AMERICAN CENTURY GOVERNMENT INCOME TRUST, N-30D, 1997-11-26

AMERICAN CENTURY GOVERNMENT INCOME TRUST
N-30D, 1997-11-26

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[BOOK ONE]

SEMIANNUAL
REPORT

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

SEPTEMBER 30, 1997

BENHAM
GROUP

Capital Preservation
Government Agency

TABLE OF CONTENTS

Report Highlights .......................................................... 1
Our Message to You ......................................................... 2
Market Perspective ......................................................... 3
Capital Preservation
Performance & Portfolio Information ............................. 4
Management Q & A ................................................ 5
Schedule of Investments ......................................... 7
Financial Highlights ............................................ 18
Government Agency
Performance & Portfolio Information ............................. 8
Management Q & A ................................................ 9
Schedule of Investments ......................................... 11
Financial Highlights ............................................ 19
Statements of Assets and Liabilities ....................................... 12
Statements of Operations ................................................... 13
Statements of Changes in Net Assets ........................................ 14
Notes to Financial Statements .............................................. 15
Proxy Voting Results ....................................................... 20
Retirement Account Information ............................................. 22
Background Information
Investment Philosophy & Policies ................................ 24
Comparative Indices ............................................. 24
Lipper Rankings ................................................. 24
Investment Team Leaders ......................................... 24
Glossary ................................................................... 25

American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios.
We've organized our funds into three distinct groups to help you identify those
that best fit your needs. These groups, which appear below, are designed to help
simplify your fund decisions.

AMERICAN CENTURY INVESTMENTS--FAMILY OF FUNDS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century(reg. tm)
Group(reg. tm) Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Capital Preservation
Government Agency

We welcome your comments or questions about this report. See the back cover for
ways to contact us by mail, phone or e-mail.

Twentieth Century and American Century are registered marks of American Century
Services Corporation. Benham Group is a registered mark of Benham Management
Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

MARKET PERSPECTIVE

* Money market rates declined during the six months ended September 30, 1997.
Nevertheless, "real" yields--stated yields minus the rate of inflation--
remained high because inflation was low.

* Yields came down in part because of the declining federal budget deficit,
which decreased the supply of short-term Treasury debt.

* Strong demand for high-quality U.S. money market securities also helped lower
yields. Foreign buyers and investors looking for a safe haven from volatile
equity markets helped boost demand.

* Tame inflation and slower U.S. economic growth over the last six months
allowed the Federal Reserve to hold short-term interest rates steady.

CAPITAL PRESERVATION

* Lead manager Amy O'Donnell returned to the Capital Preservation management
team after three years managing the highly regarded Benham Prime Money Market
Fund.

* The fund outperformed its Lipper peer group average, returning 2.49% for the
period, compared with the peer group's 2.40% return.

* The fund beat the peer group with a combination of below-average expenses and
an active management strategy.

* We'll likely keep the fund's average maturity a little shorter than the peer
group average, which should help the fund if the Fed raises interest rates.

GOVERNMENT AGENCY

* Lead manager Amy O'Donnell returned to the Government Agency management team
after three years managing the highly regarded Benham Prime Money Market Fund.

* The fund outperformed its Lipper peer group average for the period with a
return of 2.52%, compared with the peer group's 2.44% return. A key reason the
fund outperformed its peers is that our expenses are below average.

* We allowed most of the fund's floating-rate notes to mature and bought
government agency discount notes. The fund's discount notes performed well
when interest rates leveled off after falling sharply in April and May.

* Until we think interest rates are likely to move sharply one way or the other,
we'll likely maintain a relatively conservative, laddered structure with a
large position in agency discount notes.

CAPITAL PRESERVATION

TOTAL RETURNS: AS OF 9/30/97
6 Months 2.49%*
1 Year 4.92%

7-DAY CURRENT YIELD: 4.86%

NET ASSETS: $3.1 billion
(AS OF 9/30/97)

INCEPTION DATE: 10/13/72

TICKER SYMBOL: CPFXX

GOVERNMENT AGENCY

TOTAL RETURNS: AS OF 9/30/97
6 Months 2.52%*
1 Year 4.98%

7-DAY CURRENT YIELD: 5.03%

NET ASSETS: $461.8 million
(AS OF 9/30/97)

INCEPTION DATE: 12/5/89

TICKER SYMBOL: BGAXX

* Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
25.

SEMIANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

During the six months ended September 30, 1997, Benham's government money
market funds continued to offer shareholders very competitive returns. In the
following pages, the fund's investment team provides further details about the
market and how your fund was managed during the period.

We recently made some changes to the funds' investment team. Brian Howell,
who managed the Capital Preservation and Government Agency money market funds
for the last three years, has joined the investment team for the American
Century Strategic Asset Allocation funds. Replacing Brian is Amy O'Donnell, who
managed Capital Preservation and Government Agency from 1993-95.

We also made some important corporate changes. In June, Bill Lyons, American
Century's chief operating officer, became president, assuming full
responsibility for the company's day-to-day operations. With this change, Jim
Stowers, Jr. and Jim Stowers III will be able to spend more time developing and
refining new investment technologies and tools that build on and leverage the
proprietary system they pioneered 25 years ago. One of our goals is to ensure
that we continue to evolve and innovate--building the investment tools today
that will lead us and our investors to success in the next century.

During the summer, American Century held its largest proxy vote ever, asking
shareholders to approve measures to simplify fund management and eliminate
overlapping funds. Most notably, shareholders approved a unified fee for all
funds. In the past, many of our funds had both a management fee and separate
administrative and transfer agency fees. Under the new fee structure, fund
shareholders pay one annual management fee, based on a percentage of fund
assets.

In July, American Century agreed to enter into a business partnership with
J.P. Morgan & Co., Inc., one of the strongest and most respected firms in the
financial services industry. J.P. Morgan will become a significant minority
owner of American Century Companies, Inc. Through this proposed business
partnership, we see many opportunities to expand the range of investment choices
and services we offer you. A global financial services firm, J.P. Morgan has
been in business for more than 150 years, serving institutions, governments and
individuals with complex financial needs.

Within the framework of this new relationship, American Century will
continue to operate as an independent company. No changes in your fund's
investment managers, policies or fees are anticipated as a result of this
transaction. Our corporate management team remains the same, and the Stowers
family will retain voting control of the company.

In closing, we want to reassure you that American Century remains committed
to serving your investment needs first and foremost. Thank you for your trust
and confidence.

Sincerely,

/s/James E. Stowers III /s/James M. Benham
James E. Stowers III James M. Benham
Chief Executive Officer Vice Chairman
American Century Companies, Inc. American Century Companies, Inc.

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE
[line graph - data below]

Federal Funds Rate Target vs. Three-Month T-Bill
April through September 1997
Three-Month T-Bill Fed Funds Rate Target

3/31/97 5.318% 5.5%
4/1/97 5.312% 5.5%
4/2/97 5.290% 5.5%
4/3/97 5.258% 5.5%
4/4/97 5.277% 5.5%
4/7/97 5.276% 5.5%
4/8/97 5.239% 5.5%
4/9/97 5.238% 5.5%
4/10/97 5.290% 5.5%
4/11/97 5.287% 5.5%
4/14/97 5.297% 5.5%
4/15/97 5.291% 5.5%
4/16/97 5.290% 5.5%
4/17/97 5.200% 5.5%
4/18/97 5.287% 5.5%
4/21/97 5.266% 5.5%
4/22/97 5.333% 5.5%
4/23/97 5.342% 5.5%
4/24/97 5.290% 5.5%
4/25/97 5.298% 5.5%
4/28/97 5.318% 5.5%
4/29/97 5.260% 5.5%
4/30/97 5.249% 5.5%
5/1/97 5.217% 5.5%
5/2/97 5.235% 5.5%
5/5/97 5.141% 5.5%
5/6/97 5.177% 5.5%
5/7/97 5.238% 5.5%
5/8/97 5.206% 5.5%
5/9/97 5.173% 5.5%
5/12/97 5.162% 5.5%
5/13/97 5.208% 5.5%
5/14/97 5.166% 5.5%
5/15/97 5.123% 5.5%
5/16/97 5.183% 5.5%
5/19/97 5.297% 5.5%
5/20/97 5.218% 5.5%
5/21/97 5.124% 5.5%
5/22/97 5.175% 5.5%
5/23/97 5.162% 5.5%
5/26/97 5.161% 5.5%
5/27/97 5.120% 5.5%
5/28/97 5.145% 5.5%
5/29/97 5.019% 5.5%
5/30/97 4.945% 5.5%
6/2/97 4.861% 5.5%
6/3/97 5.083% 5.5%
6/4/97 5.082% 5.5%
6/5/97 5.102% 5.5%
6/6/97 5.048% 5.5%
6/9/97 5.037% 5.5%
6/10/97 5.041% 5.5%
6/11/97 4.978% 5.5%
6/12/97 4.967% 5.5%
6/13/97 4.965% 5.5%
6/16/97 4.965% 5.5%
6/17/97 5.041% 5.5%
6/18/97 5.062% 5.5%
6/19/97 5.071% 5.5%
6/20/97 5.080% 5.5%
6/23/97 5.162% 5.5%
6/24/97 5.135% 5.5%
6/25/97 5.103% 5.5%
6/26/97 5.123% 5.5%
6/27/97 5.142% 5.5%
6/30/97 5.183% 5.5%
7/1/97 5.200% 5.5%
7/2/97 5.228% 5.5%
7/3/97 5.142% 5.5%
7/4/97 5.141% 5.5%
7/7/97 5.079% 5.5%
7/8/97 5.104% 5.5%
7/9/97 5.103% 5.5%
7/10/97 5.144% 5.5%
7/11/97 5.131% 5.5%
7/14/97 5.141% 5.5%
7/15/97 5.197% 5.5%
7/16/97 5.186% 5.5%
7/17/97 5.217% 5.5%
7/18/97 5.256% 5.5%
7/21/97 5.266% 5.5%
7/22/97 5.223% 5.5%
7/23/97 5.197% 5.5%
7/24/97 5.217% 5.5%
7/25/97 5.235% 5.5%
7/28/97 5.235% 5.5%
7/29/97 5.239% 5.5%
7/30/97 5.238% 5.5%
7/31/97 5.238% 5.5%
8/1/97 5.277% 5.5%
8/4/97 5.276% 5.5%
8/5/97 5.291% 5.5%
8/6/97 5.290% 5.5%
8/7/97 5.300% 5.5%
8/8/97 5.287% 5.5%
8/11/97 5.297% 5.5%
8/12/97 5.322% 5.5%
8/13/97 5.322% 5.5%
8/14/97 5.331% 5.5%
8/15/97 5.235% 5.5%
8/18/97 5.255% 5.5%
8/19/97 5.229% 5.5%
8/20/97 5.238% 5.5%
8/21/97 5.258% 5.5%
8/22/97 5.256% 5.5%
8/25/97 5.287% 5.5%
8/26/97 5.271% 5.5%
8/27/97 5.270% 5.5%
8/28/97 5.218% 5.5%
8/29/97 5.225% 5.5%
9/1/97 5.224% 5.5%
9/2/97 5.183% 5.5%
9/3/97 5.145% 5.5%
9/4/97 5.144% 5.5%
9/5/97 5.152% 5.5%
9/8/97 5.141% 5.5%
9/9/97 5.125% 5.5%
9/10/97 5.103% 5.5%
9/11/97 5.123% 5.5%
9/12/97 5.090% 5.5%
9/15/97 5.131% 5.5%
9/16/97 5.052% 5.5%
9/17/97 5.103% 5.5%
9/18/97 5.058% 5.5%
9/19/97 5.059% 5.5%
9/22/97 5.027% 5.5%
9/23/97 5.001% 5.5%
9/24/97 4.927% 5.5%
9/25/97 4.926% 5.5%
9/26/97 4.997% 5.5%
9/29/97 4.996% 5.5%
9/30/97 5.105% 5.5%

Source: Bloomberg Financial Markets

Money market rates declined in the six months ended September 30, 1997. The
three-month Treasury bill (T-bill) returned 2.55% for the period, while its
yield fell from 5.32% on March 31 to 5.10% by the end of September.
Nevertheless, "real" money market rates--stated yields minus the rate of
inflation--remained high because inflation was relatively low during the period.

DECLINING SUPPLY

The smaller federal budget deficit was the primary reason yields on
government money market securities fell during the period. A smaller deficit
meant the government had less need to borrow. As a result, the size of the U.S.
Treasury Department's weekly bill auctions declined during the period.

The auctions ranged in size from $14-18 billion, averaging about $15
billion. Only a few years ago, auctions of up to $25 billion weren't uncommon.
Other things being equal, lower supply means declining yields for existing
Treasury securities.

Government agency securities closely track the Treasury market, so falling
yields for Treasury securities also lowered yields on government agency
securities. In addition, short-term debt issuance by many government agencies
also declined during the period.

STRONG DEMAND

Demand for high-quality short-term securities was also relatively strong
during the period. Equity investors tend to hold more T-bills when the stock
market sells off. The equity markets were very volatile during the period, so
there were a lot of crossover buyers of T-bills.

In addition, foreign demand for U.S. money market securities remained strong
during the period. High real U.S. interest rates, compared with record low rates
abroad, made U.S. Treasury securities very attractive to foreign buyers.

The combination of steady demand and limited supply caused the three-month
T-bill, which should track the federal funds rate target relatively closely, to
trade 30-60 basis points lower (see the accompanying chart).

FED ON HOLD

Other factors lowering yields of government money market securities during
the period were tame inflation and a slower rate of economic growth. Inflation
rose at an annual rate of only 1.6% for the first nine months of the year. After
expanding at an annual rate of nearly 5% during the first quarter of 1997, the
economy grew by only 3.3% in the second quarter. The Commerce Department
estimates the economy grew by 3.5% in the third quarter.

Tame inflation and the slower, more-sustainable pace of growth during the
second and third quarters allowed the Federal Reserve to hold interest rates
steady throughout the period. Contrast that with the first quarter, when the Fed
raised short-term interest rates to head off potential inflation.

SEMIANNUAL REPORT MARKET PERSPECTIVE 3

<TABLE>
<CAPTION>
CAPITAL PRESERVATION
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS OF SEPTEMBER 30, 1997
<S> <C> <C> <C> <C> <C>
Capital Preservation ............................. 2.49% 4.92% 5.01% 4.16% 5.29%
90-Day Treasury Bill Index ....................... 2.55% 5.15% 5.33% 4.55% 5.53%
Average U.S. Treasury Money Market Fund(1) ....... 2.40% 4.77% 4.90% 4.06% 5.27%
Fund's Ranking Among U.S. Treasury
Money Market Funds(1) ............................ -- 27 out of 95 23 out of 80 15 out of 54 6 out of 15
- ----------
(1) According to Lipper Analytical Services.
</TABLE>

See pages 24-25 for more information about returns, the comparative index and
Lipper fund rankings.

YIELDS AS OF SEPTEMBER 30, 1997
7-DAY 7-DAY
CURRENT EFFECTIVE
YIELD YIELD

Capital Preservation 4.86% 4.98%

Yields are defined in the Glossary on page 25.

PORTFOLIO AT A GLANCE
9/30/97 3/31/97
Number of Securities 16 19
Weighted Average Maturity 62 days 49 days
Expense Ratio 0.49%* 0.49%

* Annualized.

Money market funds are neither insured nor guaranteed by the U.S. government.

Yields will fluctuate, and there can be no assurance that the fund will be able
to maintain a stable $1.00 share price.

4 CAPITAL PRESERVATION AMERICAN CENTURY INVESTMENTS

CAPITAL PRESERVATION

MANAGEMENT Q & A

An interview with Amy O'Donnell, a portfolio manager on the government money
market funds investment team. Amy returned to the Capital Preservation
management team in May after three years managing the highly regarded Benham
Prime Money Market Fund. Amy previously managed Capital Preservation from
1993-95. She is an experienced money market fund manager who joined the company
in 1987.

HOW DID THE FUND PERFORM?

The fund performed relatively well. For the six months ended September 30,
1997, the fund returned 2.49%, compared with the 2.40% average return of the 99
"U.S. Treasury Money Market Funds" tracked by Lipper Analytical Services. (See
the Total Returns table on the previous page for other fund performance
comparisons.) The fund also produced more income than the average Treasury money
market fund. According to Lipper, the fund's 7-day effective yield as of
September 30, 1997 was 4.98%, compared with the 4.85% yield of its peer group
average.

HOW DID THE FUND MANAGE TO PRODUCE GREATER RETURNS AND INCOME THAN ITS PEERS?

We beat the Lipper category average for the period by actively trading
short-term Treasury securities. Though the fund is always fully invested in the
market, we do have some discretion in deciding when to buy or sell a security.
By understanding where each Treasury bill (T-bill) or note (T-note) ought to
trade, we were able to take advantage of anomalies in the market. Another reason
we outperformed the average Treasury money market fund is that our expenses were
below average. Other things being equal, lower expenses mean higher returns and
yields for our shareholders.

CAN YOU GIVE AN EXAMPLE OF HOW YOU TRADED T-BILLS DURING THE PERIOD?

Sure. We kept a fair amount of the fund, say 20-30%, in "dollar rolls" with
daily or weekly maturities. A good example of a dollar roll would be when we
sell a security and agree to buy it back at a specific future date and price.
Making those trades at favorable prices helped us boost the fund's income. We
also try to stagger their maturities so we always have some cash on hand. Having
this relatively large, liquid position allows us to move quickly when we find
T-bills with longer maturities trading at attractive prices. We're not the only
fund that does this, but our experienced management team did a good job of
making the most of these trades to enhance the fund's returns.

WHAT WERE SOME SECURITIES YOU THOUGHT WERE GOOD BUYS?

During the period, we bought higher-yielding T-notes with remaining
maturities of five to six months in particular. These securities were much more
attractively valued and tended to yield about 40-50 basis points more than the
three-month T-bill. As we

[pie charts]

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 9/30/97)
Treasury Bills 61%
Treasury Notes 39%

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 3/31/97)
Treasury Notes 53%
Treasury Bills 47%

SEMIANNUAL REPORT CAPITAL PRESERVATION 5

CAPITAL PRESERVATION

discussed in the Market Perspective on page 3, three-month T-bill yields fell
during the period because of limited supply and strong demand.

YOU EXTENDED THE FUND'S AVERAGE MATURITY DURING THE PERIOD. WHY?

We began the period with a relatively short average maturity of around 50
days, because the Fed had just raised short-term interest rates in late March.
Having a relatively short average maturity in a rising interest rate environment
allowed us to more quickly reinvest matured assets in higher-yielding
securities. But as economic growth slowed and rates declined, we extended the
fund's maturity out to around 60 days. A longer average maturity benefited the
fund as rates declined because we were able to lock in higher yields.

BUT THE FUND'S AVERAGE MATURITY WAS STILL SHORTER THAN THE AVERAGE TREASURY
MONEY MARKET FUND. WHY?

Remember that you're only looking at two snapshots in time, and we adjusted
the fund's maturity as conditions changed throughout the period. So we were
sometimes longer and sometimes shorter than the average. When the fund's average
maturity was shorter than the average Treasury money market fund, we were able
to aggressively buy the longer-term, higher-yielding securities we wanted
without pushing the fund's maturity too far past the average. Keep in mind that
holding 20-30% of the fund in daily and weekly securities also held down the
maturity.

WHAT'S YOUR OUTLOOK FOR INTEREST RATES OVER THE NEXT SIX MONTHS?

We expect supply and demand factors to continue to dominate the market in
the coming months. Smaller federal budget deficits mean we could see lower
levels of Treasury debt issuance going forward. That would likely keep yields
low on three-month T-bills. But the Fed is concerned that strong economic
growth, low unemployment and rising wages could translate into inflation down
the road. Though we don't think the Fed needs to raise interest rates, we
wouldn't be surprised if they decided to take out some insurance against
inflation by raising rates.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND GOING FORWARD?

As long as supply and demand factors continue to dominate the market, we'll
likely underweight three-month T-bills and maintain our concentration in dollar
rolls and securities with maturities of five to six months. We'll also likely
keep the fund's average maturity a little lower than the peer group average,
which should benefit the fund if the Fed decides to raise rates. And though
yields typically jump sharply after a rate hike, lately they've also tended to
come back down relatively quickly. So we would view a rate hike as a great
buying opportunity.

[pie charts]

PORTFOLIO COMPOSITION BY MATURITY (as of 9/30/97)
1-30 days 18%
31-60 days 35%
61-90 days 17%
91-180 days 30%

PORTFOLIO COMPOSITION BY MATURITY (as of 3/31/97)
1-30 days 33%
31-60 days 34%
61-90 days 22%
91-180 days 11%

6 CAPITAL PRESERVATION AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
CAPITAL PRESERVATION

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- -----------------------------------------------------------------------------------

<S> <C> <C>
U.S. TREASURY BILLS(1)

$ 15,000,000 U.S. Treasury Bills, 5.10%,
10/16/97 $ 14,968,532

52,000,000 U.S. Treasury Bills, 5.19%,
10/30/97 51,785,566

384,000,000 U.S. Treasury Bills, 5.12%,
11/6/97 382,055,335

25,000,000 U.S. Treasury Bills, 5.20%,
11/13/97 24,846,365

200,000,000 U.S. Treasury Bills, 5.13%,
11/20/97 198,589,661

150,000,000 U.S. Treasury Bills, 5.02%,
12/4/97 148,675,556

280,000,000 U.S. Treasury Bills, 4.96%,
12/26/97 276,724,158

450,000,000 U.S. Treasury Bills, 4.99%,
1/2/98 444,317,430
-------------------------

TOTAL U.S. TREASURY BILLS--60.7% 1,541,962,603
------------------------

U.S. TREASURY NOTES(1)

50,000,000 U.S. Treasury Notes, 5.625%,
10/31/97 50,015,024

100,000,000 U.S. Treasury Notes, 5.75%,
10/31/97 100,045,363

200,000,000 U.S. Treasury Notes, 7.375%,
11/15/97 200,426,321

75,000,000 U.S. Treasury Notes, 8.875%,
11/15/97 75,294,248

100,000,000 U.S. Treasury Notes, 5.375%,
11/30/97 99,988,966

147,000,000 U.S. Treasury Notes, 5.00%,
1/31/98 146,725,661

300,000,000 U.S. Treasury Notes, 7.25%,
2/15/98 301,747,700

25,000,000 U.S. Treasury Notes, 5.125%,
2/28/98 24,949,358
------------------------

TOTAL U.S. TREASURY NOTES--39.3% 999,192,641
------------------------

TOTAL INVESTMENT SECURITIES--100.0% $2,541,155,244
========================
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

(1) The rates for U.S. Treasury Bills are the yield to maturity at purchase. The
rates for U.S. Treasury Notes are the stated coupon rates.

See Notes to Financial Statements

SEMIANNUAL REPORT CAPITAL PRESERVATION 7

<TABLE>
<CAPTION>
GOVERNMENT AGENCY
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS 5 YEARS LIFE OF FUND(1)
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS OF SEPTEMBER 30, 1997
<S> <C> <C> <C> <C> <C>
Government Agency ............................... 2.52% 4.98% 5.13% 4.26% 4.97%
90-Day Treasury Bill Index ...................... 2.55% 5.15% 5.33% 4.55% 4.98%(2)
Average U.S. Government Money Market Fund(3) .... 2.44% 4.84% 4.94% 4.10% 4.66%(2)
Fund's Ranking Among U.S. Government
Money Market Funds(3) ........................... -- 38 out of 120 22 out of 104 20 out of 82 4 out of 57
</TABLE>
- ----------
(1) Inception date was December 5, 1989.

(2) Returns since 12/31/89, the date nearest the fund's inception for which
return data are available.

(3) According to Lipper Analytical Services.

See pages 24-25 for more information about returns, the comparative index and
Lipper fund rankings.

YIELDS AS OF SEPTEMBER 30, 1997
7-DAY 7-DAY
CURRENT EFFECTIVE
YIELD YIELD

Government Agency 5.03% 5.16%

Yields are defined in the Glossary on page 25.

PORTFOLIO AT A GLANCE
9/30/97 3/31/97
Number of Securities 31 49
Weighted Average Maturity 49 days 42 days
Expense Ratio 0.53%* 0.57%

* Annualized.

Money market funds are neither insured nor guaranteed by the U.S. government.

Yields will fluctuate, and there can be no assurance that the fund will be able
to maintain a stable $1.00 share price.

8 GOVERNMENT AGENCY AMERICAN CENTURY INVESTMENTS

GOVERNMENT AGENCY

MANAGEMENT Q & A

An interview with Amy O'Donnell, a portfolio manager on the government money
market funds investment team. Amy returned to the Government Agency management
team in May after three years managing the highly regarded Benham Prime Money
Market Fund. Amy previously managed Government Agency Money Market from 1993-95.
She is an experienced money market fund manager who joined the company in 1987.

HOW DID THE FUND PERFORM?

The fund performed well relative to its peers. For the six months ended
September 30, 1997, the fund returned 2.52%, compared with the 2.44% average
return of the 122 "U.S. Government Agency Money Market Funds" tracked by Lipper
Analytical Services. (See the Total Returns table on the previous page for other
fund performance comparisons.) The fund also produced more income than the
average government money market fund. According to Lipper, the fund's 7-day
effective yield as of September 30, 1997 was 5.16%, compared with the 4.94%
yield of its peer group average.

One reason the fund outperformed the peer group is that our expenses were
below average. Other things being equal, lower expenses mean higher returns and
yields for our shareholders.

YOU DECREASED THE FUND'S FLOATING-RATE NOTE (FLOATERS) HOLDINGS. WHY?

