3) N/A N/A
- --------------------------------------------------------------------------------

TRANSFER AGENT FEES

Fund 1998(1) 1997
- --------------------------------------------------------------------------------
Florida Municipal Money Market $6,746 $ 0
Florida Intermediate-Term Municipal 1,484 10,178
Arizona Intermediate-Term Municipal 3,255 19,990
Tax-Free Money Market 9,971 61,414
Limited-Term Tax-Free N/A N/A(2)
Intermediate-Term Tax-Free N/A N/A(2)
Long-Term Tax-Free N/A N/A(2)
High-Yield Municipal N/A N/A
- --------------------------------------------------------------------------------

(1) For the period June 1, 1997, to July 31, 1997.

(2) For the period November 1, 1996, to October 31, 1997.

(3) The inception date for High-Yield Municipal is March 31, 1998.

DISTRIBUTOR

OTHER SERVICE PROVIDERS

CUSTODIAN BANKS

Statement of Additional Information 25

INDEPENDENT ACCOUNTANTS

BROKERAGE ALLOCATION

INFORMATION ABOUT FUND SHARES

Each of the funds named on the front of this Statement of Additional
Information is a series of shares issued by the Trust, and shares of each fund
have equal voting rights.

BUYING AND SELLING FUND SHARES

VALUATION OF A FUND'S SECURITIES

26 American Century Investments

MONEY MARKET FUNDS

The Board of Trustees monitors the levels of illiquid securities, however if
the levels are exceeded, they will take action to rectify these levels.

NON-MONEY MARKET FUNDS

Debt securities maturing within 60 days of the valuation date may be valued
at cost, plus or minus any

Statement of Additional Information 27

TAXES

FEDERAL INCOME TAX

ALTERNATIVE MINIMUM TAX

The Trust will inform fund shareholders annually of the amount of
distributions derived from interest payments on private activity bonds.

28 American Century Investments

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The funds may quote performance in various ways. Historical performance
information will be used in advertising and sales literature.

Effective Yield = [(Base-Period Return + 1)(365/7)] - 1

YIELD = 2 [(a - b + 1)(6) - 1]
-------
cd

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

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

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

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

Statement of Additional Information 29

MONEY MARKET FUND TAX-EQUIVALENT YIELDS (seven-day period ended May 31, 1999)

Tax-Equivalent Tax-Equivalent Tax-Equivalent Tax-Equivalent
Yield Yield Yield Yield
7-Day 28% Tax 31% Tax 36% Tax 39.6% Tax
Fund Current Yield Bracket Bracket Bracket Bracket
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida Municipal Money Market 2.92% 4.06% 4.23% 4.56% 4.83%
Tax-Free Money Market 3.03% 4.21% 4.39% 4.73% 5.02%
- -----------------------------------------------------------------------------------------------------------

NON-MONEY MARKET FUND TAX-EQUIVALENT YIELDS (30-day period ended May 31, 1999)

(1) Tax-equivalent yields based on federal and Arizona income tax rates are:
31.02% Tax Bracket, 5.61%; 33.90% Tax Bracket, 5.85%; 34.59% Tax Bracket,
5.92%; and 39.33% Tax Bracket, 6.38%.

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED MAY 31, 1999

30 American Century Investments

PERFORMANCE COMPARISONS

PERMISSIBLE ADVERTISING INFORMATION

FINANCIAL STATEMENTS

EXPLANATION OF FIXED INCOME SECURITIES RATINGS

Statement of Additional Information 31

32 American Century Investments

COMMERCIAL PAPER RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
A-1 Prime-1(P-1) This indicates that the degree of safety regarding
timely payment is strong. Standard & Poor's rates those
issues determined to possess extremely strong safety
characteristics as A-1+.
- --------------------------------------------------------------------------------
A-2 Prime-2 (P-2) Capacity for timely payment on commercial paper is
satisfactory, but the relative degree of safety is not
as high as for issues designated A-1. Earnings trends
and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics,
while still appropriated, may be more affected by
external conditions. Ample alternate liquidity is
maintained.
- --------------------------------------------------------------------------------
A-3 Prime-3 (P-3) Satisfactory capacity for timely
repayment. Issues that carry this rating are somewhat
more vulnerable to the adverse changes in circumstances
than obligations carrying the higher designations.
- --------------------------------------------------------------------------------