Holding floaters made sense in late March and early April because the
Federal Reserve had just raised interest rates. Floating-rate notes reset their
interest rates periodically, so they were a good way to capture higher yields
when rates were rising. But we let most of our floaters mature during the period
because we didn't think the Fed was going to hike rates again and interest rates
began to fall.

WHY DID YOU INCREASE THE FUND'S HOLDINGS OF GOVERNMENT AGENCY DISCOUNT NOTES?

We buy a lot of discount notes when we don't think rates are likely to move
sharply in either direction. Discount notes are to government agencies what
T-bills are to the Treasury: very liquid short-term debt. They're the most
generic and conservative investments the fund can make and are what we buy when
we don't have a strong conviction about the direction of interest rates. We also
staggered the notes' maturities so they occurred at regular intervals. Holding a
lot of discount notes in this laddered structure was a good strategy during the
period because rates leveled off after falling sharply in April and May (see
page 3).

YOU EXTENDED THE FUND'S AVERAGE MATURITY SLIGHTLY DURING THE PERIOD. WHY?

We began the period with a relatively short average maturity of around 40
days, because the Fed had just raised short-term interest rates in late March.
Having a relatively short average maturity in a rising interest rate environment
allowed us to more quickly reinvest matured assets in higher-yielding
securities. But as economic growth slowed and rates declined, we extended the
fund's maturity out to around 50

[pie charts]

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 9/30/97)
Government Agency Discount
Notes 90%
Floating-Rate Agency Notes 5%
Government Agency Notes 5%

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 3/31/97)
Government Agency Discount
Notes 77%
Floating-Rate Agency Notes 20%
Government Agency Notes 3%

SEMIANNUAL REPORT GOVERNMENT AGENCY 9

GOVERNMENT AGENCY

days. A longer average maturity benefited the fund as rates declined because we
were able to lock in higher yields.

BUT THE FUND'S AVERAGE MATURITY WAS STILL SHORTER THAN THE AVERAGE GOVERNMENT
MONEY MARKET FUND. WHY?

We kept the fund's maturity shorter than the average government money market
fund for a couple reasons. By keeping the fund's maturity relatively short, we
were able to aggressively buy longer-term, higher-yielding securities when we
wanted. The other reason was that the yield curve was relatively flat, which
meant we weren't being compensated enough to extend out too far.

ABOUT HALF OF THE FUND'S ASSETS WERE IN SECURITIES ISSUED BY THE FEDERAL HOME
LOAN BANK (FHLB). WHY THE CONCENTRATION?

We're committed to providing state tax-free income for our shareholders, but
that limits the number of government agencies whose debt we can buy. During the
period, debt issuance for most of these agencies was low. FHLB was the most
active issuer of state tax-free government agency securities during the period,
so we ended the period with a relatively large position in securities issued by
FHLB.

WHAT'S YOUR OUTLOOK FOR INTEREST RATES OVER THE NEXT SIX MONTHS?

We expect supply and demand factors to continue to dominate the market in
the coming months. Smaller federal budget deficits mean we could see lower
levels of Treasury and government agency debt issuance going forward. That would
likely keep yields low on agency securities. But the Fed is concerned that
strong economic growth, low unemployment and rising wages could translate into
inflation down the road. Though we don't think the Fed needs to raise interest
rates, we wouldn't be surprised if they decided to take out some insurance
against inflation by raising rates.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND GOING FORWARD?

Until we think rates are likely to move sharply one way or the other, we'll
likely maintain a large position in agency discount notes. We'll also likely
keep the fund's average maturity a little lower than the peer group average,
which should benefit the fund if the Fed decides to raise rates. We're also
looking to diversify the fund's holdings away from FHLB securities a little
more, but we won't buy a security solely for diversity's sake--we're only going
to buy securities that we feel are selling at attractive yield levels.

[pie charts]

PORTFOLIO COMPOSITION BY MATURITY (as of 9/30/97)
1-30 days 43%
31-60 days 23%
61-90 days 23%
91-180 days 9%
181-397 days 2%

PORTFOLIO COMPOSITION BY MATURITY (as of 3/31/97)
1-30 days 43%
31-60 days 29%
61-90 days 16%
91-180 days 12%

10 GOVERNMENT AGENCY AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
GOVERNMENT AGENCY

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- ------------------------------------------------------------------------------------

<S> <C> <C>
U.S. GOVERNMENT AGENCY DISCOUNT NOTES(1)

$ 44,360,000 FFCB Discount Note,
5.40%-5.82%,
10/6/97 through 10/28/97 $ 44,304,144

8,720,000 FFCB Discount Note,
5.41%, 11/5/97 8,674,474

5,000,000 FFCB Discount Note,
5.78%, 11/13/97 4,966,496

7,730,000 FFCB Discount Note,
5.45%, 12/1/97 7,660,057

30,000,000 FHLB Discount Note,
6.00%, 10/1/97 30,000,000

10,000,000 FHLB Discount Note,
5.42%, 10/8/97 9,989,500

70,879,000 FHLB Discount Note,
5.42%-5.50%,
10/14/97 through 10/29/97 70,628,912

15,500,000 FHLB Discount Note,
5.46%, 11/5/97 15,418,775

103,441,000 FHLB Discount Note,
5.44%-5.54%,
11/12/97 through 1/30/98 102,237,838

10,780,000 SLMA Discount Note,
5.50%, 12/31/97 10,633,126

19,000,000 TVA Discount Note,
5.45%-5.48%,
10/20/97 through 10/22/97 18,943,945

59,000,000 TVA Discount Note,
5.45%, 11/13/97 58,620,155

31,600,000 TVA Discount Note,
5.48%, 12/15/97 31,243,321
------------------------

TOTAL U.S. GOVERNMENT
AGENCY DISCOUNT NOTES--89.8% 413,320,743
------------------------

Principal Amount Value
- ----------------------------------------------------------------------------------------

OTHER U.S. GOVERNMENT AGENCY SECURITIES

$ 9,000,000 FFCB, 5.53%, 2/2/98 $ 8,993,692

8,000,000 FFCB, 6.21%, 8/20/98 8,016,133

15,000,000 FFCB, VRN, 5.29%, 10/7/97,
resets weekly off the 6-month
T-Bill rate with no caps 14,998,105

5,000,000 FHLB, 5.63%, 12/26/97 4,998,192

10,000,000 SLMA, VRN, 5.27%, 10/7/97, resets weekly off the
3-month T-Bill rate plus 0.21% with
no caps 9,999,108
------------------------

TOTAL OTHER U.S. GOVERNMENT
AGENCY SECURITIES--10.2% 47,005,230
------------------------

TOTAL INVESTMENT SECURITIES--100.0% $460,325,973
========================
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

FFCB = Federal Farm Credit Bank

FHLB = Federal Home Loan Bank

SLMA = Student Loan Marketing Association

TVA = Tennessee Valley Authority

VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Coupon rate indicated
is effective September 30, 1997.

resets= The frequency with which a fixed-income security's coupon changes,
based on current market conditions or an underlying index. The more
frequently a security resets, the less risk the investor is taking that
the coupon will vary significantly from current market rates.

(1) Rates disclosed are the yield to maturity at purchase.

See Notes to Financial Statements

SEMIANNUAL REPORT GOVERNMENT AGENCY 11

STATEMENTS OF ASSETS AND LIABILITIES

CAPITAL GOVERNMENT
SEPTEMBER 30, 1997 (UNAUDITED) PRESERVATION AGENCY

ASSETS

Investment securities, at value (Note 1) ... $ 2,541,155,244 $ 460,325,973

Cash ....................................... 9,490,000 1,288,476

Receivable for investments sold ............ 837,726,588 --

Interest receivable ........................ 31,846,478 743,511
--------------- -------------
3,420,218,310 462,357,960
--------------- -------------
LIABILITIES

Disbursements in excess
of demand deposit cash ................... 2,798,951 183,223

Payable for investments purchased .......... 296,220,056 --

Payable for capital shares redeemed ........ 2,455,744 123,040

Accrued management fees (Note 2) ........... 1,343,076 187,617

Dividends payable .......................... 6,600 --

Accrued expenses and other liabilities ..... 133,379 20,477
--------------- -------------
302,957,806 514,357
--------------- -------------
Net Assets Applicable to
Outstanding Shares ....................... $ 3,117,260,504 $ 461,843,603
=============== =============
CAPITAL SHARES

Outstanding (Unlimited number
of shares authorized) .................... 3,117,177,012 461,852,703
=============== =============
Net Asset Value Per Share .................. $ 1.00 $ 1.00
=============== =============
NET ASSETS CONSIST OF:

Capital paid in ............................ $ 3,117,177,012 $ 461,852,703

Distributions in excess of net
investment income ........................ (23,540) --

Accumulated net realized gain (loss)
on investment transactions ............... 107,032 (9,100)
--------------- -------------
$ 3,117,260,504 $ 461,843,603
=============== =============

See Notes to Financial Statements

12 STATEMENTS OF ASSETS AND LIABILITIES AMERICAN CENTURY INVESTMENTS

STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED CAPITAL GOVERNMENT
SEPTEMBER 30, 1997 (UNAUDITED) PRESERVATION AGENCY

INVESTMENT INCOME

Income:

Interest ................................... $79,835,987 $ 12,677,756
----------- ------------
Expenses (Note 2):

Investment advisory fees ................... 4,580,539 796,815

Administrative fees ........................ 1,146,326 144,980

Transfer agency fees ....................... 933,109 163,368

Printing and postage ....................... 272,570 55,183

Custodian fees ............................. 144,808 34,766

Auditing and legal fees .................... 35,910 8,663

Telephone expenses ......................... 51,150 7,168

Trustees' fees and expenses ................ 48,007 5,946

Registration and filing fees ............... 30,858 10,232

Other operating expenses ................... 26,872 5,584
----------- ------------
Total expenses ........................... 7,270,149 1,232,705
----------- ------------
Net investment income ...................... 72,565,838 11,445,051
----------- ------------
Net realized gain (loss)
on investments ........................... 713,978 (9,100)
----------- ------------
Net Increase in Net Assets
Resulting from Operations ................ $73,279,816 $ 11,435,951
=========== ============
See Notes to Financial Statements

SEMIANNUAL REPORT STATEMENTS OF OPERATIONS 13

<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS

CAPITAL GOVERNMENT
PRESERVATION AGENCY

SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
AND YEAR ENDED MARCH 31, 1997

September 30, March 31, September 30, March 31,
Increase (Decrease) in Net Assets 1997 1997 1997 1997

OPERATIONS

<S> <C> <C> <C> <C>
Net investment income ................. $ 72,565,838 $ 141,191,337 $ 11,445,051 $ 23,085,479

Net realized gain (loss) on investments 713,978 752,673 (9,100) 10,130
--------------- --------------- ------------- -------------
Net increase in net assets resulting
from operations ..................... 73,279,816 141,944,010 11,435,951 23,095,609
--------------- --------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS

From net investment income ............ (72,715,209) (141,065,506) (11,445,051) (23,085,479)

From net realized gains on
investment transactions ............. (523,426) (752,673) -- (10,130)

In excess of net realized gains
on investment transactions .......... -- (83,520) -- --
--------------- --------------- ------------- -------------
Decrease in net assets
from distributions
to shareholders ..................... (73,238,635) (141,901,699) (11,445,051) (23,095,609)
--------------- --------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS

Proceeds from shares sold ............. 1,114,009,231 2,258,573,530 183,770,462 409,848,791

Proceeds from shares issued
in connection
with acquisition (Note 3) ........... 213,901,483 -- -- --

Proceeds from reinvestment
of distributions .................... 69,743,046 136,153,282 11,004,481 22,319,108

Payments for shares redeemed .......... (1,258,449,145) (2,494,312,912) (203,681,052) (464,737,370)
--------------- --------------- ------------- -------------
Net increase (decrease) in
net assets from
capital share transactions .......... 139,204,615 (99,586,100) (8,906,109) (32,569,471)
--------------- --------------- ------------- -------------
Net increase (decrease)
in net assets ....................... 139,245,796 (99,543,789) (8,915,209) (32,569,471)

NET ASSETS

Beginning of period ................... 2,978,014,708 3,077,558,497 470,758,812 503,328,283
--------------- --------------- ------------- -------------
End of period ......................... $ 3,117,260,504 $ 2,978,014,708 $ 461,843,603 $ 470,758,812
=============== =============== ============= =============
Undistributed (distributions in
excess of)
net investment income ............... $ (23,540) $ 125,831 -- --
=============== =============== ============= =============
TRANSACTIONS IN SHARES
OF THE FUNDS

Sold .................................. 1,114,009,231 2,258,573,530 183,770,462 409,848,791

Issued in connection with
acquisition (Note 3) ................ 213,901,483 -- -- --

Issued in reinvestment of
distributions ....................... 69,743,046 136,153,282 11,004,481 22,319,108

Redeemed .............................. (1,258,449,145) (2,494,312,912) (203,681,052) (464,737,370)
--------------- --------------- ------------- -------------
Net increase (decrease) ............... 139,204,615 (99,586,100) (8,906,109) (32,569,471)
=============== =============== ============= =============
</TABLE>

See Notes to Financial Statements

14 STATEMENTS OF CHANGES IN NET ASSETS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Government Income Trust (the Trust) is
registered under the Investment Company Act of 1940 as an open-end management
investment company. American Century - Benham Capital Preservation Fund (Capital
Preservation) and American Century - Benham Government Agency Money Market Fund
(Government Agency) (the Funds) are two of the eight funds issued by the Trust.
Capital Preservation seeks maximum safety and liquidity and intends to pursue
its investment objectives by investing exclusively in short-term U.S. Treasury
securities guaranteed by the direct full faith and credit pledge of the U.S.
government. Government Agency seeks to provide the highest rate of current
return on its investments, consistent with safety of principal and maintenance
of liquidity by investing exclusively in short-term obligations of the U.S.
government and its agencies and instrumentalities. The following significant
accounting policies, related to the Funds, are in accordance with accounting
policies generally accepted in the investment company industry.

SECURITY VALUATIONS--Securities are valued at amortized cost, which
approximates current market value. When valuations are not readily available,
securities are valued at fair value as determined in accordance with procedures
adopted by the Board of Trustees.

SECURITY TRANSACTIONS--Security transactions are accounted for on the date
purchased or sold. Net realized gains and losses are determined on the
identified cost basis, which is also used for federal income tax purposes.

INVESTMENT INCOME--Interest income is recorded on the accrual basis and
includes amortization of premiums and discounts. Premiums and discounts are
amortized daily on a straight-line basis.

FORWARD COMMITMENTS--Periodically, the Funds enter into purchase or sale
transactions on a forward commitment basis. In these transactions, the Funds
sell a security and at the same time make a commitment to purchase the same
security at a future date at a specified price. Conversely, the Funds may
purchase a security and at the same time make a commitment to sell the same
security at a future date at a specified price. These types of transactions are
executed simultaneously in what are known as forward commitments or "roll"
transactions. The Funds take possession of any security they purchase in these
transactions. The Funds maintain segregated accounts consisting of cash or
liquid securities in an amount sufficient to meet the purchase price.

INCOME TAX STATUS--It is the Funds' policy to distribute all net investment
income and net realized capital gains to shareholders and to otherwise qualify
as a regulated investment company under the provisions of the Internal Revenue
Code. Accordingly, no provision has been made for federal or state taxes.

DISTRIBUTIONS--Distributions from net investment income are declared and
credited daily and distributed monthly. The Funds do not expect to realize any
long-term capital gains, and accordingly, do not expect to pay any long-term
capital gains distributions.

SUPPLEMENTARY INFORMATION--Certain officers and trustees of the Trust are
also officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc., the parent of the Trust's investment manager,
American Century Investment Management, Inc. (ACIM), the Trust's distributor,
American Century Investment Services, Inc. and the Trust's transfer agent,
American Century Services Corporation (ACSC).

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the period. Actual results could differ from these
estimates.

SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 15

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The shareholders of Government Agency approved a new management agreement
with ACIM on July 30, 1997, effective August 1, 1997, which replaced the
previously existing contracts between the Funds and Benham Management
Corporation and ACSC for advisory, administrative and transfer agency services.
A new management agreement for Capital Preservation was effective August 30,
1997. (See Note 3 in Notes to Financial Statement). Under the agreement, ACIM
provides all services required by the Funds in exchange for one "unified"
management fee. Expenses excluded from this agreement are brokerage, taxes,
portfolio insurance, interest, fees and expenses of the Trustees who are not
considered "interested persons" as defined in the Investment Company Act of 1940
(including counsel fees) and extraordinary expenses. The annual rate at which
this fee is assessed is determined monthly in a two-step process: First, a fee
rate schedule is applied to the assets of all of the funds in the Fund's
investment category which are managed by ACIM (the "Investment Category Fee").
The overall investment objective of each Fund determines its Investment
Category. The three investment categories are: the Money Market Fund Category,
the Bond Fund Category and the Equity Fund Category. Capital Preservation and
Government Agency are included in the Money Market Fund Category. Second, a
separate fee rate schedule is applied to the assets of all of the funds managed
by ACIM (the "Complex Fee"). The Investment Category Fee and the Complex Fee are
then added to determine the unified management fee rate. The management fee is
paid monthly by each Fund based on each Fund's aggregate average daily net
assets during the previous month multiplied by the monthly management fee rate.

The annualized Investment Category Fee schedule for the Funds is as follows:

0.2500% of the first $1 billion
0.2070% of the next $1 billion
0.1660% of the next $3 billion
0.1490% of the next $5 billion
0.1380% of the next $15 billion
0.1375% of the next $25 billion
0.1370% of the average daily net assets over $50 billion

The annualized Complex Fee schedule (for all Funds) is as follows:

0.3100% of the first $2.5 billion
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
0.2900% of the average daily net assets over $1,250 billion

Total expenses of $1,311,746 for the month ended September 30, 1997 for
Capital Preservation and total expenses of $372,818 for the two months ended
September 30, 1997 for Government Agency were incurred under the new management
agreement and included in Investment Advisory Fees in the Statements of
Operations. Total expenses, under the previous agreement, for the five months
ended August 29, 1997, were $5,958,403, for Capital Preservation. Total
expenses, under the previous agreement, for the four months ended July 31, 1997,
were $859,887 for Government Agency. The annualized ratio of operating expenses
to average net assets for the respective periods were 0.49% and 0.55% for
Capital Preservation and Government Agency, respectively.

16 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
3. REORGANIZATION PLAN

On August 29, 1997, Capital Preservation acquired all of the net assets of
American Century - Benham Capital Preservation Fund II (Capital Preservation
II), pursuant to a plan of reorganization approved by the acquired fund's
shareholders on July 30, 1997.

The acquisition was accomplished by a tax-free exchange of 213,901,483
shares of Capital Preservation, the surviving fund in terms of maintaining the
financial statements and performance history in the post-reorganization fund,
for 213,901,483 shares of Capital Preservation II, outstanding on August 29,
1997. The net assets of Capital Preservation and Capital Preservation II
immediately before the acquisition were $2,937,910,603 and $213,901,483,
respectively. Immediately after the acquisition, the combined net assets of
Capital Preservation were $3,151,812,086.

At the same time, Capital Preservation was reorganized as a series issued by
American Century Government Income Trust. Capital Preservation was formerly
issued under American Century Capital Preservation Fund, Inc.

SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 17

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CAPITAL PRESERVATION

For a Share Outstanding Throughout the Years Ended March 31 (except as noted)

1997(1) 1997 1996 1995 1994 1993(2)
PER-SHARE DATA

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

Net Investment Income ............ 0.02 0.05 0.05 0.04 0.03 0.01
-------- -------- -------- -------- -------- --------
Distributions

From Net Investment Income ....... (0.02) (0.05) (0.05) (0.04) (0.03) (0.01)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period ..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ======== ========
Total Return(3) .................. 4.97% 4.82% 5.21% 4.31% 2.63% 1.35%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4) ...........0.49%(5) 0.49% 0.51% 0.50% 0.51% 0.50%(5)

Ratio of Net Investment Income
to Average Net Assets ..............4.85%(5) 4.66% 5.07% 4.24% 2.59% 2.68%(5)

Net Assets, End
of Period (in thousands) ..........$3,117,261 $2,978,015 $3,077,558 $2,883,350 $2,786,614 $2,943,242
</TABLE>
- ----------
(1) Six months ended September 30, 1997 (unaudited).

(2) The fiscal year-end was changed from September 30 to March 31 beginning with
the period ended March 31, 1993. This column represents a six-month period.

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

(4) The ratios for years ended March 31, 1997 and March 31, 1996 include
expenses paid through expense offset arrangements.

(5) Annualized.

See Notes to Financial Statements

18 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
GOVERNMENT AGENCY

For a Share Outstanding Throughout the Years Ended March 31 (except as noted)

1997(1) 1997 1996 1995 1994 1993
PER-SHARE DATA

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

Net Investment Income ........... 0.02 0.05 0.05 0.04 0.03 0.03
-------- -------- -------- -------- -------- --------
Distributions

From Net Investment Income ...... (0.02) (0.05) (0.05) (0.04) (0.03) (0.03)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period .... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ======== ========
Total Return(2) ................. 5.02% 4.89% 5.35% 4.47% 2.69% 3.07%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(3) .......... 0.53%(4) 0.57% 0.51% 0.50% 0.50% 0.50%

Ratio of Net Investment
Income to Average
Net Assets ........................ 4.93%(4) 4.76% 5.20% 4.35% 2.65% 3.04%

Net Assets, End
of Period (in thousands) .......... $461,844 $470,759 $503,328 $461,803 $561,766 $646,006
</TABLE>
- ----------
(1) Six months ended September 30, 1997 (unaudited).

(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 ratios for years ended March 31, 1997 and March 31, 1996 include
expenses paid through expense offset arrangements.

(4) Annualized.

See Notes to Financial Statements

SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS 19

PROXY VOTING RESULTS

CAPITAL PRESERVATION

An annual meeting of shareholders was held on July 30, 1997, to vote on the
following proposals. All of the proposals received the required majority of
votes and were adopted.

A summary of voting results is listed below each proposal.

PROPOSAL 1:

To vote on the approval of a plan of reorganization. (See Note 3 in the
notes to financial statements.)

CAPITAL CAPITAL
PRESERVATION PRESERVATION II

For: 1,692,316,384 134,456,431
Against: 123,903,683 6,325,987
Abstain: 38,282,572 2,488,712

GOVERNMENT AGENCY

An annual meeting of shareholders was held on July 30, 1997, to vote on the
following proposals. All of the proposals received the required majority of
votes and were adopted.

A summary of voting results is listed below each proposal.

PROPOSAL 1:

To vote on the selection by the Board of Trustees of Coopers & Lybrand LLP
as independent auditors for the Trust.

For: 283,889,571
Withheld: 7,795,751
Abstain: 3,548,037

PROPOSAL 2:

To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.

For: 275,855,036
Against: 14,508,607
Abstain: 4,869,716

20 PROXY VOTING RESULTS AMERICAN CENTURY INVESTMENTS

PROXY VOTING RESULTS

GOVERNMENT AGENCY

PROPOSAL 3:

To vote on the adoption of standardized investment limitations on the
following items:

* Amend the fundamental investment limitation concerning the issuance of
senior securities.

For: 255,629,986
Against: 20,549,226
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Amend the fundamental investment limitation concerning borrowing.

For: 255,029,519
Against: 21,149,693
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Amend the fundamental investment limitation concerning lending.

For: 254,494,931
Against: 21,684,281
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Eliminate the fundamental investment limitation regarding investments in
illiquid securities.

For: 254,878,164
Against: 21,301,048
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Amend the fundamental investment limitation concerning commodities.

For: 256,019,171
Against: 20,160,041
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Eliminate the fundamental limitation concerning short sales.

For: 254,914,044
Against: 21,265,168
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Eliminate the fundamental investment limitation concerning margin purchases
of securities.

For: 256,071,781
Against: 20,107,431
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Eliminate the fundamental investment limitation concerning warrants.

For: 256,107,703
Against: 20,071,509
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Eliminate the fundamental investment limitation concerning investments in
oil, gas and mineral exploration development programs.

For: 256,048,526
Against: 20,130,686
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

* Eliminate the fundamental investment limitations concerning investments in
securities owned by officers and directors.

For: 254,864,998
Against: 21,314,214
Abstain: 6,509,864
Broker Non-Vote: 12,544,283

SEMIANNUAL REPORT PROXY VOTING RESULTS 21

RETIREMENT ACCOUNT INFORMATION

As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
are subject to federal income tax withholding at the rate of 10% of the total
amount withdrawn, unless you elect not to have withholding apply. If you don't
want us to withhold on this amount, you may send us a written notice not to have
the federal income tax withheld. Your written notice is valid for six months
from the date of receipt at American Century. Even if you plan to roll over the
amount you withdraw to another tax-deferred account, the withholding rate still
applies to the withdrawn amount unless we have received a written notice not to
withhold federal income tax within six months prior to the withdrawal.

When you plan to withdraw, you may make your election by completing our
Exchange/ Redemption form or an IRS Form W-4P. Call American Century for either
form. Your written election is valid for only six months from the date of
receipt at American Century. You may revoke your election at any time by sending
a written notice to us.

Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.

22 RETIREMENT ACCOUNT INFORMATION AMERICAN CENTURY INVESTMENTS

NOTES

SEMIANNUAL REPORT NOTES 23

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

The Benham Group offers 38 fixed-income funds, ranging from money market
funds to long-term bond funds and including both taxable and tax-exempt funds.
Each fund is managed to provide a "pure play" on a specific sector of the
fixed-income market. To ensure adherence to this principle, the basic structure
of each fund's portfolio is tied to a specific market index. Fund managers
attempt to add value by making modest portfolio adjustments based on their
analysis of prevailing market conditions. Investment decisions are made by
management teams, which meet regularly to discuss market analysis and investment
strategies.