NOTE RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying
strong protection from established cash flows of funds
for their servicing or from established and broad-based
access to the market for refinancing, or both.
- --------------------------------------------------------------------------------
SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins
of protection ample, although not so large as in the
preceding group.
- --------------------------------------------------------------------------------
SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all security
elements accounted for, but lacking the undeniable
strength of the preceding grades. Market access for
refinancing, in particular, is likely to be less
well established.
- --------------------------------------------------------------------------------
SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying specific risk
but having protection and not distinctly or
predominantly speculative.
- --------------------------------------------------------------------------------

Statement of Additional Information 33

[back cover]

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

You can receive a free copy of the annual and semiannual reports, and ask any
questions about the funds, by contacting us at the address or one of the
telephone numbers listed below.

If you own or are considering purchasing fund shares through

* an employer-sponsored retirement plan
* a bank
* a broker-dealer
* an insurance company
* another financial intermediary

you can receive the annual and semiannual reports directly from them.

You can also get information about the funds from the Securities and Exchange
Commission (SEC).

* In person SEC Public
Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for
location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference
Section
Washington, D.C.
20549-6009
(The SEC will charge a fee for copying the
documents.)

Investment Company Act File No. 811-4025

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

INVESTOR RELATIONS
1-800-345-2021 or 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

WWW.AMERICANCENTURY.COM

FAX
816-340-7962

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

BUSINESS; NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-353

SH-PRS-17512 9910

<PAGE>
AMERICAN CENTURY MUNICIPAL TRUST

PART C OTHER INFORMATION

Item 23 EXHIBITS (all exhibits not filed herewith are being incorporated herein
by reference).

(a) Amended Declaration of Trust dated March 9, 1998, revised March 1,
1999 (filed electronically as Exhibit a to Post-Effective Amendment
No. 27 to the Registration Statement on September 2, 1999, File No.
2-91229).

(b) Amended and Restated Bylaws dated March 9, 1998 (filed
electronically as Exhibit 2 to Post-Effective Amendment No. 23 to
the Registration Statement on March 26, 1998, File No. 2-91229).

(c) Registrant hereby incorporates by reference, as though set forth
fully herein, Article III, Article IV, Article V, Article VI and
Article VIII of Registrant's Amended and Restated Agreement and
Declaration of Trust, appearing as Exhibit (a) to this
Post-Effective Amendment No. 26 to the Registration Statement on
Form N-1A of the Registrant; and Article II, Article III, Article IV
and Article V of Registrant's Amended and Restated Bylaws appearing
as Exhibit 2 to Post-Effective Amendment No. 23 on Form N-1A of the
Registrant.

(d) (1) Investor Class Investment Management Agreement between American
Century Municipal Trust and American Century Investment Management,
Inc., dated August 1, 1997 (filed electronically as Exhibit 5 to
Post-Effective Amendment No. 33 to the Registration Statement of
American Century Government Income Trust on July 31, 1997, File No.
2-99222).

(2) Amendment dated March 31, 1998 to the Investor Class Investment
Management Agreement between American Century Municipal Trust and
American Century Investment Management, Inc. (filed electronically
as Exhibit 5 to Post-Effective Amendment No. 23 to the Registration
Statement on March 26, 1998, File No. 2-91229).

(e) (1) Distribution Agreement between American Century Municipal Trust
and Funds Distributor, Inc., dated January 15, 1998 (filed
electronically as Exhibit 6 to Post-Effective Amendment No. 28 to
the Registration Statement of American Century Target Maturities
Trust on January 30, 1998, File No. 2-94608).

(2) Amendment No. 1 to the Distribution Agreement between American
Century Municipal Trust and Funds Distributor, Inc. dated June 1,
1998 (filed electronically as Exhibit b6b to Post-Effective
Amendment No. 11 to the Registration Statement of American Century
Capital Portfolios, Inc. on June 26, 1998, File No. 33-64872).

(3) Amendment No. 2 to the Distribution Agreement between American
Century Municipal Trust and Funds Distributor, Inc. dated December
1, 1998 (filed electronically as Exhibit b6c to Post-Effective
Amendment No. 12 to the Registration Statement of American Century
World Mutual Funds, Inc. on November 13, 1998, File No. 33-39242).

(4) Amendment No. 3 to the Distribution Agreement between American
Century Municipal Trust and Funds Distributor, Inc. dated January
29, 1999 (filed electronically as Exhibit e4 to Post-Effective
Amendment No. 24 of American Century Variable Portfolios, Inc. on
January 15, 1999, File No. 33-14567).