In addition to these principles, each fund has its own investment policies:

CAPITAL PRESERVATION seeks to provide interest income exempt from state
taxes while maintaining a stable share price by investing in U.S. Treasury money
market securities.

GOVERNMENT AGENCY seeks to provide interest income exempt from state taxes
while maintaining a stable share price by investing in U.S. government money
market securities.

An investment in the funds is neither insured nor guaranteed by the U.S.
government. Yields will fluctuate, and there can be no assurance that the funds
will be able to maintain a stable net asset value of $1 per share. Past
performance is no guarantee of future results.

COMPARATIVE INDICES

The following index is used in the report to serve as a fund performance
comparison. It is not an investment product available for purchase.

The 90-DAY TREASURY BILL INDEX is derived from secondary market interest
rates published by the Federal Reserve Bank.

LIPPER RANKINGS

LIPPER ANALYTICAL SERVICES, INC. is an independent mutual fund ranking
service that groups funds according to their investment objectives. Rankings are
based on average annual returns for each fund in a given category for the
periods indicated. Rankings are not included for periods less than one year.

The Lipper categories for the U.S. Treasury and government money market
funds are:

U.S. TREASURY MONEY MARKET FUNDS (Capital Preservation)--funds with
dollar-weighted average maturities of less than 90 days that intend to maintain
a stable net asset value and that invest principally in U.S. Treasury
obligations.

U.S. GOVERNMENT MONEY MARKET FUNDS (Government Agency)--funds with
dollar-weighted average maturities of less than 90 days that intend to maintain
a stable net asset value and that invest principally in financial instruments
issued or guaranteed by the U.S. government, its agencies or instrumentalities.

INVESTMENT TEAM LEADERS

Portfolio Manager Amy O'Donnell

24 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 18-19.

YIELDS

* 7-DAY CURRENT YIELD is calculated based on the income generated by an
investment in the fund over a seven-day period and is expressed as an annual
percentage rate.

* 7-DAY EFFECTIVE YIELD is calculated similarly, although this figure is
slightly higher than the fund's 7-Day Current Yield because of the effects of
compounding. The 7-Day Effective Yield assumes that income earned from the
fund's investments is reinvested and generating additional income.

PORTFOLIO STATISTICS

* NUMBER OF SECURITIES--the number of different securities held by a fund on a
given date.

* WEIGHTED AVERAGE MATURITY (WAM)--a measurement of the sensitivity of a
fixed-income portfolio to interest rate changes. WAM indicates the average time
until the securities in the portfolio mature, weighted by dollar amount. The
longer the WAM, the more interest rate exposure and sensitivity the portfolio
has.

* EXPENSE RATIO--the operating expenses of the fund, expressed as a percentage
of average net assets. Shareholders pay an annual fee to the investment manager
for investment advisory and management services. The expenses and fees are
deducted from fund income, not from each shareholder account.

SECURITY TYPES

* FLOATING-RATE NOTES (FLOATERS)--debt securities whose interest rates change
when a designated base rate changes. The base rate is often the federal funds
rate, the 90-day Treasury bill rate or the London Interbank Offered Rate
(LIBOR). Floaters are considered derivatives because they "derive" their
interest rates from their designated base rates. However, floaters are not
"risky" derivatives--their behavior is similar to that of their designated base
rates. The SEC has recognized this similarity and does not consider floaters to
be inappropriate investments for money market funds.

* U.S. GOVERNMENT AGENCY NOTES--intermediate-term debt securities issued by U.S.
government agencies (such as the Federal Farm Credit Bank and the Federal Home
Loan Bank). Some agency notes are backed by the full faith and credit of the
U.S. government, while most are guaranteed only by the issuing agency. These
notes are issued with maturities ranging from three months to 30 years.

* U.S. GOVERNMENT AGENCY DISCOUNT NOTES--short-term debt securities issued by
U.S. government agencies (such as the Federal Farm Credit Bank and the Federal
Home Loan Bank). Some agency discount notes are backed by the full faith and
credit of the U.S. government, while most are guaranteed only by the issuing
agency. These notes are issued at a discount and achieve full value at maturity
(typically one year or less).

* U.S. TREASURY BILLS (T-BILLS)--short-term debt securities issued by the U.S.
Treasury and backed by the direct "full faith and credit" pledge of the U.S.
government. T-bills are issued with maturities ranging from three months to one
year.

* U.S. TREASURY NOTES (T-NOTES)--intermediate-term debt securities issued by the
U.S. Treasury and backed by the direct "full faith and credit" pledge of the
U.S. government. T-notes are issued with maturities ranging from two to 10
years.

SEMIANNUAL REPORT GLOSSARY 25

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

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

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

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: www.americancentury.com

AMERICAN CENTURY GOVERNMENT INCOME TRUST

INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI

THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.

AMERICAN CENTURY INVESTMENT SERVICES, INC.

9711 [recycled logo]
SH-BKT-10279 Recycled
<PAGE>
[BOOK TWO]

SEMIANNUAL
REPORT

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

SEPTEMBER 30, 1997

BENHAM
GROUP

Short-Term Treasury
Intermediate-Term Treasury
Long-Term Treasury

TABLE OF CONTENTS

Report Highlights .......................................................... 1
Our Message to You ......................................................... 2
Market Perspective ......................................................... 3
Short-Term Treasury
Performance & Portfolio Information ............................. 4
Management Q & A ................................................ 5
Schedule of Investments ......................................... 8
Financial Highlights ............................................ 25
Intermediate-Term Treasury
Performance & Portfolio Information ............................. 9
Management Q & A ................................................ 10
Schedule of Investments ......................................... 13
Financial Highlights ............................................ 26
Long-Term Treasury
Performance & Portfolio Information ............................. 14
Management Q & A ................................................ 15
Schedule of Investments ......................................... 18
Financial Highlights ............................................ 27
Statements of Assets and Liabilities ....................................... 19
Statements of Operations ................................................... 20
Statements of Changes in Net Assets ........................................ 21
Notes to Financial Statements .............................................. 22
Proxy Voting Results ....................................................... 28
Retirement Account Information ............................................. 30
Background Information
Investment Philosophy & Policies ................................ 32
Comparative Indices ............................................. 32
Lipper Rankings ................................................. 32
Investment Team Leaders ......................................... 32
Glossary ................................................................... 33

WE WELCOME YOUR COMMENTS OR QUESTIONS ABOUT THIS REPORT.
SEE THE BACK COVER FOR WAYS TO CONTACT US BY MAIL, PHONE OR E-MAIL.

Twentieth Century and American Century are registered marks of American Century
Services Corporation. Benham Group is a registered mark of Benham Management
Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

MARKET PERSPECTIVE

* U.S. Treasury securities produced strong returns during the six months
ended September 30, 1997.

* Treasury yields declined steadily throughout the six-month period as
inflation remained low.

* Treasury securities benefited from shrinking federal budget deficits and
increased demand.

* Increased issuance and reduced demand caused U.S. government agency
securities to underperform Treasury securities during the period.

SHORT-TERM TREASURY

* The fund's return trailed the average short Treasury fund for the six
months ended September 30, 1997.

* The fund's more conservative positioning and emphasis on callable
government agency securities led to its underperformance.

* We increased the fund's percentage of government agency securities to take
advantage of attractive relative values and higher yields.

* Going forward, we plan to keep the fund cautiously positioned because of
the uncertain outlook for short-term interest rates.

* We've reduced the fund's holdings of agency securities since the end of
the period.

INTERMEDIATE-TERM TREASURY

* The fund outperformed the average intermediate Treasury fund for the six
months ended September 30, 1997.

* We made few changes to the fund's portfolio during the period, except for
temporary investments in zero-coupon and inflation-indexed Treasury bonds

* Merging with the Benham Intermediate-Term Government fund had no effect on
the fund's performance.

* Going forward, we plan to maintain the fund's neutral positioning until we
see a clearer direction for interest rates.

* We've added some five-year inflation-indexed bonds and seven-year
government agency securities to the fund's portfolio since the end of the
period because of their attractive yields relative to Treasury securities.

LONG-TERM TREASURY

* The fund outperformed the average general Treasury fund for the six months
ended September 30, 1997.

* The fund's longer duration compared with most general Treasury funds
helped it outperform its peers.

* We made timely adjustments to the fund's duration to take advantage of
interest rate changes.

* Going forward, we plan to maintain the fund's current positioning, though
we will shorten its duration if long-term interest rates approach 6%.

SHORT-TERM TREASURY

TOTAL RETURNS: AS OF 9/30/97
6 Months 3.84%*
1 Year 6.26%

NET ASSETS: $38.0 million
(AS OF 9/30/97)

INCEPTION DATE: 9/8/92

TICKER SYMBOL: BSTAX

INTERMEDIATE TREASURY

TOTAL RETURNS: AS OF 9/30/97
6 Months 6.51%*
1 Year 8.22%

NET ASSETS: $354.0 million
(AS OF 9/30/97)

INCEPTION DATE: 5/16/80

TICKER SYMBOL: CPTNX

LONG-TERM TREASURY

TOTAL RETURNS: AS OF 9/30/97
6 Months 11.56%*
1 Year 13.08%

NET ASSETS: $127.9 million
(AS OF 9/30/97)

INCEPTION DATE: 9/8/92

TICKER SYMBOL: BLAGX

* Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
33.

SEMIANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

During the six months ended September 30, 1997, U.S. Treasury securities
posted healthy gains as interest rates fell, inflation concerns waned and demand
for Treasury securities outpaced supply. In the following pages, the fund's
investment team provides further details about the market and how your fund was
managed during the period.

Within the framework of this proposed relationship, American Century will
continue to operate as an independent company. No changes in your fund's
investment managers, policies or fees are anticipated as a result of this
transaction. American Century's corporate management team will remain the same,
and the Stowers family will retain voting control of the company.

In closing, we want to reassure you that American Century remains committed
to serving your investment needs first and foremost. Thank you for your trust
and confidence.

/s/James E. Stowers III /s/James M. Benham
James E. Stowers III James M. Benham
Chief Executive Officer Vice Chairman
American Century Companies, Inc. American Century Companies, Inc.

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE

[line graph - data below]

Treasury Yield Curves

Years to Maturity 3/31/97 9/30/97
1 5.990% 5.4300%
2 6.410% 5.7700%
3 6.560% 5.8400%
4 6.650% 5.9400%
5 6.740% 5.9800%
6 6.795% 6.0300%
7 6.850% 6.0800%
8 6.867% 6.0870%
9 6.883% 6.0930%
10 6.900% 6.1000%
11 6.930% 6.1358%
12 6.960% 6.1716%
13 6.990% 6.2074%
14 7.020% 6.2432%
15 7.050% 6.2790%
16 7.080% 6.3152%
17 7.110% 6.3514%
18 7.140% 6.3876%
19 7.170% 6.4238%
20 7.200% 6.4600%
21 7.189% 6.4540%
22 7.178% 6.4480%
23 7.167% 6.4420%
24 7.156% 6.4360%
25 7.145% 6.4300%
26 7.134% 6.4240%
27 7.123% 6.4180%
28 7.112% 6.4120%
29 7.101% 6.4060%
30 7.090% 6.4000%

Source: Bloomberg Financial Markets

STRONG TREASURY BOND RETURNS

U.S. Treasury securities produced favorable returns during the six months
ended September 30, 1997. Yields fell substantially across the maturity spectrum
(see the accompanying graph), causing the prices of Treasury securities to rise.
Long-term securities, which typically benefit the most from falling interest
rates, performed better than shorter-term securities. For example, the 30-year
Treasury bond returned 12.90% during the six-month period, while the two-year
Treasury note posted a 4.36% return.

UNEXPECTEDLY LOW INFLATION

Treasury yields rose early in the period, continuing a trend that began in
early 1997. The U.S. economy grew at a 5% annual rate in the first quarter of
the year, and this strong growth led to fears of rising inflation. To head off
the perceived threat of inflation, the Federal Reserve raised short-term
interest rates in March. Rising Treasury yields in April reflected market
expectations for more Fed rate increases in 1997.

Economic growth slowed during the summer, though it remained at a level that
has historically been accompanied by rising prices. But the expected inflation
never materialized--the consumer price index rose at an annual rate of just 1.8%
during the six-month period. As a result, expectations for future Fed rate
increases disappeared from the bond market, and Treasury yields declined
steadily after peaking in mid-April.

POSITIVE SUPPLY AND DEMAND FACTORS

Treasury bonds also benefited from prevailing supply and demand conditions.
Shrinking federal budget deficits led to smaller auctions of Treasury
securities, reducing the amount of new supply. The Treasury also discontinued
two auctions of 10-year notes, dropping the number of auctions from six per year
to four.

On the demand side, equity investors looked to the Treasury market for a
"safe haven" from increased stock market volatility late in the period. In
addition, foreign investors were attracted to Treasury securities because of
their relatively high interest rates. Japan's interest rates remained at
historical lows, while rates fell in Europe and parts of Asia.

GOVERNMENT AGENCY SECURITIES

U.S. government agency securities underperformed Treasury securities during
the six-month period. As a result, the yield difference--or spread--between
agency and Treasury securities with comparable maturities widened back out to
historically normal levels after narrowing steadily over the past two years.

Supply and demand factors, as well as a general increase in market
volatility, contributed to the widening yield spreads. Agency yields got a boost
from increased issuance--through the first nine months of 1997, new issuance of
government agency securities was up 22% compared to the same period in 1996. In
particular, a substantial amount of new supply was issued in September.

SEMIANNUAL REPORT MARKET PERSPECTIVE 3

<TABLE>
<CAPTION>
SHORT-TERM TREASURY

AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS 5 YEARS LIFE OF
FUND(1)
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS
OF SEPTEMBER 30, 1997

<S> <C> <C> <C> <C> <C>
Short-Term Treasury ............. 3.84% 6.26% 6.10% 4.73% 4.74%

Lehman 1- to 3-Year
Government
Securities Index ................ 4.23% 6.89% 6.91% 5.34% --(2)

Average Short U.S.
Treasury Fund(3) ................ 4.29% 6.40% 6.44% 4.84% --(2)

Fund's Ranking Among
Short U.S. Treasury Funds(3) .... -- 10 out of 23 13 out of 18 6 out of 8 --(2)
</TABLE>
- ----------
(1) INCEPTION DATE WAS SEPTEMBER 8, 1992.

(2) FIVE-YEAR DATA ARE THE MOST RECENT RETURN DATA AVAILABLE.

(3) ACCORDING TO LIPPER ANALYTICAL SERVICES.

See pages 32-33 for more information about returns, the comparative index and
Lipper fund rankings.

[mountain graph - data below]

Growth of $10,000 Over Life of Fund
$10,000 investment made 9/30/92 Value on 9/30/97

Short-Term Lehman 1- to 3-Year
Treasury Govt. Index

Sep-92 $10,000 $10,000
Oct-92 $9,930 $9,943
Nov-92 $9,895 $9,928
Dec-92 $9,955 $10,021
Jan-93 $10,072 $10,126
Feb-93 $10,168 $10,206
Mar-93 $10,209 $10,238
Apr-93 $10,274 $10,300
May-93 $10,242 $10,275
Jun-93 $10,317 $10,352
Jul-93 $10,326 $10,374
Aug-93 $10,410 $10,460
Sep-93 $10,440 $10,494
Oct-93 $10,447 $10,517
Nov-93 $10,446 $10,519
Dec-93 $10,485 $10,561
Jan-94 $10,547 $10,626
Feb-94 $10,481 $10,561
Mar-94 $10,429 $10,508
Apr-94 $10,386 $10,468
May-94 $10,406 $10,482
Jun-94 $10,427 $10,509
Jul-94 $10,510 $10,603
Aug-94 $10,534 $10,638
Sep-94 $10,513 $10,614
Oct-94 $10,535 $10,638
Nov-94 $10,485 $10,593
Dec-94 $10,501 $10,614
Jan-95 $10,631 $10,758
Feb-95 $10,777 $10,904
Mar-95 $10,831 $10,965
Apr-95 $10,913 $11,063
May-95 $11,081 $11,252
Jun-95 $11,144 $11,313
Jul-95 $11,176 $11,358
Aug-95 $11,240 $11,426
Sep-95 $11,291 $11,482
Oct-95 $11,379 $11,577
Nov-95 $11,463 $11,676
Dec-95 $11,544 $11,763
Jan-96 $11,620 $11,863
Feb-96 $11,583 $11,817
Mar-96 $11,557 $11,809
Apr-96 $11,559 $11,821
May-96 $11,573 $11,847
Jun-96 $11,643 $11,933
Jul-96 $11,687 $11,980
Aug-96 $11,702 $12,024
Sep-96 $11,816 $12,133
Oct-96 $11,942 $12,271
Nov-96 $12,044 $12,361
Dec-96 $12,020 $12,364
Jan-97 $12,074 $12,423
Feb-97 $12,098 $12,453
Mar-97 $12,091 $12,443
Apr-97 $12,183 $12,545
May-97 $12,252 $12,633
Jun-97 $12,333 $12,720
Jul-97 $12,452 $12,862
Aug-97 $12,460 $12,871
Sep-97 $12,600 $12,969

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost. The graph begins on 9/30/92, the date nearest the fund's 9/8/92
inception date for which index return data are available.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the index's
total return line does not.

PORTFOLIO AT A GLANCE

9/30/97 3/31/97
Number of Securities 19 15
Weighted Average Maturity 2.0 years 1.9 years
Average Duration 1.5 years 1.7 years
Expense Ratio 0.58%* 0.61%

* Annualized.

YIELD AS OF SEPTEMBER 30, 1997
30-DAY
SEC
YIELD
Short-Term Treasury 5.42%

Yield is defined in the Glossary on page 33.

4 SHORT-TERM TREASURY AMERICAN CENTURY INVESTMENTS

SHORT-TERM TREASURY

MANAGEMENT Q & A

An interview with Bob Gahagan, a portfolio manager on the Benham Treasury
funds investment team.

HOW DID THE FUND PERFORM?

The fund's return reflected favorable bond market conditions, but it trailed
the average short Treasury fund. For the six months ended September 30, 1997,
the fund posted a total return of 3.84%, compared with the 4.29% average return
of the 28 "Short U.S. Treasury Funds" tracked by Lipper Analytical Services.
(See the Total Returns table on the previous page for other fund performance
comparisons.)

WHY DID THE FUND UNDERPERFORM THE AVERAGE SHORT TREASURY FUND?

The fund is positioned more conservatively than many funds in its Lipper
category. Its average maturity and duration tend to be shorter than the average
short Treasury fund. As a result, the fund is typically less sensitive to
interest rate changes.

This was a positive factor in late 1996 and early 1997, when rising interest
rates caused bond prices to fall. But in the most recent six-month period, the
fund's more defensive position limited its price gains as interest rates fell.

[bar graph - data below]

SHORT-TERM TREASURY'S ONE-YEAR RETURNS SINCE INCEPTION
(Periods ended Semptember 30)
Short-Term Lehman 1- to 3-Year
Treasury Govt. Index
9/93 4.77% 4.94%
9/94 0.69% 1.14%
9/95 7.40% 8.18%
9/96 4.65% 5.67%
9/97 6.26% 6.89%

This graph illustrates the fund's returns since its inception and compares them
with the index's returns. The fund's total returns include operating expenses,
while the index's do not. See page 32 for a definition of the index.

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

SEMIANNUAL REPORT SHORT-TERM TREASURY 5

SHORT-TERM TREASURY

HOW DID THE FUND'S GOVERNMENT AGENCY HOLDINGS AFFECT ITS PERFORMANCE?

The fund's agency securities also contributed to its underperformance
compared with the Lipper group average. Because of our expectation for stable or
slightly rising short-term interest rates, we held primarily callable agency
securities, which tend to perform best in this environment. However, declining
interest rates caused these securities to underperform both Treasury and
non-callable agency securities during the period.

WHY DO CALLABLE SECURITIES UNDERPERFORM WHEN INTEREST RATES FALL?

It's mainly the call feature, which gives the issuer the opportunity to pay
off the securities at a prearranged date before maturity. Government agencies
will usually exercise this call option when interest rates are declining because
they can issue new, lower-yielding securities to replace the existing callable
securities.

As a result, the bond market tends to price callable agency securities based
on their call date when interest rates fall. This effectively shortens the
maturity of these securities, making them less sensitive to interest rates. In
contrast, non-callable securities continue to trade based on their original
maturity date and maintain the same interest rate sensitivity when interest
rates decline.

WHY DID YOU INCREASE THE FUND'S PERCENTAGE OF AGENCY SECURITIES OVER THE PAST
SIX MONTHS?

As yield spreads between Treasury and agency securities fluctuated
throughout the period, we took advantage of opportunities where agency
securities offered better relative value and higher yields. When spreads
widened, we found several agency securities that we felt were more attractively
valued than Treasury securities. The best opportunities occurred around
quarter-end periods in late June and late September, when a substantial amount
of new issuance pushed Treasury/agency spreads to their widest levels of the
period.

DO YOU PLAN TO EXPAND THE FUND'S AGENCY POSITION GOING FORWARD?

No. We typically keep the fund's agency allocation in a range of 15-35% of
its portfolio. In fact, since the end of September, we've reduced its agency
holdings to about 25% of fund assets.

LOOKING AHEAD, WHAT IS YOUR OUTLOOK FOR THE BOND MARKET OVER THE NEXT SIX
MONTHS?

We're seeing contradictory economic evidence, so the outlook is somewhat
uncertain. U.S. economic growth has slowed, but employment growth and consumer
confidence remain strong. We've seen little sign of inflation in the six months
since the Federal Reserve raised short-term

[pie charts]

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 9/30/97)
Treasury Notes 60%
Agency Notes 40%

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 3/31/97)
Treasury Notes 80%
Agency Notes 20%

6 SHORT-TERM TREASURY AMERICAN CENTURY INVESTMENTS

SHORT-TERM TREASURY

interest rates, but wage pressures have begun to build below the surface. The
Fed appears poised to raise rates again, but it will likely need to see solid
evidence of rising inflation before doing so.

Despite these paradoxical conditions, short-term bond yields are at the
lower end of their recent range, suggesting that the market has not priced in
the possibility of a Fed rate increase in the near future. At 5.75%, the
two-year Treasury note yield is only 25 basis points higher than the federal
funds rate target (the overnight rate that the Fed adjusts).

Given that the spread between the two-year Treasury yield and the fed funds
rate target has historically been 50-75 basis points, we could see short-term
yields rise at the first sign of higher inflation. In addition, continued strong
economic growth could cause short-term yields to climb as the market prices in
expectations of a Fed rate hike.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX
MONTHS?

We plan to maintain the fund's cautious positioning, keeping its average
maturity and duration slightly shorter than neutral. This should limit any price
depreciation resulting from rising yields. Although we've recently cut back on
the fund's position in government agency securities, we'll continue to monitor
the agency market, looking for opportunities to enhance the fund's yield.

[pie charts]

COMPOSITION OF AGENCY HOLDINGS (as of 9/30/97)
Federal Home Loan Bank 46%
Federal Farm Credit Bank 26%
Student Loan Marketing Association 23%
Other 5%

COMPOSITION OF AGENCY HOLDINGS (as of 3/31/97)
Federal Home Loan Bank 61%
Student Loan Marketing Association 21%
Federal Farm Credit Bank 18%

SEMIANNUAL REPORT SHORT-TERM TREASURY 7

SCHEDULE OF INVESTMENTS
SHORT-TERM TREASURY

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- --------------------------------------------------------------------------------

U.S. TREASURY SECURITIES

$1,200,000 U.S. Treasury Notes, 5.875%,
10/31/98 $ 1,202,250

3,650,000 U.S. Treasury Notes, 5.50%,
11/15/98 3,642,014

2,200,000 U.S. Treasury Notes, 5.875%,
1/31/99 2,204,125

2,615,000 U.S. Treasury Notes, 5.00%,
2/15/99 2,589,666

1,000,000 U.S. Treasury Notes, 6.25%,
3/31/99 1,007,187

6,160,000 U.S. Treasury Notes, 6.375%,
4/30/99 6,217,750

805,000 U.S. Treasury Notes, 6.75%,
5/31/99 817,075

4,250,000 U.S. Treasury Notes, 5.625%,
2/28/01 4,211,482

750,000 U.S. Treasury STRIPS, 6.03%,
5/15/99(1) 683,941
---------------

TOTAL U.S. TREASURY SECURITIES--59.7% 22,575,490
---------------
(Cost $22,503,035)

U.S. GOVERNMENT AGENCY SECURITIES

1,250,000 FFCB, 5.875%, 1/22/99 1,249,273

2,500,000 FFCB, 6.21%, 12/4/00 2,510,017

2,200,000 FHLB, 5.72%, 7/7/98 2,200,788

1,500,000 FHLB, 5.76%, 7/8/98 1,500,971

1,000,000 FHLB, 6.01%, 2/14/01 993,087

2,000,000 FHLB, 6.00%, 3/12/01 1,985,314

900,000 FICO STRIPS, 6.04%, 9/26/99(1) 801,605

1,200,000 SLMA, 5.81%, 1/23/01 1,186,574

2,265,000 SLMA, 5.88%, 2/6/01 2,244,212
---------------

TOTAL U.S. GOVERNMENT
AGENCY SECURITIES--38.8% 14,671,841
---------------
(Cost $14,583,145)

TEMPORARY CASH INVESTMENTS--1.5%

570,000 FHLMC Discount Note, 6.05%,
10/1/97(2) 570,000
---------------
(Cost $570,000)

TOTAL INVESTMENT SECURITIES--100.0% $37,817,331
===============
(Cost $37,656,180)

NOTES TO SCHEDULE OF INVESTMENTS

FFCB = FEDERAL FARM CREDIT BANK

FHLB = FEDERAL HOME LOAN BANK

FHLMC = FEDERAL HOME LOAN MORTGAGE CORPORATION

FICO = FINANCING CORPORATION

SLMA = STUDENT LOAN MARKETING ASSOCIATION

STRIPS = SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL OF SECURITIES

(1) THESE SECURITIES ARE ZERO-COUPON BONDS. THE EFFECTIVE YIELD AT PURCHASE IS
INDICATED. THESE SECURITIES ARE PURCHASED AT A SUBSTANTIAL DISCOUNT FROM
THEIR VALUE AT MATURITY.

(2) THE YIELD TO MATURITY AT PURCHASE IS INDICATED.

SEE NOTES TO FINANCIAL STATEMENTS

8 SHORT-TERM TREASURY AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
INTERMEDIATE-TERM TREASURY

AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS 5 YEARS 10
YEARS
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS
OF SEPTEMBER 30, 1997

<S> <C> <C> <C> <C> <C>
Intermediate-Term Treasury ...... 6.51% 8.22% 7.53% 5.51% 8.05%

Merrill Lynch 1- to
10-Year Treasury Index .......... 5.41% 7.82% 7.81% 5.85% 8.35%

Average Intermediate
U.S. Treasury Fund(1) ........... 6.30% 7.75% 7.83% 5.56% 8.24%

Fund's Ranking Among
Intermediate U.S.
Treasury Funds(1) ............... -- 5 out of 14 5 out of 8 3 out of 6 2 out of 2
</TABLE>
- ----------
(1) ACCORDING TO LIPPER ANALYTICAL SERVICES.

See pages 32-33 for more information about returns, the comparative index and
Lipper fund rankings.

[mountain graph - data below]

Growth of $10,000 Over Ten Years

$10,000 investment made 9/30/87 Value on 9/30/97

Intermediate-Term Merrill Lynch 1- to 10-Year
Treasury Treasury Index

Sep-87 $10,000 $10,000
Oct-87 $10,422 $10,315
Nov-87 $10,440 $10,372
Dec-87 $10,576 $10,469
Jan-88 $10,962 $10,733
Feb-88 $11,094 $10,845
Mar-88 $10,923 $10,798
Apr-88 $10,856 $10,784
May-88 $10,773 $10,724
Jun-88 $10,982 $10,899
Jul-88 $10,914 $10,872
Aug-88 $10,911 $10,880
Sep-88 $11,113 $11,069
Oct-88 $11,273 $11,220
Nov-88 $11,139 $11,122
Dec-88 $11,131 $11,132
Jan-89 $11,242 $11,242
Feb-89 $11,173 $11,195
Mar-89 $11,227 $11,251
Apr-89 $11,414 $11,458
May-89 $11,663 $11,700
Jun-89 $11,976 $11,998
Jul-89 $12,233 $12,243
Aug-89 $12,023 $12,072
Sep-89 $12,071 $12,133
Oct-89 $12,321 $12,382
Nov-89 $12,422 $12,503
Dec-89 $12,459 $12,535
Jan-90 $12,382 $12,463
Feb-90 $12,417 $12,495
Mar-90 $12,419 $12,519
Apr-90 $12,361 $12,476
May-90 $12,632 $12,739
Jun-90 $12,798 $12,905
Jul-90 $12,985 $13,090
Aug-90 $12,924 $13,033
Sep-90 $13,050 $13,152
Oct-90 $13,229 $13,336
Nov-90 $13,429 $13,534
Dec-90 $13,606 $13,726
Jan-91 $13,729 $13,865
Feb-91 $13,791 $13,938
Mar-91 $13,858 $14,014
Apr-91 $14,002 $14,159
May-91 $14,075 $14,239
Jun-91 $14,071 $14,254
Jul-91 $14,218 $14,408
Aug-91 $14,507 $14,677
Sep-91 $14,743 $14,926
Oct-91 $14,923 $15,095
Nov-91 $15,097 $15,272
Dec-91 $15,476 $15,645
Jan-92 $15,298 $15,488
Feb-92 $15,326 $15,546
Mar-92 $15,233 $15,483
Apr-92 $15,395 $15,624
May-92 $15,627 $15,847
Jun-92 $15,853 $16,077
Jul-92 $16,162 $16,375
Aug-92 $16,336 $16,564
Sep-92 $16,582 $16,793
Oct-92 $16,365 $16,587
Nov-92 $16,269 $16,513
Dec-92 $16,491 $16,731
Jan-93 $16,808 $17,044
Feb-93 $17,045 $17,299
Mar-93 $17,117 $17,364
Apr-93 $17,245 $17,501
May-93 $17,178 $17,449
Jun-93 $17,444 $17,704
Jul-93 $17,460 $17,740
Aug-93 $17,724 $18,011
Sep-93 $17,788 $18,089
Oct-93 $17,816 $18,121
Nov-93 $17,720 $18,034
Dec-93 $17,796 $18,104
Jan-94 $17,980 $18,284
Feb-94 $17,701 $18,024
Mar-94 $17,433 $17,772
Apr-94 $17,295 $17,652
May-94 $17,302 $17,670
Jun-94 $17,303 $17,682
Jul-94 $17,511 $17,902
Aug-94 $17,575 $17,958
Sep-94 $17,440 $17,813
Oct-94 $17,432 $17,818
Nov-94 $17,334 $17,728
Dec-94 $17,379 $17,796
Jan-95 $17,644 $18,091
Feb-95 $17,958 $18,437
Mar-95 $18,049 $18,538
Apr-95 $18,242 $18,751
May-95 $18,722 $19,287
Jun-95 $18,846 $19,413
Jul-95 $18,844 $19,426
Aug-95 $19,011 $19,585
Sep-95 $19,117 $19,717
Oct-95 $19,342 $19,938
Nov-95 $19,562 $20,187
Dec-95 $19,760 $20,393
Jan-96 $19,912 $20,568
Feb-96 $19,693 $20,337
Mar-96 $19,569 $20,240
Apr-96 $19,509 $20,176
May-96 $19,485 $20,165
Jun-96 $19,704 $20,362
Jul-96 $19,768 $20,425
Aug-96 $19,706 $20,447
Sep-96 $20,039 $20,707
Oct-96 $20,472 $21,044
Nov-96 $20,785 $21,302
Dec-96 $20,569 $21,187
Jan-97 $20,590 $21,266
Feb-97 $20,621 $21,290
Mar-97 $20,363 $21,180
Apr-97 $20,668 $21,417
May-97 $20,854 $21,582
Jun-97 $21,057 $21,768
Jul-97 $21,587 $22,177
Aug-97 $21,382 $22,083
Sep-97 $21,687 $22,321

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the index's
total return line does not.

PORTFOLIO AT A GLANCE
9/30/97 3/31/97
Number of Securities 15 13
Weighted Average Maturity 5.7 years 5.8 years
Average Duration 4.4 years 4.4 years
Expense Ratio 0.51%* 0.51%

* Annualized.

YIELD AS OF SEPTEMBER 30, 1997
30-DAY
SEC
YIELD
Intermediate-Term Treasury 5.67%

Yield is defined in the Glossary on page 33.

SEMIANNUAL REPORT INTERMEDIATE-TERM TREASURY 9

INTERMEDIATE-TERM TREASURY

MANAGEMENT Q & A

An interview with Dave Schroeder, a portfolio manager on the Benham Treasury
funds investment team.

HOW DID THE FUND PERFORM?

The fund's return reflected favorable bond market conditions, and it beat
the average intermediate Treasury fund. For the six months ended September 30,
1997, the fund had a total return of 6.51%, compared with the 6.30% average
return of the 14 "Intermediate U.S. Treasury Funds" tracked by Lipper Analytical
Services. (See the Total Returns table on the previous page for other fund
performance comparisons.)

HOW WAS THE FUND POSITIONED DURING THE SIX-MONTH PERIOD?

We maintained a fairly neutral average maturity and duration, and the fund's
portfolio didn't change much during the period. We made a few temporary
adjustments in response to changing market conditions, primarily by investing in
other types of Treasury securities, including zero-coupon bonds and
inflation-indexed securities.

LET'S START WITH THE ZERO-COUPON BONDS. WHY DID YOU INVEST IN THESE SECURITIES?

We used zero-coupon bonds to take maximum advantage of prevailing market
conditions. In April, the difference between two-year Treasury yields and

[bar graph - data below]

INTERMEDIATE-TERM TREASURY'S ONE-YEAR RETURNS FOR THE PAST TEN YEARS
(Periods ended September 30)

Intermediate-Term Merrill Lynch 1- to 10-Year
Treasury Treasury Index
9/88 11.15% 10.69%
9/89 8.63% 9.61%
9/90 8.11% 8.40%
9/91 12.97% 13.49%
9/92 12.48% 12.51%
9/93 7.26% 7.69%
9/94 -1.96% -1.53%
9/95 9.62% 10.69%
9/96 4.82% 5.02%
9/97 8.22% 7.82%

This graph illustrates the fund's returns over the past 10 years and compares
them with the index's returns. The fund's total returns include operating
expenses, while the index's do not. See page 32 for a definition of the index.

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

10 INTERMEDIATE-TERM TREASURY AMERICAN CENTURY INVESTMENTS

INTERMEDIATE-TERM TREASURY

ten-year Treasury yields was narrower than normal. We expected this situation to
change, so we structured the fund's portfolio to benefit if this yield spread
widened.

The best way to do this was to concentrate the fund's portfolio in bonds
with maturities at or around six years, the midpoint between two and ten years.
The fund's average maturity typically hovers around six years anyway, so this
wasn't a dramatic change. As part of this "bullet" structure, we purchased some
six-year zero-coupon Treasury bonds.

Zero-coupon bonds tend to have slightly higher yields than normal
fixed-coupon bonds with the same maturity, enhancing the returns earned from
this strategy.

HOW LONG DID THE FUND OWN THESE SECURITIES?

Less than a month, because our strategy was successful--the gap between
two-year and ten-year Treasury yields widened in early May. We unraveled the
fund's bullet structure and sold the zero-coupon bonds.

WHAT ABOUT THE FUND'S INFLATION-INDEXED TREASURY SECURITIES?

We shifted about 10% of the fund's portfolio into 10-year inflation-indexed
Treasury bonds in late May and early June because we felt they were attractively
valued compared with nominal (i.e., normal fixed-coupon) Treasury securities.
Our gauge of relative value was the yield difference--or spread--between 10-year
Treasury notes and 10-year inflation-indexed Treasury securities.

This yield spread reflects the market's expectations for inflation going
forward. In May, the spread dipped below 3%, which we felt was quite narrow
considering the 4% long-term average for inflation. We expected
inflation-indexed Treasury bonds to outperform nominal Treasury bonds as this
spread widened back out.

But as inflation remained low, the spread actually narrowed further--nominal
Treasury yields continued to fall through July, while inflation-indexed bond
yields held steady. As a result, the fund missed out on some price appreciation
by not holding nominal Treasury bonds.

After falling as low as 2.5%, the yield spread widened out to 2.8% briefly
in August, so we sold the fund's inflation-indexed securities at that time.

AT THE END OF AUGUST, THE BENHAM INTERMEDIATE-TERM GOVERNMENT FUND MERGED INTO
THE INTERMEDIATE-TERM TREASURY FUND. DID THIS MERGER HAVE ANY IMPACT ON THE FUND
OR ITS PERFORMANCE?

Not really. In the weeks prior to the merger, we gradually shifted the
Intermediate-Term Government fund's portfolio to look more like the
Intermediate-Term Treasury fund. This approach made it very easy to merge the
two portfolios into a single fund.

[pie charts]

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 9/30/97)
Treasury Notes 78%
Treasury Bonds 22%

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 3/31/97)
Treasury Notes 81%
Treasury Bonds 19%

SEMIANNUAL REPORT INTERMEDIATE-TERM TREASURY 11

INTERMEDIATE-TERM TREASURY

LOOKING AHEAD, WHAT IS YOUR OUTLOOK FOR THE BOND MARKET OVER THE NEXT SIX
MONTHS?

We're still in a contradictory environment of strong economic growth and low
inflation. These two conditions can't co-exist for long--something will have to
give. But until this situation is resolved, the outlook for bond yields is
uncertain.

Over the past year, the five-year Treasury note yield has hovered in a range
of 5.8%-6.8%, and it's currently at the low end of this range. If inflation news
continues to be favorable, the five-year Treasury yield could fall as low as
5.5%. While that scenario is unlikely, we don't foresee a dramatic rise in
yields, either.

We expect the five-year Treasury yield to remain in the lower half of its
recent range until a clearer direction for the U.S. economy emerges.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX
MONTHS?

We plan to maintain the fund's neutral positioning, with an average maturity
around six years. We'll also continue to make minor adjustments to the fund's
portfolio to take advantage of market opportunities.

For example, since the end of September, we've added some five-year
inflation-indexed Treasury securities to the fund's portfolio. With five-year
Treasury yields at 5.8% and five-year inflation-indexed yields at 3.6%, the
market is expecting five-year inflation to be 2.2%--the lowest level for implied
inflation since the Treasury first issued inflation-indexed securities in
January. The best inflationary conditions are probably behind us, so we think
inflation-indexed securities offer attractive value relative to nominal Treasury
bonds.

Another advantage of these securities is the November inflation adjustment,
which will be a sizable 0.24%--equivalent to a 3% annual rate. Combined with an
interest rate of 3.6%, this gives five-year inflation-indexed notes a yield of
6.6%, which is much more attractive than the 5.8% yield of a nominal five-year
Treasury note.

THE FUND CONTINUES TO HOLD TREASURY SECURITIES EXCLUSIVELY. DO YOU PLAN TO ADD
ANY GOVERNMENT AGENCY SECURITIES TO THE FUND'S PORTFOLIO IN THE FUTURE?

Yes. In October, we purchased some government agency securities maturing in
seven years. We've been avoiding intermediate-term agency securities because
they haven't offered much extra yield, but the agency securities we recently
bought had yields that were 26 basis points higher than seven-year Treasury
yields.

[pie charts]

PORTFOLIO COMPOSITION BY MATURITY (as of 9/30/97)
3-5 Years 56%
5-7 Years 10%
7-10 Years 25%
10-20 Years 9%

PORTFOLIO COMPOSITION BY MATURITY (as of 3/31/97)
0-3 Years 4%
3-5 Years 58%
5-7 Years 8%
7-10 Years 24%
10-20 Years 6%

12 INTERMEDIATE-TERM TREASURY AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS
INTERMEDIATE-TERM TREASURY

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- --------------------------------------------------------------------------------

U.S. TREASURY SECURITIES

$36,700,000 U.S. Treasury Notes, 5.50%,
12/31/00 $ 36,252,701

32,000,000 U.S. Treasury Notes, 6.375%,
3/31/01 32,429,984

27,500,000 U.S. Treasury Notes, 6.625%,
7/31/01 28,118,750

24,600,000 U.S. Treasury Notes, 7.875%,
8/15/01 26,199,000

29,000,000 U.S. Treasury Notes, 6.375%,
9/30/01 29,416,875

12,500,000 U.S. Treasury Notes, 6.25%,
10/31/01 12,625,000

30,000,000 U.S. Treasury Notes, 6.25%,
6/30/02 30,290,610

33,200,000 U.S. Treasury Notes, 5.75%,
8/15/03 32,702,000

15,000,000 U.S. Treasury Notes, 6.50%,
8/15/05 15,328,125

23,000,000 U.S. Treasury Notes, 6.875%,
5/15/06 24,056,551

5,500,000 U.S. Treasury Notes, 6.50%,
10/15/06 5,618,591

14,800,000 U.S. Treasury Bonds, 11.625%,
11/15/04 19,434,250

17,300,000 U.S. Treasury Bonds, 12.00%,
5/15/05 23,371,211

22,500,000 U.S. Treasury Bonds, 12.00%,
8/15/13, Call Date 8/15/08 32,442,188
---------------

TOTAL U.S. TREASURY SECURITIES--99.8% 348,285,836
---------------
(Cost $342,235,606)

TEMPORARY CASH INVESTMENTS--0.2%

752,000 FHLMC Discount Note, 6.05%,
10/1/97(1) 752,000
---------------
(Cost $752,000)

TOTAL INVESTMENT SECURITIES--100.0% $349,037,836
===============
(Cost $342,987,606)

NOTES TO SCHEDULE OF INVESTMENTS

FHLMC = FEDERAL HOME LOAN MORTGAGE CORPORATION

(1) THE YIELD TO MATURITY AT PURCHASE IS INDICATED.

SEE NOTES TO FINANCIAL STATEMENTS

SEMIANNUAL REPORT INTERMEDIATE-TERM TREASURY 13

<TABLE>
<CAPTION>
LONG-TERM TREASURY

<S> <C> <C> <C> <C> <C>
Long-Term Treasury ............. 11.56% 13.08% 11.85% 8.24% 7.90%

Lehman Long-Term
Government Securities Index .... 11.67% 13.33% 12.62% 8.98% --(2)

Average General
U.S. Treasury Fund(3) .......... 8.13% 9.49% 9.68% 7.25% --(2)

Fund's Ranking Among
General U.S.
Treasury Funds(3) .............. -- 2 out of 19 3 out of 14 2 out of 10 --(2)
</TABLE>
- ----------
(1) INCEPTION DATE WAS SEPTEMBER 8, 1992.

(2) FIVE-YEAR DATA ARE THE MOST RECENT RETURN DATA AVAILABLE.

(3) ACCORDING TO LIPPER ANALYTICAL SERVICES.

See pages 32-33 for more information about returns, the comparative index and
Lipper fund rankings.

[mountain graph - data below]

Growth of $10,000 Over Life of Fund
$10,000 investment made 9/30/92 Value on 9/30/97

Long-Term Lehman Long-Term
Treasury Govt. Index

Sep-92 $10,000 $10,000
Oct-92 $9,774 $9,790
Nov-92 $9,854 $9,835
Dec-92 $10,110 $10,108
Jan-93 $10,385 $10,396
Feb-93 $10,773 $10,749
Mar-93 $10,767 $10,775
Apr-93 $10,828 $10,855
May-93 $10,852 $10,891
Jun-93 $11,320 $11,354
Jul-93 $11,538 $11,544
Aug-93 $12,080 $12,020
Sep-93 $12,114 $12,059
Oct-93 $12,221 $12,148
Nov-93 $11,877 $11,834
Dec-93 $11,893 $11,870
Jan-94 $12,182 $12,154
Feb-94 $11,604 $11,656
Mar-94 $11,075 $11,143
Apr-94 $10,894 $11,010
May-94 $10,789 $10,934
Jun-94 $10,692 $10,827
Jul-94 $11,013 $11,198
Aug-94 $10,970 $11,111
Sep-94 $10,618 $10,760
Oct-94 $10,584 $10,720
Nov-94 $10,645 $10,788
Dec-94 $10,793 $10,953
Jan-95 $11,046 $11,237
Feb-95 $11,342 $11,558
Mar-95 $11,434 $11,659
Apr-95 $11,621 $11,865
May-95 $12,479 $12,780
Jun-95 $12,633 $12,929
Jul-95 $12,404 $12,720
Aug-95 $12,665 $13,005
Sep-95 $12,908 $13,247
Oct-95 $13,260 $13,616
Nov-95 $13,586 $13,965
Dec-95 $13,950 $14,338
Jan-96 $13,927 $14,333
Feb-96 $13,244 $13,638
Mar-96 $12,973 $13,369
Apr-96 $12,735 $13,145
May-96 $12,697 $13,077
Jun-96 $12,951 $13,358
Jul-96 $12,959 $13,364
Aug-96 $12,793 $13,195
Sep-96 $13,139 $13,563
Oct-96 $13,667 $14,097
Nov-96 $14,125 $14,571
Dec-96 $13,762 $14,218
Jan-97 $13,664 $14,116
Feb-97 $13,672 $14,124
Mar-97 $13,319 $13,764
Apr-97 $13,622 $14,075
May-97 $13,782 $14,238
Jun-97 $14,042 $14,513
Jul-97 $14,856 $15,347
Aug-97 $14,479 $14,963
Sep-97 $14,856 $15,370

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the index's
total return line does not.

PORTFOLIO AT A GLANCE
9/30/97 3/31/97
Number of Securities 10 8
Weighted Average Maturity 21.0 years 20.9 years
Average Duration 10.6 years 10.1 years
Expense Ratio 0.57%* 0.60%

* Annualized.

YIELD AS OF SEPTEMBER 30, 1997
30-DAY
SEC
YIELD
Long-Term Treasury 6.04%

Yield is defined in the Glossary on page 33.

14 LONG-TERM TREASURY AMERICAN CENTURY INVESTMENTS

LONG-TERM TREASURY

MANAGEMENT Q & A

An interview with Dave Schroeder, a portfolio manager on the Benham Treasury
funds investment team.

HOW DID THE FUND PERFORM?

The fund's return reflected favorable bond market conditions, and it
outperformed the average Treasury fund by a wide margin. For the six months
ended September 30, 1997, the fund had a total return of 11.56%, compared with
the 8.13% average return of the 19 "General U.S. Treasury Funds" tracked by
Lipper Analytical Services. (See the Total Returns table on the previous page
for other fund performance comparisons.)

WHY DID THE FUND PERFORM SO WELL COMPARED WITH THE AVERAGE GENERAL TREASURY
FUND?

It's mainly the fund's longer duration (a measure of the fund's sensitivity
to changes in interest rates) relative to the other funds in its Lipper group.
The fund's duration of around 10 years is significantly longer than the 7-year
Lipper group average. Because of the fund's heightened interest rate
sensitivity, its returns tend to be toward the bottom of its category when bond
yields rise. But when yields fall--as they did during the past six months--the
fund tends to be one of the best performers.

[bar chart - data below]

LONG-TERM TREASURY'S ONE-YEAR RETURNS SINCE INCEPTION
(Periods ended September 30)
Long-Term Lehman Long-Term
Treasury Govt. Index
9/93 21.14% 20.59%
9/94 -12.35% -10.77%
9/95 21.57% 23.11%
9/96 1.78% 2.39%
9/97 13.08% 13.33%

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

SEMIANNUAL REPORT LONG-TERM TREASURY 15

LONG-TERM TREASURY

DID THE FUND'S DURATION CHANGE MUCH DURING THE PAST SIX MONTHS?

Yes. The fund's duration typically fluctuates between 9.7 years and 10.7
years, and we frequently make adjustments within this range as market conditions
change.

The fund began the period with a duration of 10.1 years, but we extended the
fund's duration in mid-April when the 30-year Treasury bond yield hit 7.2%
- --about as high as it's been in the last two years. We felt this was an
attractive yield, especially considering the prevailing low-inflation
environment. We sold the fund's shortest-term security and purchased a 30-year
Treasury bond to extend the fund's duration out to 10.6 years.

DID YOU MAINTAIN THIS POSITION FOR THE REST OF THE PERIOD?

Pretty much, except for a brief period in July and August, when we shortened
the fund's duration back to less than 10 years. The 30-year Treasury bond yield
had fallen to 6.3%, resulting in price gains of more than 10%. Since this yield
was close to the bottom of its range over the past year, we felt it was a good
time to lock in the price gains, so we sold the fund's 30-year bond.

Long-term yields rose to 6.7% in mid-August as the market absorbed some new
supply. We took advantage of this temporary yield increase to lengthen the fund'
s duration back out to around 10.5 years. We maintained this position through
the end of September, by which time the 30-year Treasury yield had fallen to
6.4%.

IN THE LAST REPORT, YOU MENTIONED THE POSSIBILITY OF ADDING ZERO-COUPON TREASURY
BONDS TO THE FUND'S PORTFOLIO. DID THE FUND INVEST IN THESE SECURITIES?

No. Early in the period, we were considering a strategy that would take
advantage of the unusually narrow gap between 10-year Treasury yields and
30-year Treasury yields. Zero-coupon bonds would have enhanced returns earned
from this approach. However, we ultimately decided against using this strategy.

DID THE FUND HOLD ANY GOVERNMENT AGENCY SECURITIES?

No. There has been virtually no new issuance from government agencies in the
longer maturities; most of their new issuance tends to mature in 10 years or
less. As a result, long-term agency yields have not been very attractive.
30-year

[pie charts]

PORTFOLIO COMPOSITION BY MATURITY (as of 9/30/97)
10-20 Years 40%
20-25 Years 35%
25-30 Years 25%

PORTFOLIO COMPOSITION BY MATURITY (as of 3/31/97)
10-20 Years 28%
20-25 Years 54%
25-30 Years 18%

16 LONG-TERM TREASURY AMERICAN CENTURY INVESTMENTS

LONG-TERM TREASURY

agency yields have been approximately 25-30 basis points higher than 30-year
Treasury yields. This yield spread is virtually the same as for
intermediate-term securities, so there is no advantage to buying long-term
agency securities.

LOOKING AHEAD, WHAT IS YOUR OUTLOOK FOR THE BOND MARKET OVER THE NEXT SIX
MONTHS?

Over the past year, the 30-year Treasury bond yield has hovered in a range
of 6.2%-7.2%, and it's currently at the low end of this range. If inflation news
continues to be favorable, the 30-year Treasury yield could fall as low as 6%.
While that scenario is unlikely, we don't foresee a dramatic rise in yields,
either.

We expect the 30-year Treasury yield to remain in the lower half of its
recent range until a clearer direction for the U.S. economy emerges.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX
MONTHS?