(5) Amendment No. 4 to the Distribution Agreement between American
Century Municipal Trust and Funds Distributor, Inc. dated July 30,
1999 (filed electronically as Exhibit e5 to Post-Effective Amendment
No. 16 of American Century Capital Portfolios, Inc. on July 29,
1999, File No. 33-64872).

(f) Not applicable.

(g) (1) Master Agreement by and between Twentieth Century Services, Inc.
and Commerce Bank, N.A. dated January 22, 1997 (filed electronically
as Exhibit 8e to Post-Effective Amendment No. 76 to the Registration
Statement of American Century Mutual Funds, Inc. on February 28,
1997, File No. 2-14213).

(2) Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed
electronically as Exhibit 8 to Post-Effective Amendment No. 31 to
the Registration Statement of American Century Government Income
Trust on February 7, 1997, File No. 2-99222).

(h) (1) Transfer Agency Agreement between American Century Municipal
Trust and American Century Services Corporation, dated August 1,
1997 (filed electronically as Exhibit 9 to Post-Effective Amendment
No. 33 to the Registration Statement of American Century Government
Income Trust on July 31, 1997, File No. 2-99222).

(2) Amendment dated March 9, 1998 to the Transfer Agency Agreement
between American Century Municipal Trust and American Century
Services Corporation (filed electronically as Exhibit 9 to
Post-Effective Amendment No. 23 to the Registration Statement on
March 26, 1998, File No. 2-91229).

(3) Amendment dated June 29, 1998 to the Transfer Agency Agreement
between American Century Municipal Trust and American Century
Services Corporation (filed electronically as Exhibit b9b to
Post-Effective Amendment No. 23 to the Registration Statement of
American Century Quantitative Equity Funds, File No. 33-19589).

(4) Credit Agreement between American Century Funds and The Chase
Manhattan Bank, as Administrative Agent dated as of December 18,
1998 (filed electronically as Exhibit h2 to Post-Effective Amendment
No. 37 to the Registration Statement of American Century Government
Income Trust on May 7, 1999, File No. 2-99222).

(i) Opinion and Consent of counsel (filed electronically as Exhibit i to
Post-Effective Amendment No. 27 to the Registration Statement on
September 2, 1999, File No. 2-91229).

(j) (1) Consent of PricewaterhouseCoopers LLP, independent accountants
is included herein.

(2) Consent of KPMG Peat Marwick, LLP, independent auditors (filed
electronically as Exhibit 11 to Post-Effective Amendment No. 33 to
the Registration Statement on of American Century Government Income
Trust on July 31, 1997, File No. 2-99222).

(3) Power of Attorney dated December 18, 1998 (filed electronically
as Exhibit j3 to Post-Effective Amendment No. 27 to the Registration
Statement on September 2, 1999, File No. 2-91229).

(k) Not applicable.

(l) Not applicable.

(n) Not applicable.

Item 24. Persons Controlled by or Under Control with Registrant - None.

Item 25. Indemnification.

As stated in Article VII, Section 3 of the Declaration of Trust, incorporated
herein by reference to Exhibit a 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).

The Registrant has purchased an insurance policy insuring its officers and
directors against certain liabilities which such officers and trustees may incur
while acting in such capacities and providing reimbursement to the Registrant
for sums which it may be permitted or required to pay to its officers and
trustees by way of indemnification against such liabilities, subject in either
case to clauses respecting deductibility and participation.

Item 26. 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 27. 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.
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Dresdner RCM Investment Funds, Inc.
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Nomura Pacific Basin Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
SoGen Funds, Inc.
SoGen Variable Funds, Inc.
St. Clair Funds, Inc.
TD Waterhouse Trust
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

George A. Rio Executive Vice President President

Donald R. Roberson Executive Vice President none

William S. Nichols Executive Vice President none

Margaret W. Chambers Senior Vice President, none
General Counsel, Chief
Compliance Officer,
Secretary and Clerk

Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer

Paula R. David Senior Vice President none

Gary S. MacDonald Senior Vice President none

Judith K. Benson Senior Vice President none

William J. Nutt Chairman and Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>

Item 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act, and the rules promulgated thereunder, are in the
possession of Registrant, American Century Services Corporation and American
Century Investment Management, Inc., all located at 4500 Main Street, Kansas
City, Missouri 64111.

Item 29. Management Services - Not applicable.