We plan to maintain the fund's current positioning, with a duration around
10.5 years. If long-term yields approach 6%, we'll probably look to shorten the
fund's duration because yields aren't likely to go much lower than that.

SEMIANNUAL REPORT LONG-TERM TREASURY 17

SCHEDULE OF INVESTMENTS
LONG-TERM TREASURY

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- --------------------------------------------------------------------------------

U.S. TREASURY SECURITIES

$ 8,200,000 U.S. Treasury Bonds, 12.00%,
8/15/13, Call Date 8/15/08 $ 11,823,375

6,600,000 U.S. Treasury Bonds, 11.25%,
2/15/15 9,933,000

11,500,000 U.S. Treasury Bonds, 7.25%,
5/15/16 12,491,875

13,000,000 U.S. Treasury Bonds, 8.75%,
5/15/17 16,274,375

8,500,000 U.S. Treasury Bonds, 8.875%,
2/15/19 10,837,500

11,800,000 U.S. Treasury Bonds, 8.125%,
8/15/19 14,045,682

15,500,000 U.S. Treasury Bonds, 8.75%,
8/15/20 19,655,938

23,000,000 U.S. Treasury Bonds, 7.125%,
2/15/23 24,804,051

6,000,000 U.S. Treasury Bonds, 6.625%,
2/15/27 6,144,372
---------------

TOTAL U.S. TREASURY SECURITIES--99.6% 126,010,168
---------------
(Cost $118,227,844)

TEMPORARY CASH INVESTMENTS--0.4%

463,000 FHLMC Discount Note, 6.05%,
10/1/97(1) 463,000
---------------
(Cost $463,000)

TOTAL INVESTMENT SECURITIES--100.0% $126,473,168
===============
(Cost $118,690,844)

NOTES TO SCHEDULE OF INVESTMENTS

FHLMC = FEDERAL HOME LOAN MORTGAGE CORPORATION

(1) THE YIELD TO MATURITY AT PURCHASE IS INDICATED.

SEE NOTES TO FINANCIAL STATEMENTS

18 LONG-TERM TREASURY AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES

INTERMEDIATE-
SHORT-TERM TERM LONG-TERM
SEPTEMBER 30, 1997 (UNAUDITED) TREASURY TREASURY TREASURY

ASSETS
<S> <C> <C> <C>
Investment securities, at value
(identified cost of $37,656,180,
$342,987,606, and $118,690,844,
respectively) (Note 3) ....... $37,817,331 $349,037,836 $126,473,168

Cash ........................... -- 1,906,672 110,874

Interest receivable ............ 508,740 4,785,713 1,617,158
------------- ------------- -------------
38,326,071 355,730,221 128,201,200
------------- ------------- -------------
LIABILITIES

Disbursements in excess of
demand deposit cash .......... 274,679 490,216 77,174

Payable for capital
shares redeemed .............. 57,425 852,080 68,388

Accrued management fee (Note 2) 16,219 149,438 52,934

Dividends payable .............. 22,308 215,044 83,437

Accrued expenses and
other liabilities ............ 1,809 3,282 1,904
------------- ------------- -------------
372,440 1,710,060 283,837
------------- ------------- -------------
Net Assets Applicable to

Outstanding Shares ............. $ 37,953,631 $ 354,020,161 $ 127,917,363
============= ============= =============
CAPITAL SHARES

Outstanding (Unlimited number
of shares authorized) ........ 3,879,640 33,997,296 12,688,840
============= ============= =============
Net Asset Value Per Share ...... $ 9.78 $ 10.41 $ 10.08
============= ============= =============
NET ASSETS CONSIST OF:

Capital paid in ................ $ 38,028,395 $ 356,621,844 $ 122,589,085

Accumulated net realized loss on
investment transactions ...... (235,915) (8,651,913) (2,454,046)

Net unrealized appreciation on
investments (Note 3) ......... 161,151 6,050,230 7,782,324
------------- ------------- -------------
$ 37,953,631 $ 354,020,161 $ 127,917,363
============= ============= =============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

SEMIANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES 19

<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS

INTERMEDIATE-
SHORT-TERM TERM LONG-TERM
SEPTEMBER 30, 1997 (UNAUDITED) TREASURY TREASURY TREASURY

FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 1997 (UNAUDITED)

INVESTMENT INCOME

Income:
<S> <C> <C> <C>
Interest .................... $ 1,127,623 $ 10,346,556 $ 4,438,271
------------ ------------ ------------

Expenses (Note 2):

Investment advisory fees .... 66,842 589,203 228,910

Administrative fees ......... 11,573 101,989 41,622

Transfer agency fees ........ 11,510 77,150 66,019

Printing and postage ........ 6,811 34,620 13,674

Registration and filing fees 9,613 11,088 13,035

Custodian fees .............. 8,078 9,236 4,804

Auditing and legal fees ..... 2,234 6,260 2,857

Directors' fees and expenses 2,838 6,104 3,494

Organization costs .......... 1,454 -- 1,454

Other operating expenses .... 1,167 5,043 2,288
------------ ------------ ------------
Total expenses ............ 122,120 840,693 378,157

Amount waived (Note 2) ...... (14,872) -- (5,935)
------------ ------------ ------------
Net expenses .............. 107,248 840,693 372,222
------------ ------------ ------------
Net investment income ....... 1,020,375 9,505,863 4,066,049
------------ ------------ ------------
REALIZED AND UNREALIZED
GAIN (LOSS)
ON INVESTMENTS (NOTE 3)

Net realized gain (loss)
on investments ............ 19,902 (210,824) 172,979

Change in net unrealized
appreciation on investments 371,515 11,235,840 10,082,671
------------ ------------ ------------
Net realized and unrealized
gain on investments ....... 391,417 11,025,016 10,255,650
------------ ------------ ------------
Net Increase in Net Assets
Resulting from Operations . $ 1,411,792 $ 20,530,879 $ 14,321,699
============ ============ ============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

20 STATEMENTS OF OPERATIONS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS

SIX MONTHS ENDED
SEPTEMBER 30, 1997 (UNAUDITED) SHORT-TERM INTERMEDIATE-TERM LONG-TERM
AND MARCH 31, 1997 TREASURY TREASURY TREASURY

Sept. 30, March 31, Sept. 30, March 31, Sept. 30, March 31,
Increase in Net Assets 1997 1997 1997 1997 1997 1997

OPERATIONS

<S> <C> <C> <C> <C> <C> <C>
Net investment income ........ $ 1,020,375 $ 1,857,387 $ 9,505,863 $ 18,171,895 $ 4,066,049 $ 7,541,443

Net realized gain
(loss) on investments ...... 19,902 (250,752) (210,824) (924,136) 172,979 (1,648,291)

Change in net unrealized
appreciation (depreciation)
on investments ............. 371,515 (25,367) 11,235,840 (5,211,554) 10,082,671 (2,530,525)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations .. 1,411,792 1,581,268 20,530,879 12,036,205 14,321,699 3,362,627
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS

From net investment income ... (1,020,375) (1,857,387) (9,505,863) (18,170,832) (4,066,049) (7,541,443)

From net realized gains
from investment transactions -- (314,362) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets
from distributions ......... (1,020,375) (2,171,749) (9,505,863) (18,170,832) (4,066,049) (7,541,443)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS

Proceeds from
shares sold ................ 13,165,975 20,702,093 57,559,297 135,941,496 38,506,135 121,731,884

Proceeds from
shares issued in
connection with
acquisition (Note 4) ....... -- -- 21,979,378 -- -- --

Proceeds from
reinvestment
of distributions ........... 781,256 1,701,032 8,120,707 15,158,997 3,677,789 6,721,638

Payments for
shares redeemed ............ (12,239,294) (21,606,539) (73,448,435) (127,201,582) (51,092,054) (108,445,771)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets
from capital share
transactions ............... 1,707,937 796,586 14,210,947 23,898,911 (8,908,130) 20,007,751
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets ... 2,099,354 206,105 25,235,963 17,764,284 1,347,520 15,828,935

NET ASSETS

Beginning of period .......... 35,854,277 35,648,172 328,784,198 311,019,914 126,569,843 110,740,908

End of period ................ $ 37,953,631 $ 35,854,277 $ 354,020,161 $ 328,784,198 $ 127,917,363 $ 126,569,843
=========== =========== =========== =========== =========== ===========
TRANSACTIONS IN
SHARES OF THE FUNDS

Sold ......................... 1,350,951 2,110,951 5,587,550 13,222,087 3,937,299 12,640,532

Issued in connection
with acquisition (Note 4) .. -- -- 2,112,963 -- -- --

Issued in reinvestment
of distributions ........... 80,229 173,971 791,021 1,484,213 377,391 703,288

Redeemed ..................... (1,255,502) (2,205,268) (7,160,633) (12,410,526) (5,206,244) (11,213,547)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) ...... 175,678 79,654 1,330,901 2,295,774 (891,554) 2,130,273
=========== =========== =========== =========== =========== ===========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS 21

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Government Income Trust (the Trust) is
registered under the Investment Company Act of 1940 as an open-end diversified
management investment company. American Century - Benham Short-Term Treasury
Fund (Short-Term), American Century - Benham Intermediate-Term Treasury Fund
(Intermediate-Term), and American Century - Benham Long-Term Treasury Fund
(Long-Term) ( the "Funds") are three of the eight funds issued by the Trust.
Short-Term seeks to earn and distribute the highest level of current income
exempt from state income taxes as is consistent with preservation of capital.
The Fund intends to pursue its investment objectives by investing exclusively in
securities issued or guaranteed by the U.S. Treasury. Intermediate-Term seeks to
earn and distribute the highest level of current income consistent with the
conservation of assets and the safety provided by U.S. Treasury bills, notes,
and bonds. The Fund intends to pursue its investment objectives by investing
primarily in U.S. Treasury notes, which carry the direct full faith and credit
pledge of the U.S. government. Long-Term seeks to provide a consistent and high
level of current income exempt from state taxes. The Fund intends to pursue its
investment objectives by investing exclusively in securities issued or
guaranteed by the U.S. Treasury. The Funds invest primarily in U.S. Treasury
securities with maturities based on each Funds' investment objectives. The
following significant accounting policies, related to the Funds, are in
accordance with accounting policies generally accepted in the investment company
industry.

SECURITY VALUATIONS--Securities are valued through valuations obtained
through a commercial pricing service or at the mean of the most recent bid and
asked prices. When valuations are not readily available, securities are valued
at fair value as determined in accordance with procedures adopted by the Board
of Trustees.

INVESTMENT INCOME--Interest income is recorded on the accrual basis and
includes amortization of discounts and premiums. Discounts are accrued to
maturity on a straight-line basis (except zero-coupon securities which are
amortized using the effective interest rate method), and premiums are amortized
using the effective interest rate method.

DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income are
declared daily and distributed monthly. Distributions from net realized gains
are declared and paid annually.

At March 31, 1997, accumulated net realized capital loss carryovers of
$232,104 for Short-Term, $6,688,256 for Intermediate-Term and $1,487,903 for
Long-Term (expiring 2003 through 2005) may be used to offset future taxable
gains. Short-Term, Intermediate-Term and Long-Term have elected to treat $6,878,
$1,529,071 and $355,015, respectively, of net capital losses incurred in the
five month period ended March 31, 1997, as having been incurred in the following
fiscal year.

The character of distributions made during the year from net investment
income or net realized capital gains may differ from their ultimate
characterization for federal income tax purposes. These differences are due to
differences in the recognition of income and expense items for financial
statement and tax purposes.

SUPPLEMENTARY INFORMATION--Certain officers and trustees of the Trust are
also officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc., the parent of the Trust's investment manager,
American Century Investment Management (ACIM), the Trust's distributor, American
Century Investment Services, Inc., and the Trust's transfer agent, American
Century Services Corporation (ACSC).

USE OF ESTIMATES-- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the period. Actual results could differ from
these estimates.

22 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The shareholders of the Funds approved a new management agreement with ACIM
on July 30, 1997, effective August 1, 1997, which replaced the previously
existing contracts between the Funds and Benham Management Corporation and ACSC
for advisory, administrative and transfer agency services. Under the agreement,
ACIM provides all services required by the Funds in exchange for one "unified"
management fee. Expenses excluded from this agreement are brokerage, taxes,
portfolio insurance, interest, fees and expenses of the Trustees who are not
considered "interested persons" as defined in the Investment Company Act of 1940
(including counsel fees) and extraordinary expenses. The annual rate at which
this fee is assessed is determined monthly in a two-step process: First, a fee
rate schedule is applied to the assets of all of the funds in the Fund's
investment category which are managed by ACIM (the "Investment Category Fee").
The overall investment objective of each Fund determines its Investment
Category. The three investment categories are: the Money Market Fund Category,
the Bond Fund Category and the Equity Fund Category. Short-Term,
Intermediate-Term and Long-Term are included in the Bond Fund Category. Second,
a separate fee rate schedule is applied to the assets of all of the funds
managed by ACIM (the "Complex Fee"). The Investment Category Fee and the Complex
Fee are then added to determine the unified management fee rate. The management
fee is paid monthly by each Fund based on each Fund's aggregate average daily
net assets during the previous month multiplied by the monthly management fee
rate.

The annualized Investment Category Fee schedule for the Funds is as follows:

0.2800% of the first $1 billion
0.2280% of the next $1 billion
0.1980% of the next $3 billion
0.1780% of the next $5 billion
0.1650% of the next $15 billion
0.1630% of the next $25 billion
0.1625% of the average daily net assets over $50 billion

The annualized Complex Fee schedule (for all Funds) is as follows:

The following expenses, incurred under the new management agreement, were
included in Investment Advisory Fees in the Statements of Operations:

SHORT-TERM INTERMEDIATE-TERM LONG-TERM
- --------------------------------------------------------------------------------
Total expenses ......... $34,158 $292,099 $107,521

Total expenses and the annualized ratio of operating expenses to average net
assets, under the previous agreement, for the four months ended July 31, 1997,
were as follows:

SHORT-TERM INTERMEDIATE-TERM LONG-TERM

Total expenses
(net of amount waived) ....... $73,090 $548,594 $264,701

Ratio of operating
expenses to
average net assets ............ 0.59% 0.50% 0.59%

SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 23

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS

Investment transactions, excluding short-term investments, for the six months
ended September 30, 1997, were as follows:

SHORT-TERM INTERMEDIATE-TERM LONG-TERM
PURCHASES
- --------------------------------------------------------------------------------
U.S. Treasury and
Agency Obligations ....... $41,451,246 $222,879,575 $13,980,469

PROCEEDS FROM SALES
- --------------------------------------------------------------------------------
U.S. Treasury and
Agency Obligations ....... $39,790,098 $226,754,663 $22,695,391

On September 30, 1997, the composition of unrealized appreciation and
depreciation of investment securities based on the aggregate cost of investments
for federal income tax purposes was as follows:

SHORT-TERM INTERMEDIATE-TERM LONG-TERM
- --------------------------------------------------------------------------------
Appreciation .............. $ 169,567 $ 6,379,244 $7,782,324

Depreciation .............. (8,416) (329,014) --
------------- ------------- -------------
Net ....................... $ 161,151 $ 6,050,230 $7,782,324
============= ============= ==============

The aggregate cost of investments for federal income tax purposes was the same
as the cost for financial reporting purposes.

- --------------------------------------------------------------------------------
4. REORGANIZATION PLAN

On August 29, 1997, Intermediate-Term acquired all of the net assets of the
American Century - Benham Intermediate-Term Government Fund (Intermediate-Term
Government), pursuant to a plan of reorganization approved by the acquired
fund's shareholders on July 30, 1997.

The acquisition was accomplished by a tax-free exchange of 2,112,963 shares of
Intermediate-Term for 2,245,781 shares of Intermediate-Term Government,
outstanding on August 29, 1997. The net assets of Intermediate-Term and
Intermediate-Term Government immediately before the acquisitions were
$325,428,315 and $21,794,449, respectively. Intermediate-Term Government's
unrealized depreciation of $59,574 was combined with that of Intermediate-Term.
Immediately after the acquisition, the combined net assets of Intermediate-Term
(the surviving fund for purposes of maintaining the financial statements and
performance history in the post-reorganization fund) were $347,222,764.

Intermediate-Term acquired capital loss carryforwards of approximately
$110,718. These acquired capital loss carryforwards are subject to limitations
on their use under the Internal Revenue Code, as amended.

24 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SHORT-TERM TREASURY

FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED MARCH 31 (EXCEPT AS NOTED)

1997(1) 1997 1996 1995 1994 1993(2)
PER-SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ......... $9.68 $9.84 $9.73 $9.86 $10.04 $10.00
-------- -------- -------- -------- -------- --------
Income From
Investment Operations

Net Investment Income ..... 0.27 0.52 0.53 0.50 0.36 0.25

Net Realized and
Unrealized Gain
(Loss) on Investment
Transactions .............. 0.10 (0.07) 0.11 (0.13) (0.14) 0.04
-------- -------- -------- -------- -------- --------
Total From
Investment Operations ..... 0.37 0.45 0.64 0.37 0.22 0.29
-------- -------- -------- -------- -------- --------
Distributions

From Net
Investment Income ......... (0.27) (0.52) (0.53) (0.50) (0.36) (0.25)

From Net Realized
Capital Gains ............. -- (0.09) -- -- (0.03) --

In Excess of Net
Realized Gains ............ -- -- -- -- (0.01) --
-------- -------- -------- -------- -------- --------
Total Distributions ....... (0.27) (0.61) (0.53) (0.50) (0.40) (0.25)
-------- -------- -------- -------- -------- --------
Net Asset Value,
End of Period ............... $9.78 $9.68 $9.84 $9.73 $9.86 $10.04
======== ======== ======== ======== ======== ========
Total Return(3) ........... 3.84% 4.62% 6.71% 3.85% 2.16% 2.79%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....... 0.58%(4) 0.61% 0.67% 0.67% 0.58% --

Ratio of Net Investment
Income to Average
Net Assets ..................5.48%(4) 5.26% 5.39% 5.22% 3.53% 4.50%(4)

Portfolio Turnover Rate ..... 114% 234% 224% 141% 262% 158%

Net Assets, End
of Period (in thousands) ....$37,954 $35,854 $35,648 $56,090 $24,929 $14,889
</TABLE>
- ----------
(1) SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED).

(2) SEPTEMBER 8, 1992 (INCEPTION) THROUGH MARCH 31, 1993.

(3) TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS, IF ANY. TOTAL RETURNS FOR PERIODS LESS THAN ONE YEAR ARE
NOT ANNUALIZED.

(4) ANNUALIZED.

SEE NOTES TO FINANCIAL STATEMENTS

SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS 25

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INTERMEDIATE-TERM TREASURY

FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED MARCH 31 (EXCEPT AS NOTED)

1997(1) 1997 1996 1995 1994 1993

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ......... $10.06 $10.24 $ 9.99 $10.18 $10.73 $10.52
-------- -------- -------- -------- -------- --------
Income From
Investment Operations

Net Investment Income ..... 0.30 0.58 0.58 0.53 0.48 0.56

Net Realized and
Unrealized Gain

(Loss) on Investment
Transactions .............. 0.35 (0.18) 0.25 (0.19) (0.27) 0.69
-------- -------- -------- -------- -------- --------
Total From
Investment Operations ..... 0.65 0.40 0.83 0.34 0.21 1.25
-------- -------- -------- -------- -------- --------
Distributions

From Net
Investment Income ......... (0.30) (0.58) (0.58) (0.53) (0.48) (0.56)

From Net
Realized Capital Gains .... -- -- -- -- (0.06) (0.48)

In Excess of Net
Realized Capital Gains .... -- -- -- -- (0.22) --
-------- -------- -------- -------- -------- --------
Total Distributions ....... (0.30) (0.58) (0.58) (0.53) (0.76) (1.04)
-------- -------- -------- -------- -------- --------
Net Asset Value,
End of Period ............... $10.41 $10.06 $10.24 $9.99 $10.18 $10.73
======== ======== ======== ======== ======== ========
Total Return(2) ........... 6.51% 4.05% 8.42% 3.54% 1.85% 12.36%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....... 0.51%(3) 0.51% 0.53% 0.53% 0.51% 0.53%

Ratio of Net Investment
Income to Average
Net Assets .................. 5.78%(3) 5.72% 5.65% 5.35% 4.50% 5.18%

Portfolio Turnover Rate ..... 69%(4) 110% 168% 92% 213% 299%

Net Assets, End
of Period (in thousands) .... $354,020 $328,784 $311,020 $305,353 $351,369 $391,538
</TABLE>
- ----------
(1) SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED).

(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
GOVERNMENT, PRIOR TO THE MERGER WERE EXCLUDED FROM THE PORTFOLIO TURNOVER
CALCULATION. SEE NOTE 4 IN NOTES TO FINANCIAL STATEMENTS.

SEE NOTES TO FINANCIAL STATEMENTS

26 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
LONG-TERM TREASURY

FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED MARCH 31 (EXCEPT AS NOTED)

1997(1) 1997 1996 1995 1994 1993(2)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ......... $9.32 $9.67 $9.05 $9.38 $10.24 $10.00
-------- -------- -------- -------- -------- --------
Income From
Investment Operations

Net Investment Income ..... 0.30 0.60 0.60 0.60 0.63 0.39

Net Realized and
Unrealized Gain
(Loss) on Investment
Transactions .............. 0.76 (0.35) 0.62 (0.33) (0.27) 0.24
-------- -------- -------- -------- -------- --------
Total From
Investment Operations ..... 1.06 0.25 1.22 0.27 0.36 0.63
-------- -------- -------- -------- -------- --------
Distributions

From Net
Investment Income ......... (0.30) (0.60) (0.60) (0.60) (0.63) (0.39)

From Net Realized
Capital Gains ............. -- -- -- -- (0.45) --

In Excess of Net
Realized Capital Gains .... -- -- -- -- (0.14) --
-------- -------- -------- -------- -------- --------
Total Distributions ....... (0.30) (0.60) (0.60) (0.60) (1.22) (0.39)
-------- -------- -------- -------- -------- --------
Net Asset Value,
End of Period ............... $10.08 $9.32 $9.67 $9.05 $9.38 $10.24
======== ======== ======== ======== ======== ========
Total Return(3) ........... 11.56% 2.65% 13.46% 3.25% 2.87% 6.48%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....... 0.57%(4) 0.60% 0.67% 0.67% 0.57% --

Ratio of Net
Investment Income
to Average Net Assets ....... 6.22%(4) 6.28% 5.93% 6.84% 5.89% 7.18%(4)

Portfolio Turnover Rate ..... 11% 40% 112% 147% 200% 57%

Net Assets, End
of Period (in thousands) .... $127,917 $126,570 $110,741 $34,906 $18,003 $20,975
</TABLE>
- ----------
(1) SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED).

(2) SEPTEMBER 8, 1992 (INCEPTION) THROUGH MARCH 31, 1993.

(3) TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS, IF ANY. TOTAL RETURNS FOR PERIODS LESS THAN ONE YEAR ARE
NOT ANNUALIZED.

(4) ANNUALIZED.

SEE NOTES TO FINANCIAL STATEMENTS

SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS 27

PROXY VOTING RESULTS

An annual meeting of shareholders was held on July 30, 1997, to vote on the
following proposals. All of the proposals received the required majority of
votes and were adopted.

A summary of voting results is listed below each proposal.

PROPOSAL 1:

To vote on the selection by the Board of Trustees of Coopers & Lybrand LLP as
independent auditors for the Trust.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,401,498 21,351,988 7,294,653
Withheld: 23,168 293,939 65,685
Abstain: 27,058 201,949 149,804

PROPOSAL 2:

To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,341,581 20,881,287 7,118,693
Against: 82,557 683,184 185,054
Abstain: 27,586 283,405 206,395

PROPOSAL 3:

To vote on the adoption of standardized investment limitations for the
following items:

* Eliminate the fundamental investment limitation concerning diversification of
investments.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,182,540 - 6,051,465
Against: 118,895 - 438,114
Abstain: 50,817 - 275,225
Broker
Non-Vote: 99,472 - 745,338

* Amend the fundamental investment limitation concerning the issuance of senior
securities.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,162,023 20,070,300 5,979,032
Against: 138,227 1,122,961 467,990
Abstain: 52,002 399,518 317,782
Broker
Non-Vote: 99,472 255,097 745,338

* Amend the fundamental investment limitation concerning borrowing.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,158,578 19,940,770 5,943,697
Against: 153,579 1,265,502 521,642
Abstain: 40,095 386,507 299,465
Broker
Non-Vote: 99,472 255,097 745,338

* Amend the fundamental investment limitation concerning lending.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,160,383 19,946,804 5,978,187
Against: 136,559 1,253,150 493,742
Abstain: 55,310 392,825 292,875
Broker
Non-Vote: 99,472 255,097 745,338

* Amend the fundamental investment limitation concerning concentration of
investments in a particular industry.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,168,631 - 5,963,065
Against: 128,987 - 481,816
Abstain: 54,634 - 319,923
Broker
Non-Vote: 99,472 - 745,338

28 PROXY VOTING RESULTS AMERICAN CENTURY INVESTMENTS

PROXY VOTING RESULTS

* Eliminate the fundamental limitation concerning investment in other
investment companies. (Intermediate-Term only)

For: 19,936,697
Against: 1,272,342
Abstain: 383,740
Broker Non-Vote: 255,097

* Amend the fundamental investment limitation concerning investments in real
estate. (Intermediate-Term only)

For: 20,020,751
Against: 1,194,335
Abstain: 377,693
Broker Non-Vote: 255,097

* Amend the fundamental investment limitation concerning underwriting.
(Intermediate-Term only)

For: 19,975,210
Against: 1,223,594
Abstain: 393,975
Broker Non-Vote: 255,097

* Amend the fundamental investment limitation concerning commodities.

SHORT- INTERMEDIATE- LONG-
TERM TERM TERM

For: 2,127,769 19,890,714 5,917,806
Against: 172,159 1,315,329 537,634
Abstain: 52,324 386,736 309,364
Broker
Non-Vote: 99,472 255,097 745,338

* Eliminate the fundamental limitation concerning short sales.
(Intermediate-Term only)

For: 19,929,940
Against: 1,278,654
Abstain: 384,185
Broker Non-Vote: 255,097

* Eliminate the fundamental investment limitation concerning margin purchases
of securities. (Intermediate-Term only)

For: 19,903,097
Against: 1,312,600
Abstain: 377,082
Broker Non-Vote: 255,097

* Eliminate the fundamental investment limitations concerning investments in
securities owned by officers and directors. (Intermediate-Term only)

For: 19,876,221
Against: 1,330,717
Abstain: 385,841
Broker Non-Vote: 255,097

* Eliminate the fundamental investment limitation concerning investments in
restricted securities. (Intermediate-Term only)

For: 20,018,276
Against: 1,216,212
Abstain: 358,291
Broker Non-Vote: 255,097

The following proposal was voted on by the shareholders of the Benham
Intermediate-Term Government Fund.

See Note 4 in the notes to financial statements.

PROPOSAL 1:

To vote on the approval of a plan of reorganization.

For: 1,711,199
Against: 12,333
Abstain: 4,374
Broker Non-Vote: --

SEMIANNUAL REPORT PROXY VOTING RESULTS 29

RETIREMENT ACCOUNT INFORMATION

30 RETIREMENT ACCOUNT INFORMATION AMERICAN CENTURY INVESTMENTS

NOTES

SEMIANNUAL REPORT NOTES 31

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

In addition to these principles, each fund has its own investment policies:

SHORT-TERM TREASURY seeks current income by investing primarily in
securities issued by the U.S. Treasury. The fund may also invest up to 35% of
its assets in securities issued by U.S. government agencies. The fund typically
maintains an average maturity of 1-3 years.

INTERMEDIATE-TERM TREASURY seeks current income by investing exclusively in
securities issued by the U.S. Treasury. The fund typically maintains an average
maturity of 1-10 years.

LONG-TERM TREASURY seeks current income by investing primarily in securities
issued by the U.S. Treasury. The fund may also invest up to 35% of its assets in
securities issued by U.S. government agencies. The fund typically maintains an
average maturity of 20-30 years.

COMPARATIVE INDICES

The indices listed below are used in the report for fund performance
comparisons. They are not investment products available for purchase.

The LEHMAN 1- TO 3-YEAR GOVERNMENT SECURITIES INDEX is an index of U.S.
Treasury and government agency securities with maturities between 1 and 3 years.

The MERRILL LYNCH 1- TO 10-YEAR TREASURY INDEX is an index of U.S. Treasury
securities with remaining maturities between 1 and 10 years.

The LEHMAN LONG-TERM GOVERNMENT SECURITIES INDEX is an index of U.S.
Treasury securities with maturities greater than 10 years.

LIPPER RANKINGS

LIPPER ANALYTICAL SERVICES, INC. is an independent mutual fund ranking
service that groups funds according to their investment objective. Rankings are
based on average annual returns for each fund in a given category for the
periods indicated. Rankings are not included for periods less than one year.

The Lipper categories for the U.S. Treasury funds are:

SHORT U.S. TREASURY FUNDS (Short-Term Treasury)--funds that invest at least
65% of assets in U.S. Treasury bills, notes and bonds with average maturities of
less than three years.

INTERMEDIATE U.S. TREASURY FUNDS (Intermediate-Term Treasury)--funds that
invest at least 65% of assets in U.S. Treasury bills, notes and bonds with
average maturities of 5-10 years.

GENERAL U.S. TREASURY FUNDS (Long-Term Treasury)--funds that invest at least
65% of assets in U.S. Treasury bills, notes and bonds.

INVESTMENT TEAM LEADERS

Portfolio Managers Bob Gahagan
Dave Schroeder

32 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

YIELDS

* 30-DAY SEC YIELD represents net investment income earned by the fund over a
30-day period, expressed as an annual percentage rate based on the fund's share
price at the end of the 30-day period. The SEC yield should be regarded as an
estimate of the fund's rate of investment income, and it may not equal the
fund's actual income distribution rate, the income paid to a shareholder's
account, or the income reported in the fund's financial statements.

PORTFOLIO STATISTICS

* NUMBER OF SECURITIES--the number of different securities held by a fund on a
given date.

* AVERAGE DURATION--another measure of the sensitivity of a fixed-income
portfolio to interest rate changes. Duration is a time-weighted average of the
interest and principal payments of the securities in a portfolio. As the
duration of a portfolio increases, so does the impact of a change in interest
rates on the value of the portfolio.

INVESTMENT TERMS

* BASIS POINT--one one-hundredth of a percentage point (or 0.01%). 100 basis
points equal one percentage point (or 1%). Basis points are used to clearly
describe interest rate changes. For example, if a news report indicates that
interest rates rose by 1%, does that mean 1% of the previous rate or one
percentage point? It is more accurate to state that interest rates rose by 100
basis points.

* COUPON--the stated interest rate of a security.

* YIELD CURVE--a graphic representation of the relationship between maturity and
yield for fixed-income securities. Yield curve graphs plot lengthening
maturities along the horizontal axis and rising yields along the vertical axis.
Most "normal" yield curves start in the lower left corner of the graph and rise
to the upper right corner, indicating that yields rise as maturities lengthen.
This upward sloping yield curve illustrates a normal risk/return
relationship--more return (yield) for more risk (a longer maturity). Conversely,
a "flat" yield curve provides little or no extra return for taking on more risk.

SECURITY TYPES

* U.S. GOVERNMENT AGENCY SECURITIES--debt securities issued by U.S. government
agencies (such as the Federal Home Loan Bank and the Federal Farm Credit Bank).
Some agency securities are backed by the full faith and credit of the U.S.
government, while others are guaranteed only by the issuing agency. Government
agency securities include discount notes (maturing in one year or less) and
medium-term notes, debentures and bonds (maturing in three months to 50 years).

* U.S. TREASURY SECURITIES--debt securities issued by the U.S. Treasury and
backed by the direct "full faith and credit" pledge of the U.S. government.
Treasury securities include bills (maturing in one year or less), notes
(maturing in two to 10 years) and bonds (maturing in more than 10 years).

* ZERO-COUPON BONDS (ZEROS)--bonds that make no periodic interest payments.
Instead, they are sold at a deep discount and then redeemed for their full face
value at maturity. When held to maturity, a zero's entire return comes from the
difference between its purchase price and its value at maturity. The funds
typically only invest in zeros issued by the U.S. Treasury.

SEMIANNUAL REPORT GLOSSARY 33

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

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

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

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: www.americancentury.com

AMERICAN CENTURY GOVERNMENT INCOME TRUST

INVESTMENT MANAGER

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

KANSAS CITY, MISSOURI

AMERICAN CENTURY INVESTMENT SERVICES, INC.

9711 [recycled logo]
SH-BKT-10282 Recycled
<PAGE>
[BOOK THREE]

SEMIANNUAL
REPORT

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

SEPTEMBER 30, 1997

BENHAM
GROUP

GNMA

TABLE OF CONTENTS

Report Highlights ............................................. 1
Our Message to You ............................................ 2
Market Perspective ............................................ 3
Performance & Portfolio Information ........................... 4
Management Q & A .............................................. 5
Schedule of Investments ....................................... 8
Statement of Assets and Liabilities ........................... 10
Statement of Operations ....................................... 11
Statements of Changes in Net Assets ........................... 12
Notes to Financial Statements ................................. 13
Financial Highlights .......................................... 15
Proxy Voting Results .......................................... 16
Retirement Account Information ................................ 18
Background Information
Investment Philosophy & Policies ................... 20
Comparative Indices ................................ 20
Lipper Rankings .................................... 20
Investment Team Leaders ............................ 20
Glossary ...................................................... 21

We welcome your comments or questions about this report. See the back cover for
ways to contact us by mail, phone or e-mail.

Twentieth Century and American Century are registered marks of American Century
Services Corporation. Benham Group is a registered mark of Benham Management
Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

MARKET PERSPECTIVE

* Prices rose and yields fell on mortgage-backed securities during the six
months ended September 30, 1997. Nevertheless, "real" yields--stated yields
minus the rate of inflation--remained high because inflation was low.

* Yields declined partly because inflation was tame and because the Federal
Reserve elected to hold short-term interest rates steady throughout the
period.

* Strong demand for the relatively higher yields mortgage-backed securities
offer over Treasurys also helped boost prices and lower yields.

* GNMAs performed well relative to Treasury securities during the first and
second quarters of 1997, but they lagged in the third quarter, when lower
interest rates caused a sharp increase in mortgage prepayments.

* In late July, the yield on the 10-year Treasury note--a benchmark for
mortgage pricing-- fell below 6.20%, a key mortgage refinancing threshold.
The dip below 6.20% exposed more than $180 billion in 8% mortgage-backed
securities to prepayments.

GNMA

* After building a big lead over its peers in the first quarter, the fund gave
back some of that outperformance during the second and third quarters. For
the six months ended September 30, 1997, the fund returned 6.40%, compared
with the 6.70% return of the average GNMA fund.

* The fund continued to produce solid long-term returns, ranking in the top
25% among GNMA funds for the one-, five- and ten-year periods ended
September 30, 1997.

* The keys to the fund's strong long-term performance are our
lower-than-average expenses and the fact that we manage the fund to mimic
the Salomon Brothers 30-year GNMA Index, which has historically outperformed
most GNMA funds.

* To enhance the fund's performance relative to the index, we underweighted
higher-coupon mortgages, which we felt were likely to be refinanced as
interest rates declined.

* Going forward, we're likely to continue to underweight higher-coupon
mortgages relative to the index. We'll also look for attractive substitutes
for mortgage-backed securities we feel are likely to be refinanced.

GNMA

TOTAL RETURNS: AS OF 9/30/97
6 Months 6.40%*
1 Year 9.96%

30-DAY SEC YIELD: 6.69%

NET ASSETS: $1.2 billion
(AS OF 9/30/97)

INCEPTION DATE: 9/23/85

TICKER SYMBOL: BGNMX

* Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
21.

SEMIANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

During the six months ended September 30, 1997, mortgage-backed securities
posted strong gains. In the following pages, the fund's investment team provides
further details about the market and how your fund was managed during the
period.

In closing, we want to reassure you that American Century remains committed
to serving your investment needs first and foremost. Thank you for your trust
and confidence.

Sincerely,

/s/James E. Stowers III /s/James M. Benham
James E. Stowers III James M. Benham
Chief Executive Officer Vice Chairman
American Century Companies, Inc. American Century Companies, Inc.

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE

[line graph - data below]

Mortgage Refinancing Trends
April through September '97

10-Year Index of
Treasury Note Yield Refinancing Applications
(left scale) (right scale)
4/4/97 6.910% 292.3
4/11/97 6.972% 285.1
4/18/97 6.829% 282.3
4/25/97 6.942% 273.2
5/2/97 6.648% 289.8
5/9/97 6.673% 303.4
5/16/97 6.723% 332.5
5/23/97 6.744% 325.1
5/30/97 6.661% 236.5
6/6/97 6.490% 322.4
6/13/97 6.430% 375.7
6/20/97 6.378% 396.5
6/27/97 6.455% 422.4
7/4/97 6.311% 331.7
7/11/97 6.224% 497.3
7/18/97 6.247% 542.8
7/25/97 6.183% 595.9
8/1/97 6.184% 689.3
8/8/97 6.371% 718.8
8/15/97 6.240% 577.2
8/22/97 6.362% 552.9
8/29/97 6.341% 477.8
9/5/97 6.352% 413.0
9/12/97 6.285% 498.5
9/19/97 6.094% 699.6
9/26/97 6.083% 691.5

Source: Bloomberg Financial Markets

SOLID GNMA RETURNS

Mortgage-backed securities performed well in the six months ended September
30, 1997. For the period, the Salomon Brothers 30-Year GNMA Index returned
6.75%. Yields on mortgage-backed securities declined overall, though real yields
(a security's stated yield minus the rate of inflation) remained high because
inflation was low.

LOW INFLATION

Low inflation and a slower rate of economic growth during the period helped
support prices and lower yields for GNMA securities. Inflation rose at an
annualized rate of 1.6% for the first nine months of the year.

After expanding at an annual rate of nearly 5% during the first quarter of
1997, the economy grew by 3.3% in the second quarter and an estimated 3.5%
during the third quarter. Despite the fact that the economy grew at a pace that
has historically been accompanied by rising prices, the Federal Reserve elected
to hold interest rates steady throughout the six-month period.

STRONG DEMAND

The relatively high yields of mortgage-backed securities helped increase
investor demand for GNMAs. The difference in yield between like-maturity
Treasurys and corporate securities continued to decline during the period. As a
result, many investors looking for additional yield bought mortgage-backed
securities.

GNMAs performed well relative to Treasurys during the second quarter of 1997
but lagged in the third quarter, when declining interest rates caused mortgage
refinancings to rise sharply. As the accompanying graph shows, the yield on the
10-year Treasury note--a benchmark for mortgage pricing--fell from 7% to 6%
during the period. When yields neared 6% in July and September, mortgage
prepayments shot higher.

REFINANCINGS ON THE RISE

Though rates declined steadily beginning in April, refinancing activity
didn't pick up until early July. That's because a large number of prepayments in
1995 removed many higher-coupon fixed-rate mortgages from the refinancing pool.
But as rates declined over the last six months, it became profitable for a
greater number of homeowners to refinance their lower-coupon mortgages.

In late July, for example, the yield on the 10-year Treasury note dipped
below 6.20%, a significant threshold for mortgage prepayments. The rally exposed
more than $180 billion in 8% mortgage passthrough securities to prepayments.

The effect of prepayments on the mortgage-backed securities market is
magnified as rates decline. If the 10-year note yield were to fall as far as
5.60%--matching the February 1996 low in interest rates--it would expose half a
trillion dollars in 7.5% mortgage passthrough securities to prepayments.

SEMIANNUAL REPORT MARKET PERSPECTIVE 3

<TABLE>
<CAPTION>
PERFORMANCE & PORTFOLIO INFORMATION

<S> <C> <C> <C> <C> <C>
GNMA .......................... 6.40% 9.96% 9.26% 6.58% 9.41%

Salomon 30-Year GNMA Index .... 6.75% 10.13% 9.92% 7.02% 9.88%

Average GNMA Fund(1) .......... 6.70% 9.40% 8.89% 6.13% 8.74%

Fund's Ranking Among
GNMA Funds(1) ................. -- 13 out of 53 16 out of 43 7 out of 30 3 out of 24
</TABLE>
- ----------
(1) According to Lipper Analytical Services.

See pages 20-21 for more information about returns, the comparative index and
Lipper fund rankings.

[mountain graph - data below]

Growth of $10,000 Over Ten Years
$10,000 investment made 9/30/87

Value on 9/30/97
Salomon 30-Year
GNMA GNMA Index

Sep-87 $10,000 $10,000
Oct-87 $10,383 $10,333
Nov-87 $10,514 $10,486
Dec-87 $10,654 $10,608
Jan-88 $11,050 $11,046
Feb-88 $11,189 $11,178
Mar-88 $11,113 $11,075
Apr-88 $11,090 $10,992
May-88 $11,040 $10,984
Jun-88 $11,292 $11,272
Jul-88 $11,281 $11,227
Aug-88 $11,269 $11,239
Sep-88 $11,527 $11,518
Oct-88 $11,743 $11,790
Nov-88 $11,619 $11,617
Dec-88 $11,562 $11,553
Jan-89 $11,724 $11,766
Feb-89 $11,670 $11,674
Mar-89 $11,677 $11,678
Apr-89 $11,910 $11,887
May-89 $12,231 $12,294
Jun-89 $12,573 $12,648
Jul-89 $12,782 $12,931
Aug-89 $12,651 $12,744
Sep-89 $12,706 $12,823
Oct-89 $12,959 $13,123
Nov-89 $13,093 $13,275
Dec-89 $13,168 $13,359
Jan-90 $13,062 $13,239
Feb-90 $13,120 $13,288
Mar-90 $13,163 $13,345
Apr-90 $13,037 $13,191
May-90 $13,418 $13,621
Jun-90 $13,624 $13,849
Jul-90 $13,838 $14,091
Aug-90 $13,705 $13,947
Sep-90 $13,802 $14,065
Oct-90 $13,969 $14,221
Nov-90 $14,271 $14,573
Dec-90 $14,505 $14,818
Jan-91 $14,709 $15,027
Feb-91 $14,812 $15,117
Mar-91 $14,895 $15,235
Apr-91 $15,050 $15,394
May-91 $15,170 $15,515
Jun-91 $15,181 $15,549
Jul-91 $15,444 $15,814
Aug-91 $15,726 $16,102
Sep-91 $16,003 $16,403
Oct-91 $16,250 $16,650
Nov-91 $16,356 $16,759
Dec-91 $16,763 $17,181
Jan-92 $16,549 $16,990
Feb-92 $16,720 $17,143
Mar-92 $16,659 $17,083
Apr-92 $16,813 $17,230
May-92 $17,087 $17,533
Jun-92 $17,316 $17,773
Jul-92 $17,472 $17,910
Aug-92 $17,711 $18,157
Sep-92 $17,871 $18,303
Oct-92 $17,714 $18,175
Nov-92 $17,824 $18,276
Dec-92 $18,049 $18,485
Jan-93 $18,299 $18,745
Feb-93 $18,472 $18,907
Mar-93 $18,538 $19,029
Apr-93 $18,608 $19,125
May-93 $18,698 $19,234
Jun-93 $18,895 $19,430
Jul-93 $18,989 $19,509
Aug-93 $19,072 $19,543
Sep-93 $19,048 $19,554
Oct-93 $19,139 $19,595
Nov-93 $19,066 $19,568
Dec-93 $19,239 $19,717
Jan-94 $19,386 $19,880
Feb-94 $19,281 $19,791
Mar-94 $18,778 $19,288
Apr-94 $18,656 $19,174
May-94 $18,718 $19,242
Jun-94 $18,697 $19,199
Jul-94 $19,019 $19,558
Aug-94 $19,063 $19,576
Sep-94 $18,838 $19,341
Oct-94 $18,781 $19,318
Nov-94 $18,727 $19,254
Dec-94 $18,918 $19,468
Jan-95 $19,306 $19,882
Feb-95 $19,751 $20,413
Mar-95 $19,816 $20,497
Apr-95 $20,069 $20,780
May-95 $20,651 $21,426
Jun-95 $20,797 $21,565
Jul-95 $20,862 $21,623
Aug-95 $21,067 $21,816
Sep-95 $21,269 $22,025
Oct-95 $21,457 $22,213
Nov-95 $21,680 $22,475
Dec-95 $21,917 $22,760
Jan-96 $22,054 $22,933
Feb-96 $21,887 $22,775
Mar-96 $21,813 $22,723
Apr-96 $21,733 $22,619
May-96 $21,646 $22,582
Jun-96 $21,913 $22,865
Jul-96 $22,005 $22,957
Aug-96 $22,000 $22,967
Sep-96 $22,348 $23,343
Oct-96 $22,782 $23,814
Nov-96 $23,192 $24,152
Dec-96 $23,059 $24,035
Jan-97 $23,232 $24,251
Feb-97 $23,318 $24,294
Mar-97 $23,092 $24,086
Apr-97 $23,429 $24,452
May-97 $23,631 $24,686
Jun-97 $23,903 $24,978
Jul-97 $24,304 $25,402
Aug-97 $24,277 $25,377
Sep-97 $24,575 $25,709

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the index's
total return line does not.

PORTFOLIO AT A GLANCE

9/30/97 3/31/97

Number of Securities 3,245 3,270
Average Duration 3.2 years 4.5 years
Average Life 6.3 years 7.6 years
Expense Ratio 0.57%* 0.55%

* Annualized.

YIELD AS OF SEPTEMBER 30, 1997
30-DAY
SEC
YIELD

GNMA 6.69%

Yield is defined in the Glossary on page 21.

4 PERFORMANCE & PORTFOLIO INFORMATION AMERICAN CENTURY INVESTMENTS

MANAGEMENT Q&A

An interview with Casey Colton, a portfolio manager on the GNMA fund
investment team.

HOW DID THE FUND PERFORM?

After building a big lead over the average GNMA fund in the first quarter of
1997, the fund gave back some of that outperformance in the second and third
quarters. For the six months ended September 30, 1997, the fund returned 6.40%,
compared with the 6.70% average return of the 55 "GNMA Funds" tracked by Lipper
Analytical Services. In contrast, the fund's year-to-date return through
September was 6.56%, while the average GNMA fund returned 6.41%.

The fund has consistently outperformed its peers in a stable or weak bond
market, but the fund's advantage has been less pronounced when the bond market
rallies. The key is for the fund to outperform by more during bond market
declines than it might give back during a market rally. Our goal is strong
long-term performance, and the fund's one-, five- and ten-year returns, which
continue to place the fund in the top quarter of its peer group, reflect that.
(See the Total Returns table on the previous page for fund performance
comparisons.)

[bar chart - data below]

GNMA'S ONE-YEAR RETURNS FOR THE PAST TEN YEARS (Periods ended September 30)

Salomon 30-Year
GNMA GNMA Index
9/88 15.27% 13.18%
9/89 10.23% 10.17%
9/90 8.63% 8.83%
9/91 15.95% 14.25%
9/92 11.67% 10.38%
9/93 6.58% 6.40%
9/94 -1.10% -1.10%
9/95 12.90% 12.19%
9/96 5.07% 5.64%
9/97 9.96% 10.13%

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

SEMIANNUAL REPORT MANAGEMENT Q & A 5

MANAGEMENT Q&A

WHY DOES THE FUND OUTPERFORM OVER LONGER PERIODS?

We manage the fund to deliver a "pure play" on mortgage-backed securities.
We do that by trying to mimic the Salomon Brothers 30-Year GNMA Index, which
tracks an entire universe of outstanding mortgages. The index has historically
outperformed most GNMA funds, so using it as a benchmark has helped the fund
produce solid long-term returns. But the index is subject to weak performance
over short periods of time--like the last six months, when rates fell sharply.

Another reason the fund's longer-term returns are strong relative to the
average GNMA fund is that our expenses are below average. Other things being
equal, lower expenses mean higher returns and yields for our shareholders.

WHY DID THE FUND'S AVERAGE DURATION AND LIFE SHORTEN DURING THE PERIOD?

When interest rates fall, mortgage prepayments rise. As a result, the
average life and duration of mortgage-backed securities tend to decrease during
bond market rallies and increase during market sell-offs. (That's one reason
GNMAs tend to underperform Treasury securities in a bond market rally--GNMA
durations shorten, providing smaller incremental returns for each drop in
interest rates.) So, the fund's duration and average life naturally shortened as
rates declined.

Throughout the period, we worked to keep the fund's duration close to the
duration of the benchmark index. As of September 30, 1997, the fund's 3.2-year
duration was slightly shorter than that of the benchmark.

DID YOU MAKE ANY CHANGES TO THE FUND'S COUPON STRUCTURE?

We tried to add value by reducing the fund's exposure to prepayments
relative to the index. One way we tried to do that was to sell some of our
higher-coupon premium mortgages before they were refinanced at par value, which
would have resulted in a loss for the fund. (Premium mortgages have coupons
higher than the prevailing home lending rate.) In particular, we underweighted
the fund in relatively new mortgages with coupons above 8%, which we felt were
likely to be refinanced as rates declined.

WHY DID YOU INCLUDE INFLATION-INDEXED TREASURY SECURITIES IN THE FUND'S
PORTFOLIO?

We bought inflation-indexed Treasurys because they were a good substitute
for some of the premium mortgages we sold. Inflation-indexed securities mimic
the behavior of higher-coupon mortgages in a bond market rally, but they don't
carry the prepayment risk associated with mortgage-backed securities.

Returns on inflation-indexed Treasurys are generated from the security's
coupon plus the inflation rate and any appreciation on the principal amount. So
they can be a good buy if you think the inflation rate plus the security's fixed
coupon will exceed the rate you can get on a nominal Treasury bond.

[pie charts]

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 9/30/97)
GNMAs 90%
Treasury Securities 8%
Government Agency
Discount Notes 2%

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 3/31/97)
GNMAs 92%
Treasury Securities 7%
Repos 1%

6 MANAGEMENT Q & A AMERICAN CENTURY INVESTMENTS

MANAGEMENT Q&A

WHAT'S YOUR OUTLOOK FOR GNMAS OVER THE NEXT SIX MONTHS?

Prepayments will be a major factor in determining the direction of the
mortgage-backed market going forward. We're most concerned about the effect of
prepayments on securities with coupons greater than 8% issued in the last 18
months. We expect prepayments on these securities will work through the system
by the end of 1997. We also expect supply and demand factors to continue to
support the GNMA market in the coming months--low Treasury debt issuance could
help keep prices high and yields low on mortgage-backed securities.

But the Federal Reserve is concerned that strong economic growth, low
unemployment and rising wages could translate into inflation down the road.
Though we don't think interest rates are headed sharply higher, we wouldn't be
surprised if the Fed decided to take out some insurance against inflation by
raising rates. Slightly higher rates could again provide a very good environment
for mortgage-backed securities.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND GOING FORWARD?