Item 30. Undertakings - Not applicable.
<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 1933 Post-Effective Amendment No. 28 and 1940 Act
Amendment No. 29 to its Registration Statement pursuant to Rule 485(b)
promogulated under the Securities Act of 1933, as amended, and has duly caused
this Post-Effective Amendment No. 28/Amendment No. 29 to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Kansas City, State of Missouri, on the 29th day of
September, 1999.

AMERICAN CENTURY MUNICIPAL TRUST (Registrant)

By: /*/George A. Rio
George A. Rio
President and Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 28/Amendment No. 29 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Date
<S> <C> <C>
*George A. Rio President, Principal Executive September 29, 1999
- --------------------------------- Officer and Principal Financial
George A. Rio Officer

*Maryanne Roepke Vice President, Treasurer and September 29, 1999
- --------------------------------- Principal Accounting Officer
Maryanne Roepke

*James E. Stowers III Trustee, Chairman of the Board September 29, 1999
- ---------------------------------
James E. Stowers III

*William M. Lyons September 29, 1999
- --------------------------------- Trustee
William M. Lyons

*Albert A. Eisenstat Trustee September 29, 1999
- ---------------------------------
Albert A. Eisenstat

*Ronald J. Gilson Trustee September 29, 1999
- ---------------------------------
Ronald J. Gilson

*Myron S. Scholes Trustee September 29, 1999
- ---------------------------------
Myron S. Scholes

*Kenneth E. Scott Trustee September 29, 1999
- ---------------------------------
Kenneth E. Scott

*Isaac Stein Trustee September 29, 1999
- ---------------------------------
Isaac Stein

*Jeanne D. Wohlers Trustee September 29, 1999
- ---------------------------------
Jeanne D. Wohlers
</TABLE>
/s/Charles C.S. Park
*by Charles C.S. Park, Attorney in Fact (pursuant to a Power of Attorney dated
December 18, 1998).

EXHIBIT DESCRIPTION

EX-99.a Amended Declaration of Trust dated March 9, 1998, revised March 1,
1999 (filed as Exhibit a to Post-Effective Amendment No. 27 to the
Registration Statement on Form N-1A of the Registrant, File No.
2-91229, filed September 2, 1999, and incorporated herein by
reference).

EX-99.b Amended and Restated Bylaws dated March 9, 1998 (filed as Exhibit 2
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-91229, filed March 26, 1998,
and incorporated herein by reference).

EX-99.d1 Investor Class Investment Management Agreement between American
Century Municipal Trust and American Century Investment Management,
Inc., dated August 1, 1997 (filed as Exhibit 5 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A of
American Century Government Income Trust, File No. 2-99222, filed
July 31, 1997, and incorporated herein by reference).

EX-99.d2 Amendment No. 1 dated March 31, 1998 to the Investor Class
Investment Management Agreement between American Century Municipal
Trust and American Century Investment Management, Inc. (filed as
Exhibit 5 to Post-Effective Amendment No. 23 to the Registration
Statement on Form N-1A of the Registrant, File No. 2-91229, filed
March 26, 1998, and incorporated herein by reference).

EX-99.e1 Distribution Agreement between American Century Municipal Trust and
Funds Distributor, Inc., dated January 15, 1998 (filed as Exhibit 6
to Post-Effective Amendment No. 28 to the Registration Statement on
Form N-1A of American Century Target Maturities Trust, File No.
2-94608, filed January 30, 1998, and incorporated herein by
reference).

EX-99.e2 Amendment No. 1 to Distribution Agreement between American Century
Municipal Trust and Funds Distributor, Inc. dated June 1, 1998
(filed as Exhibit b6b to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A of American Century Capital
Portfolios, Inc., File No. 33-64872, filed June 26, 1998, and
incorporated herein by reference).

EX-99.e3 Amendment No. 2 to Distribution Agreement between American Century
Municipal Trust and Funds Distributor, Inc. dated December 1, 1998
(filed as Exhibit b6c to Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A of American Century World Mutual
Funds, Inc., File No. 33-39242, filed November 13, 1998, and
incorporated herein by reference).

EX-99.e4 Amendment No. 3 to Distribution Agreement between American Century
Municipal Trust and Funds Distributor, Inc. dated January 29, 1999
(filed as Exhibit e4 to Post-Effective Amendment No. 28 to the
Registration Statement on Form N-1A of American Century Variable
Portfolios, Inc., File No. 33-14567, filed January 15, 1999, and
incorporated herein by reference).

EX-99.e5 Amendment No. 4 to Distribution Agreement between American Century
Municipal Trust and Funds Distributor, Inc. dated July 30, 1999
(filed as Exhibit e5 to Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A of American Century Capital
Portfolios, Inc., File No. 33-64872, filed July 29, 1999, and
incorporated herein by reference).

EX-99.g1 Master Agreement by and between Twentieth Century Services, Inc. and
Commerce Bank, N.A. dated January 22, 1997 (filed as Exhibit 8e to
Post-Effective Amendment No. 76 to the Registration Statement on
Form N-1A of American Century Mutual Funds, Inc., File No. 2-14213,
filed February 28, 1997, and incorporated herein by reference).

EX-99.g2 Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed as
Exhibit b8 to Post-Effective Amendment No. 31 to the Registration
Statement on Form N-1A of American Century Government Income Trust,
File No. 2-99222, filed February 7, 1997, and incorporated herein by
reference).

EX-99.h1 Transfer Agency Agreement between American Century Municipal Trust
and American Century Services Corporation, dated August 1, 1997
(filed as Exhibit 9 to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A of American Century Government
Income Trust, File No. 2-99222, filed July 31, 1997, and
incorporated herein by reference).

EX-99.h2 Amendment No. 1 dated March 9, 1998 to the Transfer Agency Agreement
between American Century Municipal Trust and American Century
Services Corporation (filed as Exhibit 9 to Post-Effective Amendment
No. 23 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-91229, filed March 26, 1998, and incorporated herein by
reference).

EX-99.h3 Amendment No. 2 dated June 29, 1998 to the Transfer Agency Agreement
between American Century Municipal Trust and American Century
Services Corporation (filed as Exhibit b9b to Post-Effective
Amendment No. 23 to the Registration Statement on Form N-1A of
American Century Quantitative Equity Funds, File No. 33-19589, filed
June 29, 1998, and incorporated herein by reference).

EX-99.h4 Credit Agreement between American Century Funds and The Chase
Manhattan Bank, as Administrative Agent dated as of December 18,
1998 (filed as Exhibit h2 to Post-Effective Amendment No. 37 to the
Registration Statement on Form N-1A of American Century Government
Income Trust, File No. 2-99222, filed May 7, 1999, and incorporated
herein by reference).

EX-99.i Opinion and consent of Counsel (filed as Exhibit i to Post-Effective
Amendment No. 27 to the Registration Statement on Form N-1A of the
Registrant, File No. 2-91229, filed September 2, 1999, and
incorporated herein by reference).

EX-99.j1 Consent of PricewaterhouseCoopers LLP, independent accountants is
included herein.

EX-99.j2 Consent of KPMG Peat Marwick, independent auditors (filed as Exhibit
11 to Post-Effective Amendment No. 33 to the Registration Statement
on Form N-1A of American Century Goverment Income Trust, File No.
2-99222, filed July 31, 1997, and incorporated herein by reference).

EX-99.j3 Power of Attorney dated December 18, 1998 (filed as Exhibit j3 to
Post-Effective Amendment No. 27 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-91229, filed September 2,
1999, and incorporated herein by reference).

Consent of Independent Accountants

We consent to the incorporation by reference in Post-Effective Amendment No. 28
to the Registration Statement of the Florida Intermediate-Term Municipal Fund,
Florida Municipal Money Market Fund, Arizona Intermediate-Term Municipal Fund,
Tax Free Money Market Fund, Limited-Term Tax Free Fund, Intermediate-Term Tax
Free Fund, Long-Term Tax Free Fund, High-Yield Municipal Fund (eight of the
funds comprising the American Century Municipal Trust) on Form N-1A of our
reports dated July 12, 1999 on our audits of the financial statements and
financial highlights of the Florida Intermediate-Term Municipal Fund, Florida
Municipal Money Market Fund, Arizona Intermediate-Term Municipal Fund, Tax Free
Money Market Fund, Limited-Term Tax Free Fund, Intermediate-Term Tax Free Fund,
Long-Term Tax Free Fund, High-Yield Municipal Fund, which reports are included
in the Annual Report to Shareholders for the year ended May 31, 1999 which are
incorporated by reference in Post-Effective Amendment No. 28 to the Registration
Statement. We also consent to the reference in the Statement of Additional
Information to our Firm under the caption "Independent Accountants."

/*/PricewaterhouseCoopers LLP

Kansas City, Missouri
September 27, 1999