Relative to the index, we'll likely continue to underweight premium
mortgages created in the last year and a half. But if mortgage prepayment
activity were to decrease, we'd consider moving back to a neutral position in
premium mortgages. Barring any sharp changes in interest rates, we'll try to
maintain a neutral duration relative to the index. To help the fund's
performance against the index, we'll continue to look for attractive substitutes
such as inflation-indexed Treasury securities for mortgage-backed securities we
think are likely to be refinanced.

[bar chart - data below]

PORTFOLIO COMPOSITION BY GNMA COUPON
9/30/97 3/31/97
Less than 7% 7 7
7%-8% 38 38
8%-9% 35 33
9%-10% 18 19
Greater than 10% 2 3

SEMIANNUAL REPORT MANAGEMENT Q & A 7

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- -------------------------------------------------------------------------------------

U.S. TREASURY SECURITIES
<S> <C> <C> <C>
$ 20,042,200 U.S. Treasury Inflation Indexed
Notes, 3.625%, 7/15/02 $ 19,992,095

60,000,000 U.S. Treasury Notes, 5.875%,
8/31/99 60,056,220

21,500,000 U.S. Treasury Notes, 6.50%,
10/15/06 21,963,583
---------------------

TOTAL U.S. TREASURY SECURITIES--8.5% 102,011,898
---------------------
(Cost $101,744,829)

U.S. GOVERNMENT AGENCY DISCOUNT NOTES--1.7%

19,900,000 FHLMC Discount Note, 6.05%,
10/1/97(1) 19,900,000
---------------------
(Cost $19,900,000)

GNMA CERTIFICATES(2)

5,112,139 GNMA, 6.00%, due 7/20/16 to
7/20/26 4,834,281

73,970,378 GNMA, 6.50%, due 9/20/08 to
5/15/26 72,501,543

85,027,876 GNMA, 7.00%, due 9/15/08 to
7/15/26 85,157,462

15,206,775 GNMA, 7.25%, due 7/20/20 to
12/20/25 15,271,839

251,533,720 GNMA, 7.50%, due 1/15/06 to
6/15/27 256,574,592

8,778,592 GNMA, 7.65%, due 6/15/16 to
2/15/18 9,088,382

20,590,861 GNMA, 7.75%, due 9/20/17 to
1/20/26 21,095,543

6,906,709 GNMA, 7.77%, due 4/15/20 to
1/15/21 7,153,984

4,224,830 GNMA, 7.85%, due 11/20/20 to
10/20/22 4,358,719

1,954,087 GNMA, 7.89%, due 9/20/22 2,016,792

3,988,196 GNMA, 7.98%, due 6/15/19 4,176,355

181,781,273 GNMA, 8.00%, due 6/15/06 to
6/15/34 188,614,719

3,650,740 GNMA, 8.15%, due 11/15/19 to
2/15/21 3,818,531

38,256,908 GNMA, 8.25%, due 2/15/06 to
10/20/25 39,951,602

Principal Amount Value
- -------------------------------------------------------------------------------------

$ 9,437,978 GNMA, 8.35%, due 1/15/19 to
12/15/20 $ 9,957,674

91,585,379 GNMA, 8.50%, due 12/15/04 to
5/15/31 96,510,022

1,809,516 GNMA, 8.625%, due 1/15/32 1,930,390

25,691,656 GNMA, 8.75%, due 2/15/16 to
7/15/27 27,318,456

104,716,346 GNMA, 9.00%, due 11/15/04 to
3/15/27 112,493,690

19,269,571 GNMA, 9.25%, due 4/15/16 to
8/15/26 20,705,633

37,920,519 GNMA, 9.50%, due 6/15/09 to
7/20/25 40,916,778

6,272,167 GNMA, 9.75%, due 6/15/05 to
4/20/25 6,759,730

4,939,489 GNMA, 10.00%, due 11/15/09
to 2/20/22 5,400,427

3,770,519 GNMA, 10.25%, due 5/15/12 to
2/15/21 4,138,814

1,188,212 GNMA, 10.50%, due 11/15/97
to 3/15/21 1,322,680

680,330 GNMA, 10.75%, due 12/15/09
to 8/15/19 751,711

2,823,162 GNMA, 11.00%, due 12/15/09
to 8/15/20 3,164,052

36,613 GNMA, 11.25%, due 10/20/15
to 2/20/16 41,358

772,891 GNMA, 11.50%, due 1/15/98 to
2/20/20 883,053

24,246 GNMA, 11.75%, due 2/15/99 25,112

706,936 GNMA, 12.00%, due 6/15/00 to
1/20/15 811,948

419,274 GNMA, 12.25%, due 8/15/13 to
7/15/15 483,737

909,075 GNMA, 12.50%, due 11/15/99
to 10/15/15 1,061,427

73,009 GNMA, 12.75%, due 11/15/13
to 6/15/15 85,547

1,692,376 GNMA, 13.00%, due 11/15/10
to 8/15/15 2,003,626

36,629 GNMA, 13.25%, due 1/20/15 43,453

668,981 GNMA, 13.50%, due 5/15/10 to
12/15/14 799,718

53,012 GNMA, 13.75%, due 8/15/14 to
10/15/14 63,957

See Notes to Financial Statements

8 SCHEDULE OF INVESTMENTS AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- -------------------------------------------------------------------------------------

$ 47,587 GNMA, 14.00%, due 6/15/11 to
10/15/14 $ 57,768

329,199 GNMA, 14.50%, due 9/15/12 to
10/15/14 406,104

701,232 GNMA, 15.00%, due 6/15/11 to
10/15/12 876,038

178,737 GNMA, 16.00%, due 8/15/10 to
4/15/12 225,477
-------------------

TOTAL GNMA CERTIFICATES--88.1% 1,053,852,724
-------------------
(Cost $1,029,862,918)

FORWARD COMMITMENTS--1.7%

20,000,000 GNMA Purchase, 7.50%,
settlement 11/19/97 20,356,180
-------------------
(Cost $20,315,625)

TOTAL INVESTMENT SECURITIES--100.0% $1,196,120,802
===================
(Cost $1,171,823,372)
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

FHLMC = Federal Home Loan Mortgage Corporation

GNMA = Government National Mortgage Association

(1) Rate disclosed is the yield to maturity at purchase.

(2) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.

See Notes to Financial Statements

SEMIANNUAL REPORT SCHEDULE OF INVESTMENTS 9

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 1997 (UNAUDITED)

ASSETS

Investment securities, at value
(identified cost of $1,171,823,372) (Note 3) ... $ 1,196,120,802

Cash ........................................... 2,033,513

Receivable for investments sold ................ 19,965,625

Interest receivable ............................ 8,047,548
--------------
1,226,167,488
--------------
LIABILITIES

Disbursements in excess
of demand deposit cash ....................... 1,343,501

Payable for investments purchased .............. 20,390,625

Payable for capital shares redeemed ............ 762,740

Accrued management fees (Note 2) ............... 597,060

Dividends payable .............................. 860,046

Accrued expenses and
other liabilities ............................ 13,593
--------------
23,967,565
--------------
Net Assets Applicable to
Outstanding Shares ........................... $ 1,202,199,923
==============
CAPITAL SHARES

Outstanding (Unlimited number
of shares authorized) ........................ 113,124,509
==============
Net Asset Value Per Share ...................... $ 10.63
==============
NET ASSETS CONSIST OF:

Capital paid in ................................ $ 1,204,358,611

Accumulated net realized loss
on investment transactions
(26,456,118)

Net unrealized appreciation
on investments (Note 3) ...................... 24,297,430
--------------
$ 1,202,199,923
==============

See Notes to Financial Statements

10 STATEMENT OF ASSETS AND LIABILITIES AMERICAN CENTURY INVESTMENTS

STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)

INVESTMENT INCOME

Income:

Interest ......................................... $41,929,421

Expenses (Note 2):

Investment advisory fees ......................... 2,233,610

Transfer agency fees ............................. 381,757

Administrative fees .............................. 359,302

Printing and postage ............................. 123,234

Custodian fees ................................... 108,773

Registration and filing fees ..................... 21,350

Auditing and legal fees .......................... 20,142

Telephone expenses ............................... 14,316

Trustees' fees and expenses ...................... 10,981

Other operating expenses ......................... 36,236
-------------
3,309,701
-------------
Net investment income ............................ 38,619,720
-------------
REALIZED AND UNREALIZED
GAIN (LOSS)
ON INVESTMENTS (NOTE 3)

Net realized loss on investments ................. (1,087,440

Change in net unrealized
appreciation on investments .................... 33,562,968
-------------
Net realized and unrealized
gain on investments ............................ 32,475,528
-------------
Net Increase in Net Assets
Resulting from Operations ...................... $71,095,248
=============

See Notes to Financial Statements

SEMIANNUAL REPORT STATEMENT OF OPERATIONS 11

STATEMENTS OF CHANGES IN NET ASSETS

SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
AND YEAR ENDED MARCH 31, 1997

Sept. 30, March 31,
Increase (Decrease) in Net Assets 1997 1997

OPERATIONS

Net investment income .......... $ 38,619,720 $ 76,450,742

Net realized loss on investments (1,087,440) (1,660,256)

Change in net unrealized
appreciation (depreciation)
on investments ................. 33,562,968 (10,865,815)
--------------- --------------
Net increase in net assets
resulting from operations .... 71,095,248 63,924,671
--------------- --------------
DISTRIBUTIONS
TO SHAREHOLDERS

From net investment income ..... (38,619,720) (76,433,695)
--------------- --------------
CAPITAL SHARE TRANSACTIONS

Proceeds from shares sold ...... 219,902,880 428,072,730

Proceeds from reinvestment
of distributions ............... 30,132,252 58,737,337

Payments for shares redeemed ... (199,475,838) (475,155,178)
--------------- --------------
Net increase in net assets from
capital share transactions ..... 50,559,294 11,654,889
--------------- --------------
Net increase (decrease)
in net assets .................. 83,034,822 (854,135)

NET ASSETS

Beginning of period ............ 1,119,165,101 1,120,019,236
--------------- --------------
End of period .................. $ 1,202,199,923 $ 1,119,165,101
=============== ==============
TRANSACTIONS IN SHARES
OF THE FUND

Sold ........................... 20,892,976 41,003,499

Issued in reinvestment
of distributions ............... 2,866,004 5,649,816

Redeemed ....................... (18,972,647) (45,535,917)
--------------- --------------
Net increase ................... 4,786,333 1,117,398
=============== ==============

See Notes to Financial Statements

12 STATEMENTS OF CHANGES IN NET ASSETS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Government Income Trust (the Trust), is
registered under the Investment Company Act of 1940 as an open-end diversified
management investment company. American Century - Benham GNMA Fund (the Fund) is
one of the eight funds issued by the Trust. The Fund seeks to provide a high
level of current income consistent with safety of principal and maintenance of
liquidity by investing primarily in mortgage-backed Ginnie Mae certificates. The
following accounting policies, related to the Fund, are in accordance with
accounting policies generally accepted in the investment company industry.

INVESTMENT INCOME--Interest income is recorded on the accrual basis and
includes amortization of discounts and premiums. Discounts and premiums on
mortgage-backed securities are amortized in proportion to the monthly paydown
amounts. Notes and bonds are amortized using the effective interest rate method.

INCOME TAX STATUS--It is the Fund's policy to distribute all net investment
income and net realized capital gains to shareholders and to otherwise qualify
as a regulated investment company under the provisions of the Internal Revenue
Code. Accordingly, no provision has been made for federal or state taxes.

FORWARD COMMITMENTS--The Fund may purchase and sell U.S. government
securities on a firm commitment basis. Under these arrangements, the securities'
prices and yields are fixed on the date of the commitment, but payment and
delivery are scheduled for a future date. During this period, securities are
subject to market fluctuations. The Fund maintains segregated accounts
consisting of cash or liquid securities in an amount sufficient to meet the
purchase price.

DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income are
declared daily and paid monthly. Distributions from net realized gains are
declared and paid annually.

At March 31, 1997, accumulated net realized capital loss carryovers of
$24,647,039 (expiring 2001 through 2005) may be used to offset future taxable
gains. The fund has elected to treat $42,597 of net capital losses incurred in
the five month period ended March 31, 1997, as having incurred in the following
fiscal year.

The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences are due to differences in the
recognition of income and expense items for financial statement and tax
purposes.

SUPPLEMENTARY INFORMATION--Certain officers and trustees of the Trust are
also officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc., the parent of the Trust's investment manager,
American Century Investment Management, Inc. (ACIM), the Trust's distributor,
American Century Investment Services, Inc., and the Trust's transfer agent,
American Century Services Corporation (ACSC).

SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 13

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The shareholders of the Fund approved a new management agreement with ACIM
on July 30, 1997, effective August 1, 1997, which replaced the previously
existing contracts between the Fund and Benham Management Corporation and ACSC
for advisory, administrative and transfer agency services. Under the agreement,
ACIM provides all services required by the Fund in exchange for one "unified"
management fee. Expenses excluded from this agreement are brokerage, taxes,
portfolio insurance, interest, fees and expenses of the Trustees who are not
considered "interested persons" as defined in the Investment Company Act of 1940
(including counsel fees) and extraordinary expenses. The annual rate at which
this fee is assessed is determined monthly in a two-step process: First, a fee
rate schedule is applied to the assets of all of the funds in the Fund's
investment category which are managed by ACIM (the "Investment Category Fee").
The overall investment objective of each Fund determines its Investment
Category. The three investment categories are: the Money Market Fund Category,
the Bond Fund Category and the Equity Fund Category. The GNMA Fund is included
in the Bond Fund Category. Second, a separate fee rate schedule is applied to
the assets of all of the funds managed by ACIM (the "Complex Fee"). The
Investment Category Fee and the Complex Fee are then added to determine the
unified management fee rate. The management fee is paid monthly by each Fund
based on each Fund's aggregate average daily net assets during the previous
month multiplied by the monthly management fee rate.

The annualized Investment Category Fee schedule for the Fund is as follows:

0.3600% of the first $1 billion
0.3080% of the next $1 billion
0.2780% of the next $3 billion
0.2580% of the next $5 billion
0.2450% of the next $15 billion
0.2430% of the next $25 billion
0.2425% of the average daily net assets over $50 billion

The annualized Complex Fee schedule (for all Funds) is as follows:

Total expenses of $1,171,405 were incurred under the new management
agreement and were included in Investment Advisory Fees in the Statement of
Operations. Total expenses and the annualized ratio of operating expenses to
average net assets for the four months ended July 31, 1997 were $2,138,296 and
0.56%, respectively.

- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS

Purchases of U.S. Treasury and Agency obligations, excluding short-term
investments, totaled $621,633,240. Sales of U.S. Treasury and Agency
obligations, excluding short-term investments, totaled $584,657,107.

As of September 30, 1997, accumulated net unrealized appreciation was
$23,683,979, based on the aggregate cost of investments of $1,172,436,823 for
federal income tax purposes. Accumulated net unrealized appreciation consisted
of unrealized appreciation of $26,173,251 and unrealized depreciation of
$2,489,272.

14 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

For a Share Outstanding Throughout the Years Ended March 31 (except as noted)

1997(1) 1997 1996 1995 1994 1993
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ........... $10.33 $10.45 $10.18 $10.35 $10.88 $10.52
------- ------- ------- ------- ------- -------
Income From
Investment Operations

Net Investment Income ....... 0.35 0.71 0.74 0.72 0.66 0.79

Net Realized and
Unrealized Gain
(Loss) on Investment
Transactions ................ 0.30 (0.12) 0.27 (0.18) (0.52) 0.36
------- ------- ------- ------- ------- -------
Total From
Investment Operations ....... 0.65 0.59 1.01 0.54 0.14 1.15
------- ------- ------- ------- ------- -------
Distributions

From Net Investment
Income ...................... (0.35) (0.71) (0.74) (0.71) (0.66) (0.79)

From Net Realized
Capital Gains ............... -- -- -- -- (0.01) --
------- ------- ------- ------- ------- -------
Total Distributions ......... (0.35) (0.71) (0.74) (0.71) (0.67) (0.79)
------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period ................. $10.63 $10.33 $10.45 $10.18 $10.35 $10.88
======== ======== ======== ======== ======== ========
Total Return(2) ............. 6.40% 5.87% 10.08% 5.53% 1.30% 11.28%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(3) ......0.57%(4) 0.55% 0.58% 0.58% 0.54% 0.56%

Ratio of Net Investment
Income to Average

Net Assets ....................6.68%(4) 6.84% 6.98% 7.08% 6.12% 7.31%

Portfolio Turnover Rate ....... 52% 105% 64% 120% 49% 71%

Net Assets, End
of Period (in thousands) .....$1,202,200 $1,119,165 $1,120,019 $979,670 $1,129,185 $1,159,754
</TABLE>
- ----------
(1) Six months ended September 30, 1997 (unaudited).

(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 ratios for years ended March 31, 1997 and March 31, 1996, include
expenses paid through expense offset arrangements.

(4) Annualized.

See Notes to Financial Statements

SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS 15

PROXY VOTING RESULTS

An annual meeting of shareholders was held on July 30, 1997, to vote on the
following proposals. All of the proposals received the required majority of
votes and were adopted.

A summary of voting results is listed below each proposal.

PROPOSAL 1:

To vote on the selection by the Board of Trustees of Coopers & Lybrand LLP
as independent auditors for the Trust.

For: 65,492,634
Withheld: 1,259,021
Abstain: 1,140,842

PROPOSAL 2:

To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.

For: 60,947,780
Against: 3,241,128
Abstain: 1,875,330
Broker Non-Vote: 1,828,259

PROPOSAL 3:

To vote on the adoption of standardized investment limitations for the
following items:

* Amend the fundamental investment limitation concerning the issuance of senior
securities.

For: 59,852,798
Against: 3,791,670
Abstain: 2,419,770
Broker Non-Vote: 1,828,259

* Amend the fundamental investment limitation concerning borrowing.

For: 59,623,423
Against: 4,002,705
Abstain: 2,438,110
Broker Non-Vote: 1,828,259

* Amend the fundamental investment limitation concerning lending.

For: 59,560,543
Against: 4,086,817
Abstain: 2,416,878
Broker Non-Vote: 1,828,259

* Eliminate the fundamental investment limitation regarding investments in
illiquid securities.

For: 59,204,255
Against: 4,470,669
Abstain: 2,389,314
Broker Non-Vote: 1,828,259

* Eliminate the fundamental limitation concerning investment in other investment
companies.

For: 59,634,193
Against: 4,064,268
Abstain: 2,365,777
Broker Non-Vote: 1,828,259

* Amend the fundamental investment limitation concerning underwriting.

For: 59,608,466
Against: 4,002,341
Abstain: 2,453,431
Broker Non-Vote: 1,828,259

16 PROXY VOTING RESULTS AMERICAN CENTURY INVESTMENTS

PROXY VOTING RESULTS

* Amend the fundamental investment limitation concerning commodities.

For: 59,278,835
Against: 4,329,534
Abstain: 2,455,869
Broker Non-Vote: 1,828,259

* Eliminate the fundamental limitation concerning short sales.

For: 59,331,146
Against: 4,315,607
Abstain: 2,417,485
Broker Non-Vote: 1,828,259

* Eliminate the fundamental investment limitation concerning margin purchases of
securities.

For: 59,273,788
Against: 4,398,389
Abstain: 2,392,061
Broker Non-Vote: 1,828,259

* Eliminate the fundamental investment limitation concerning warrants.

For: 59,327,097
Against: 4,297,619
Abstain: 2,439,522
Broker Non-Vote: 1,828,259

* Eliminate the fundamental investment limitation concerning investments in oil,
gas and mineral exploration development programs.

For: 59,446,150
Against: 4,236,588
Abstain: 2,381,500
Broker Non-Vote: 1,828,259

* Eliminate the fundamental investment limitations concerning investments in
securities owned by officers and directors.

For: 59,137,556
Against: 4,481,371
Abstain: 2,445,311
Broker Non-Vote: 1,828,259

SEMIANNUAL REPORT PROXY VOTING RESULTS 17

RETIREMENT ACCOUNT INFORMATION

18 RETIREMENT ACCOUNT INFORMATION AMERICAN CENTURY INVESTMENTS

NOTES

SEMIANNUAL REPORT NOTES 19

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

In addition to these principles, each fund has its own investment policies:

GNMA seeks to provide a high level of current income by investing primarily
in mortgage-backed GNMA certificates.

COMPARATIVE INDICES

The following index is used in the report for fund performance comparisons.
It is not an investment product available for purchase.

The SALOMON BROTHERS 30-YEAR GNMA INDEX is a market-capitalization weighted
index of 30-year GNMA single-family mortgages.

LIPPER RANKINGS

The Lipper category for GNMA is:

GNMA FUNDS--funds that invest at least 65% of their assets in Government
National Mortgage Association (Ginnie Mae) securities.

INVESTMENT TEAM LEADERS

Portfolio Manager Casey Colton

20 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

YIELDS

INVESTMENT TERMS

* BASIS POINT--one one-hundredth of a percentage point (or 0.01%). 100 basis
points equal one percentage point (or 1%).

* COUPON--the stated interest rate of a security.

* DURATION EXTENSION--a lengthening of a mortgage-backed security's duration,
typically because of rising interest rates. When interest rates rise sharply,
higher interest rates reduce prepayments (which is good for investors), but the
lower level of prepayments causes GNMA durations to extend, which makes price
declines more severe.

* PREPAYMENT--paying off a mortgage early, often by selling or refinancing.
Prepayments occur most frequently when homeowners refinance their mortgages to
take advantage of falling interest rates. Prepayments shorten the lives of
mortgage portfolios and force GNMA investors to reinvest in lower-yielding
mortgage pools. Therefore, when prepayment levels climb, mortgage analysts
increase the prepayment assumptions used to price mortgage-backed securities. As
a result, mortgage-backed security durations shorten, limiting the price gains
from falling interest rates.

STATISTICAL TERMINOLOGY

* NUMBER OF SECURITIES--the number of different securities held by a fund on a
given date.

* AVERAGE DURATION-- a time-weighted average of the interest and principal
payments of the securities in a portfolio. As the duration of a portfolio
increases, so does the impact of a change in interest rates on the value of the
portfolio.

* AVERAGE LIFE--a measurement of the sensitivity of a mortgage-backed securities
portfolio to interest rate changes. Although it is similar to weighted average
maturity, average life takes into account the gradual payments of principal that
occur with mortgage-backed securities. As a result, average life is a better
measure of interest rate sensitivity for mortgage-backed securities.

* EXPENSE RATIO--the operating expenses of the fund, expressed as a percentage
of average net assets.

TYPES OF SECURITIES

* GOVERNMENT NATIONAL MORTGAGE ASSOCIATION SECURITIES (GNMAS)--mortgage-backed
securities issued by the Government National Mortgage Association, a U.S.
government agency. A GNMA is backed by a pool of fixed-rate mortgages. A GNMA is
also backed by the full faith and credit of the U.S. government as to the timely
payment of interest and principal. This means GNMA investors will receive their
share of interest and principal payments whether or not borrowers make their
scheduled mortgage payments.

* REPURCHASE AGREEMENTS (REPOS)--short-term debt agreements in which a fund buys
a security at one price and simultaneously agrees to sell it back to the seller
at a slightly higher price on a specified date (usually within seven days).

* U.S. GOVERNMENT AGENCY DISCOUNT NOTES--short-term debt securities issued by
U.S. government agencies. Some agency discount notes are backed by the full
faith and credit of the U.S. government, while most are guaranteed only by the
issuing agency. These notes are issued at a discount and achieve full value at
maturity (typically one year or less).

SEMIANNUAL REPORT GLOSSARY 21

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

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

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

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: www.americancentury.com

AMERICAN CENTURY GOVERNMENT INCOME TRUST

INVESTMENT MANAGER

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

KANSAS CITY, MISSOURI

AMERICAN CENTURY INVESTMENT SERVICES, INC.

9711 [recycled logo]
SH-BKT-10281 Recycled
<PAGE>
[BOOK FOUR]

SEMIANNUAL
REPORT

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

SEPTEMBER 30, 1997

BENHAM
GROUP

Inflation-Adjusted Treasury

TABLE OF CONTENTS

We welcome your comments or questions about this report. See the back cover for
ways to contact us by mail, phone or e-mail.

Twentieth Century and American Century are registered marks of American Century
Services Corporation. Benham Group is a registered mark of Benham Management
Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

MARKET PERSPECTIVE

* Inflation-indexed Treasury securities produced positive returns during the
six months ended September 30, 1997, but they trailed the returns of nominal
(i.e., normal fixed-coupon) Treasury bonds.

* The main reason for this performance disparity was low inflation, which
reduced demand for the inflation protection of inflation-indexed bonds.

* Low inflation also meant small adjustments to the principal value of these
securities. The principal adjustments totaled 1.2% during the six-month
period (a 2.4% annual rate).

* The yield on inflation-indexed bonds was relatively stable during the
period, while nominal Treasury yields declined steadily.

* The Treasury issued more 10-year inflation-indexed securities in April and
followed with two auctions of five-year inflation-indexed notes in July and
October.

INFLATION-ADJUSTED TREASURY

* The fund returned 2.21% during the six-month period, nearly matching the
2.41% return of the Salomon Brothers U.S. Inflation-Linked Index.

* We invested 25% of the fund's assets in a 10-year inflation-indexed
government agency note, which offered a significantly higher yield than
10-year inflation-indexed Treasury securities.

* We also added a five-year inflation-indexed Treasury note to provide a more
broad representation of the market.

* As a result of these changes, the fund's average maturity and duration
shortened.

* Looking ahead, the bond market's low expectations for inflation have made
inflation-indexed securities more attractively valued than nominal bonds.

* Going forward, we plan to maintain the fund's current positioning, though we
may add more five-year inflation-indexed notes because they currently have
better yields and relative value than 10-year securities.

INFLATION-ADJUSTED
TREASURY

TOTAL RETURNS: AS OF 9/30/97
6 Months 2.21%*
Since Inception 0.18%*

30-DAY SEC YIELD: 4.51%

NET ASSETS: $4.0 million
(AS OF 9/30/97)

INCEPTION DATE: 2/10/97

* Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
17.

SEMIANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

During the six months ended September 30, 1997, inflation-indexed Treasury
bonds produced positive returns, though a continuing lack of inflationary
pressure in the U.S. economy caused them to underperform regular Treasury bonds.
In the following pages, the fund's investment team provides further details
about the market and how your fund was managed during the period.

In closing, we want to reassure you that American Century remains committed
to serving your investment needs first and foremost. Thank you for your trust
and confidence.

Sincerely,

/s/James E. Stowers III /s/James M. Benham
James E. Stowers III James M. Benham
Chief Executive Officer Vice Chairman
American Century Companies, Inc. American Century Companies, Inc.

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE

[line graph - data below]

10-YEAR TREASURY YIELD COMPARISONS

April '97 through September '97

10-Year 10-Year
Nominal Treasury Inflation-Indexed Treasury
4/4/97 6.91% 3.61%
4/11/97 6.97% 3.67%
4/18/97 6.83% 3.62%
4/25/97 6.94% 3.66%
5/2/97 6.62% 3.58%
5/9/97 6.68% 3.58%
5/16/97 6.70% 3.59%
5/23/97 6.74% 3.61%
5/30/97 6.67% 3.58%
6/6/97 6.50% 3.53%
6/13/97 6.44% 3.57%
6/20/97 6.38% 3.63%
6/27/97 6.46% 3.66%
7/4/97 6.31% 3.60%
7/11/97 6.23% 3.67%
7/18/97 6.24% 3.69%
7/25/97 6.19% 3.67%
8/1/97 6.19% 3.60%
8/8/97 6.38% 3.60%
8/15/97 6.24% 3.57%
8/22/97 6.36% 3.57%
8/29/97 6.34% 3.60%
9/5/97 6.36% 3.59%
9/12/97 6.29% 3.59%
9/19/97 6.09% 3.56%
9/26/97 6.08% 3.62%

Source: Bloomberg Financial Markets

INFLATION-INDEXED BONDS LAG BROADER MARKET

Inflation-indexed Treasury securities posted positive returns during the six
months ended September 30, 1997, but they trailed the performance of nominal
(i.e., normal fixed-coupon) Treasury bonds. The Salomon Brothers U.S.
Inflation-Linked Index returned 2.41% during the six-month period, while the
Salomon Brothers Treasury Index, a broad measure of Treasury bond performance,
produced an 11.57% return.

GOOD NEWS ON INFLATION. . .

The main reason for this performance disparity was U.S. inflation. At the
beginning of the six-month period, bond investors were wary of rising inflation
because of strong economic growth--the U.S. economy grew at a 5% annual rate in
the first quarter of 1997. In a pre-emptive move, the Federal Reserve raised
short-term interest rates in March to head off the perceived inflationary
threat.

But the expected inflation never materialized--the consumer price index rose
at an annual rate of just 1.8% during the six-month period, despite continued
healthy economic growth and evidence of rising wages.

. . .WAS BAD NEWS FOR INFLATION-INDEXED BONDS

Low inflation meant there was little demand for the inflation protection
provided by inflation-indexed securities. As a result, inflation-indexed
Treasury yields remained fairly stable throughout the six-month period. In
contrast, nominal Treasury bond yields declined steadily during the period.

The accompanying graph illustrates the convergence between 10-year nominal
Treasury yields and 10-year inflation-indexed yields. Nominal yields fell from
around 7% to just over 6%, while inflation-indexed yields hovered around 3.6%.

The gap between nominal and inflation-indexed yields reflects the bond
market's expectations for inflation going forward. During the period, this
"breakeven inflation rate" dipped from 3.3% to 2.5%.

INFLATION-INDEXED BOND SUPPLY GROWS

The Treasury expanded the supply of inflation-indexed securities during the
period, issuing $8 billion in 10-year securities in April. To date, the Treasury
has issued just over $15 billion in 10-year inflation-indexed notes.

The Treasury offered a different maturity at mid-year, issuing $8 billion in
five-year inflation-indexed notes in July. Another $8 billion in five-year notes
were issued in October, bringing the total supply of inflation-indexed Treasury
securities to more than $30 billion.

PRINCIPAL ADJUSTMENTS

The principal value of inflation-indexed Treasury bonds are adjusted
regularly for inflation based on the non-seasonally adjusted consumer price
index (CPI-NSA), but with a three-month lag. Therefore, the principal
adjustments for the six months ended September 30 were based on the change in
the CPI-NSA for the first six months of 1997. These principal adjustments
totaled 1.2%, which equates to a 2.4% annual rate.

SEMIANNUAL REPORT MARKET PERSPECTIVE 3

PERFORMANCE & PORTFOLIO INFORMATION

6 MONTHS LIFE OF
FUND(1)
- -------------------------------------------------------------------------
TOTAL RETURNS AS
OF SEPTEMBER 30, 1997

Inflation-Adjusted Treasury .......... 2.21% 0.18%

Salomon Brothers Treasury Index ...... 11.57% 8.84%(2)

Salomon Brothers U.S.
Inflation-Linked Index ............... 2.41% 1.01%(2)

- ----------
(1) Inception date was February 10, 1997.

(2) Returns since 2/28/97, the date nearest the fund's inception for which
return data are available.

Returns for periods less than one year are not annualized.
See pages 16-17 for more information about returns and the comparative indices.

[mountain graph - data below]

Growth of $10,000 Over Life of Fund

$10,000 investment made 2/28/97

Value on 9/30/97
Inflation-Adjusted Salomon Inflation-Linked Salomon Treasury
Treasury Index Index
Feb-97 $10,000 $10,000 $10,000
Mar-97 $9,858 $9,863 $9,756
Apr-97 $9,921 $9,932 $9,981
May-97 $9,977 $9,984 $10,099
Jun-97 $9,942 $9,953 $10,291
Jul-97 $10,034 $10,044 $10,896
Aug-97 $10,061 $10,076 $10,589
Sep-97 $10,076 $10,101 $10,884

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost. This graph begins on 2/28/97, the date nearest the fund's 2/10/97
inception date for which index return data are available.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.

PORTFOLIO AT A GLANCE
9/30/97 3/31/97

Number of Securities 3 1
Weighted Average Maturity 7.8 years 9.8 years
Average Duration 6.6 years 8.0 years
Expense Ratio 0.49%* 0.50%*

* Annualized.

YIELD AS OF SEPTEMBER 30, 1997
30-DAY
SEC
YIELD
Inflation-Adjusted Treasury 4.51%

Yield is defined in the Glossary on page 17.

4 PERFORMANCE & PORTFOLIO INFORMATION AMERICAN CENTURY INVESTMENTS

MANAGEMENT Q&A

An interview with Dave Schroeder, a portfolio manager on the Benham Treasury
funds investment team.

HOW DID THE FUND PERFORM?

The fund's return reflected the modestly positive performance of
inflation-indexed securities in general. For the six months ended September 30,
1997, the fund had a total return of 2.21%, compared with the 2.41% return of
the Salomon Brothers U.S. Inflation-Linked Index. (See the Total Returns table
on the previous page for other fund performance comparisons.)

HOW DID THE FUND'S PORTFOLIO CHANGE DURING THE SIX-MONTH PERIOD?

We added an inflation-indexed government agency note, and we adjusted the
fund's Treasury holdings to be more representative of the inflation-indexed
Treasury market.

LET'S START WITH THE GOVERNMENT AGENCY NOTE. WHY DID YOU INVEST IN THIS
SECURITY?

To enhance the fund's yield. Securities issued by government agencies tend
to offer higher yields than those issued by the Treasury, and this holds true
among inflation-indexed securities. Since the fund has some flexibility to
purchase non-Treasury securities, we took advantage of the opportunity to
increase the fund's yield.

We purchased a 10-year inflation-indexed note issued by the Tennessee Valley
Authority (TVA). This security offered a yield that was 20 basis points higher
than 10-year inflation-indexed Treasury notes. The TVA note currently makes up
25% of the fund's portfolio (see the chart below).

DO YOU PLAN TO INCREASE THE FUND'S HOLDINGS OF GOVERNMENT AGENCY SECURITIES IN
THE FUTURE?

Probably not. We can devote as much as 35% of fund assets to government
agency securities, and we like having the opportunity to diversify the fund's
holdings. But the fund is intended to focus primarily on the Treasury market, so
that's where we intend to invest most of its assets.

SPEAKING OF THE FUND'S TREASURY HOLDINGS, WHAT CHANGES DID YOU MAKE TO THIS PART
OF THE PORTFOLIO?

We manage the fund to provide a broad representation of the
inflation-indexed Treasury market, so we structured the fund's portfolio to
match the approximate composition of the market. To accomplish this, we
purchased a five-year inflation-indexed Treasury security shortly after they
were first auctioned in July.

As a result, the fund's Treasury holdings are now about 55% 10-year notes
and 45% five-year notes. In addition, the fund's average maturity shortened from
about 10 years to less than 8 years, and the fund's duration narrowed from 8
years to around 6.5 years.

[pie charts]

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 9/30/97)

Treasury Bonds 75%
U.S. Government
Agency Bonds 25%

PORTFOLIO COMPOSITION BY SECURITY TYPE (as of 3/31/97)

Treasury Bonds 100%

SEMIANNUAL REPORT MANAGEMENT Q & A 5

MANAGEMENT Q&A

LOOKING AHEAD, WHAT IS YOUR OUTLOOK FOR INFLATION?

It's been seven months since the Federal Reserve's pre-emptive interest rate
increase, and we've seen little sign of inflation since then. With economic
growth slowing to a more moderate pace, inflation will probably remain low
through the end of 1997.

However, wage pressures have been building as a result of sustained low
unemployment levels. (The unemployment rate dipped to a 24-year low of 4.7% in
October.) Although corporations tend to pass on higher wage costs to consumers
by raising prices, many businesses have held off to keep their prices in line
with their competitors.

The highest productivity gains in five years and cost cutting in other
areas, such as healthcare benefits, have helped these companies maintain profit
growth. But these cost savings may have run their course, which could set the
stage for rising prices in 1998.

WHAT IS YOUR OUTLOOK FOR THE INFLATION-INDEXED BOND MARKET?

We think inflation-indexed securities look relatively attractive after
underperforming the broader bond market in 1997. Our assessment is based on the
yield difference--or spread--between nominal and inflation-indexed Treasury
bonds with the same maturities. This yield spread reflects the market's
expectations for inflation going forward.

In recent weeks, the spread for 10-year securities has been as low as 230
basis points (one basis point equals 0.01%), suggesting that the market expects
the annualized inflation rate to be 2.3% over the next 10 years. This is the
lowest level for implied inflation since the Treasury first issued
inflation-indexed securities in January, and it's well below the 4% long-term
average for inflation.

We think it's unlikely that the factors keeping price increases in
check--productivity gains, lack of pricing power, cost savings on benefits--can
hold inflation down indefinitely. As a result, we believe inflation-indexed
securities offer attractive value relative to nominal Treasury bonds.

WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX MONTHS?

For the most part, we plan to maintain the fund's current positioning,
though we may look to expand the fund's holdings of five-year inflation-indexed
Treasury notes. Part of the reason is to maintain a market weighting--the recent
auction of new five-year notes balanced the existing inflation-indexed bond
market evenly between five-year notes and 10-year notes. But we also think that
five-year notes currently appear more attractive than 10-year securities--they
have a higher yield and a lower implied inflation rate, so we think they will
perform better if inflation rises going forward.

6 MANAGEMENT Q & A AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

Principal Amount Value
- --------------------------------------------------------------------------------

U.S. TREASURY SECURITIES

$1,292,722 U.S. Treasury Inflation Indexed
Notes, 3.625%, 7/15/02 $1,289,491

1,681,563 U.S. Treasury Inflation Indexed
Notes, 3.375%, 1/15/07 1,650,559
--------------------

TOTAL U.S. TREASURY SECURITIES--75.0% 2,940,050
--------------------
(Cost $2,941,410)

U.S. GOVERNMENT AGENCY SECURITIES--25.0%

1,012,990 TVA Inflation Indexed Notes,
3.375%, 1/15/07 977,697
--------------------

(Cost $979,045)

TOTAL INVESTMENT SECURITIES--100.0% $3,917,747
====================
(Cost $3,920,455)

NOTES TO SCHEDULE OF INVESTMENTS

TVA = Tennessee Valley Authority

See Notes to Financial Statements

SEMIANNUAL REPORT SCHEDULE OF INVESTMENTS 7

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 1997 (UNAUDITED)

ASSETS

Investment securities, at value
(identified cost of $3,920,455)
(Note 3) ............................................... $3,917,747

Cash ..................................................... 99,749

Interest receivable ...................................... 28,944

Prepaid expenses and
other assets ........................................... 870
-----------
4,047,310
-----------
LIABILITIES

Disbursements in excess of
demand deposit cash .................................... 4,965

Accrued management fees
(Note 2) ............................................... 1,538

Dividends payable ........................................ 2,372

Accrued expenses and
other liabilities ...................................... 822
-----------
9,697
-----------
Net Assets Applicable to
Outstanding Shares ..................................... $ 4,037,613
===========
CAPITAL SHARES

Outstanding (Unlimited
number of shares authorized) ........................... 415,045
===========
Net Asset Value Per Share ................................ $ 9.73
===========
NET ASSETS CONSIST OF:

Capital paid in .......................................... $ 4,089,815

Accumulated undistributed net
realized loss on investments ........................... (49,494)

Net unrealized depreciation
on investments (Note 3) ................................ (2,708)
-----------
$ 4,037,613
===========
See Notes to Financial Statements

8 STATEMENT OF ASSETS AND LIABILITIES AMERICAN CENTURY INVESTMENTS

STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)

INVESTMENT INCOME

Income:

Interest ................................................... $ 92,559
--------
Expenses (Note 2):

Printing and postage ....................................... 9,646

Investment advisory fees ................................... 6,586

Registration and filing fees ............................... 3,673

Trustees' fees and expenses ................................ 2,593

Transfer agency fees ....................................... 2,106

Administrative fees ........................................ 1,149

Custodian Fees ............................................. 554

Other operating expenses ................................... 536
--------
Total expenses ........................................... 26,843

Amount reimbursed .......................................... (17,651)
--------
Net expenses ............................................. 9,192
--------
Net investment income ...................................... 83,367
--------
REALIZED AND UNREALIZED
GAIN (LOSS)
ON INVESTMENTS (NOTE 3)

Net realized loss on investments ........................... (49,494)

Change in net unrealized

depreciation on investments ................................ 42,600
--------
Net realized and unrealized
loss on investments ........................................ (6,894)
--------
Net Increase in Net Assets
Resulting from Operations .................................. $ 76,473
========

See Notes to Financial Statements

SEMIANNUAL REPORT STATEMENT OF OPERATIONS 9

STATEMENTS OF CHANGES IN NET ASSETS

SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
AND PERIOD ENDED MARCH 31, 1997

Sept. 30, March 31,
Increase in Net Assets 1997 1997(1)

OPERATIONS

Net investment income ...................... $ 83,367 $ 10,540

Net realized loss
on investments ........................... (49,494) --

Change in net unrealized
depreciation on investments .............. 42,600 (45,308)
----------- -----------
Net increase (decrease) in
net assets resulting
from operations .......................... 76,473 (34,768)
----------- -----------
DISTRIBUTIONS
TO SHAREHOLDERS

From net investment income ................. (83,367) (10,540)
----------- -----------
CAPITAL SHARE TRANSACTIONS

Proceeds from shares sold .................. 3,103,613 2,627,000

Proceeds from reinvestment
of distributions ......................... 74,712 8,426

Payments for shares redeemed ............... (1,411,194) (312,742)
----------- -----------
Net increase in net assets from
capital share transactions ............... 1,767,131 2,322,684
----------- -----------

Net increase in net assets ................. 1,760,237 2,277,376

NET ASSETS

Beginning of period ........................ 2,277,376 --
----------- -----------
End of period .............................. $ 4,037,613 $ 2,277,376
=========== ===========
TRANSACTIONS IN SHARES
OF THE FUND

Sold ....................................... 318,836 264,716

Issued in reinvestment
of distributions ......................... 7,682 861

Redeemed ................................... (145,236) (31,814)
----------- -----------
Net increase ............................... 181,282 233,763
=========== ===========

(1) February 10, 1997 (inception) through March 31, 1997.

See Notes to Financial Statements

10 STATEMENTS OF CHANGES IN NET ASSETS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Government Income Trust (the Trust) is
registered under the Investment Company Act of 1940 as an open-end diversified
management investment company. American Century - Benham Inflation-Adjusted
Treasury Fund (the Fund) is one of the eight funds issued by the Trust. The
Fund's investment objective is to provide a total return consistent with
investment in U.S. Treasury inflation-adjusted securities. The Fund may also
invest in U.S. Treasury securities which are not indexed to inflation for
liquidity and total return, or if at any time the manager believes there is an
inadequate supply of appropriate Treasury inflation-adjusted securities in which
to invest. The following significant accounting policies, related to the Fund,
are in accordance with accounting policies generally accepted in the investment
company industry.

INVESTMENT INCOME--Interest income is recorded on the accrual basis and
includes amortization of discounts and premiums. Discounts and premiums are
amortized using the effective interest rate method. The difference between
original principal and the inflation-adjusted principal is amortized on a
straight-line basis and is included in interest income.

DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income are
declared daily and distributed monthly. Distributions from net realized gains
are declared and paid annually.

SUPPLEMENTARY INFORMATION--Certain officers and trustees of the Trust are
also officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc., the parent of the Trust's investment manager,
American Century Investment Management, Inc. (ACIM), the Trust's distributor,
American Century Investment Services, Inc., and the Trust's transfer agent,
American Century Services Corporation (ACSC).

SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 11

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The shareholders of the Fund approved a new management agreement with ACIM
on July 30, 1997, effective August 1, 1997, which replaced the previously
existing contracts between the Fund and Benham Management Corporation and ACSC
for advisory, administrative and transfer agency services. Under the agreement,
ACIM provides all services required by the Fund in exchange for one "unified"
management fee. Expenses excluded from this agreement are brokerage, taxes,
portfolio insurance, interest, fees and expenses of those Trustees who are not
considered "interested persons" as defined in the Investment Company Act of 1940
(including counsel fees) and extraordinary expenses. The annual rate at which
this fee is assessed is determined monthly in a two-step process: First, a fee
rate schedule is applied to the assets of all of the funds in the Fund's
investment category which are managed by ACIM (the "Investment Category Fee").
The overall investment objective of the Fund determines its Investment Category.
The three investment categories are: the Money Market Fund Category, the Bond
Fund Category and the Equity Fund Category. The Fund is in the Bond Fund
Category. Second, a separate fee rate schedule is applied to the assets of all
of the funds managed by ACIM (the "Complex Fee"). The Investment Category Fee
and the Complex Fee are then added to determine the unified management fee rate.
The management fee is paid monthly by the Fund based on the Fund's aggregate
average daily net assets during the previous month multiplied by the monthly
management fee rate.

The annualized Investment Category fee for the Fund is as follows:

The annualized Complex Category fee schedule is as follows:

ACIM has agreed to continue to waive expenses which exceed 0.50% of average
daily net assets. Total expenses of $4,053, of which $956 were waived by ACIM,
were incurred under the new management agreement and are included in Investment
Advisory Fees in the Statement of Operations. Total expenses, under the previous
agreement, for the four months ended July 31, 1997 were $22,790, of which
$16,695 were waived by Benham Management Corporation. The ratio of operating
expenses to average net assets, net of the amount waived, for the same period
was 0.50%.

- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS

Purchases and sales of U.S. Treasury and Agency obligations, excluding
short-term investments, totaled $4,439,551 and $2,600,002, respectively.

As of September 30, 1997, accumulated net unrealized depreciation was
$2,708, consisting of $2,674 of unrealized appreciation and $5,382 of unrealized
depreciation. The aggregate cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes.

12 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

FINANCIAL HIGHLIGHTS

For a Share Outstanding Throughout the Periods as Indicated

1997(1) 1997(2)
PER-SHARE DATA

Net Asset Value,
Beginning of Period ........................ $9.74 $10.00
----------- ----------
Income From

Investment Operations

Net Investment Income .................... 0.22 0.06

Net Unrealized Loss on
Investment Transactions .................. (0.01) (0.26)
----------- ----------
Total From Investment
Operations ............................... 0.21 (0.20)
----------- ----------
Distributions

From Net Investment Income ............... (0.22) (0.06)
----------- ----------
Net Asset Value, End of Period ............. $9.73 $9.74
=========== ==========
Total Return(3) .......................... 2.21% (1.98)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets(4) ...................... 0.49% 0.50%

Ratio of Net Investment Income
to Average Net Assets(4) ................... 4.47% 5.03%

Portfolio Turnover Rate .................... 78% --

Net Assets, End of
Period (in thousands) ...................... $4,038 $2,277

- ----------
(1) Six months ended September 30, 1997 (unaudited).

(2) February 10, 1997 (inception) through March 31, 1997.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any, and are not annualized.

(4) Annualized.

See Notes to Financial Statements

SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS 13

PROXY VOTING RESULTS

An annual meeting of shareholders was held on July 30, 1997, to vote on the
following proposals. All of the proposals received the required majority of
votes and were adopted.

A summary of voting results is listed below each proposal.

PROPOSAL 1:

To vote on the selection by the Board of Directors of Coopers & Lybrand LLP
as independent auditors for the Companies.

For: 264,802
Withheld: 2,075
Abstain: 0

PROPOSAL 2:

To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.

For: 265,312
Against: 1,565
Abstain: 0

PROPOSAL 3:

To vote on the adoption of standardized investment limitations.

* Eliminate the fundamental investment limitation concerning diversification
of investments.

For: 243,013
Against: 18,741
Abstain: 5,123
Broker Non-Vote: 0

* Amend the fundamental investment limitation concerning the issuance of
senior securities.

For: 242,373
Against: 19,381
Abstain: 5,123
Broker Non-Vote: 0

* Amend the fundamental investment limitation concerning borrowing.

For: 243,013
Against: 18,741
Abstain: 5,123
Broker Non-Vote: 0

* Amend the fundamental investment limitation concerning commodities.

For: 243,013
Against: 18,741
Abstain: 5,123
Broker Non-Vote: 0

* Eliminate the fundamental investment limitation concerning investment in
oil, gas and mineral exploration development programs.

For: 243,013
Against: 18,741
Abstain: 5,123
Broker Non-Vote: 0

14 PROXY VOTING RESULTS AMERICAN CENTURY INVESTMENTS

RETIREMENT ACCOUNT INFORMATION

SEMIANNUAL REPORT RETIREMENT ACCOUNT INFORMATION 15

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

In addition to these principles, each fund has its own investment policies:

INFLATION-ADJUSTED TREASURY seeks current income by investing primarily in
inflation-protected securities issued by the U.S. Treasury. The fund has no
average maturity limitations.

COMPARATIVE INDICES

The indices listed below are used in the report for fund performance
comparisons. They are not investment products available for purchase.

The SALOMON BROTHERS TREASURY INDEX is an index of U.S. Treasury securities
with maturities greater than 10 years.

The SALOMON BROTHERS U.S. INFLATION-LINKED INDEX is an index of
inflation-linked U.S. Treasury securities.

- --------------------------------------------------------------------------------
INVESTMENT TEAM LEADERS
- -----------------------
Portfolio Manager Dave Schroeder
- --------------------------------------------------------------------------------

16 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

YIELDS

* 30-DAY SEC YIELD represents net investment income earned by the fund over a
30-day period, expressed as an annual percentage rate based on the fund's share
price at the end of the 30-day period. The fund's net investment income includes
both interest and the principal adjustment on inflation-indexed securities. The
SEC yield should be regarded as an estimate of the fund's rate of investment
income, and it may not equal the fund's actual income distribution rate, the
income paid to a shareholder's account, or the income reported in the fund's
financial statements.

PORTFOLIO STATISTICS

* NUMBER OF SECURITIES--the number of different securities held by a fund on a
given date.

* AVERAGE DURATION--another measure of the sensitivity of a fixed-income
portfolio to interest rate changes. Duration is a time-weighted average of the
interest and principal payments of the securities in a portfolio. As the
duration of the fund increases, so does the impact of a change in real yields on
the value of the fund's portfolio.

INVESTMENT TERMS

* COUPON--the stated interest rate of a security.

SECURITY TYPES

* U.S. TREASURY INFLATION-INDEXED SECURITIES--debt securities issued by the U.S.
Treasury and backed by the direct "full faith and credit" pledge of the U.S.
government. Inflation-indexed bonds have lower interest rates than normal
Treasury bonds with similar maturities. But unlike ordinary bonds,
inflation-indexed bonds' principal value is adjusted regularly for inflation
based on the consumer price index. As a result, the amount of interest paid out
changes with the principal adjustments.

SEMIANNUAL REPORT GLOSSARY 17

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

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

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

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: www.americancentury.com

AMERICAN CENTURY GOVERNMENT INCOME TRUST

INVESTMENT MANAGER

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

KANSAS CITY, MISSOURI

AMERICAN CENTURY INVESTMENT SERVICES, INC.

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