AMERICAN CENTURY GOVERNMENT INCOME TRUST, 485BPOS, 1998-07-31

AMERICAN CENTURY GOVERNMENT INCOME TRUST
485BPOS, 1998-07-31

Previous: CIRCUIT SYSTEMS INC, 8-K, 1998-07-31

Next: PALLET MANAGEMENT SYSTEMS INC, 3, 1998-07-31

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

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

File No. 2-99222

Pre-Effective Amendment No. ____

Post-Effective Amendment No._36_ X
-----
and/or

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

File No. 811-4363

Amendment No._37_

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

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

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

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

Approximate Date of Proposed Public Offering:
(first offered 9/23/85)

It is proposed that this filing become effective:

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

- --------------------------------------------------------------------------------
Registrant has elected to register an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. On June 11, 1998, the Registrant filed a Rule
24f-2 Notice on Form 24f-2 with respect to its fiscal year ended March 31, 1998.
<PAGE>
AMERICAN CENTURY GOVERNMENT INCOME TRUST
1933 Act Post-Effective Amendment No. 36
1940 Act Amendment No. 37

FORM N-1A
CROSS-REFERENCE SHEET

PART A: PROSPECTUS - Investor

ITEM PROSPECTUS CAPTION

1 Cover Page; Investment Objectives of the Funds

2 Transaction and Operating Expense Table

3 Financial Highlights; Performance Advertising

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

5 Management

5A Not Applicable

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

7 Cover Page; Distribution of Fund Shares; How to Open an Account; How
to Purchase and Sell American Century Funds; Share Price; Transfer and
Administrative Services

8 How to Redeem Shares; Transfer and Administrative Services

9 Not Applicable

PART A: PROSPECTUS - Advisor

ITEM PROSPECTUS CAPTION

1 Cover Page; Investment Objectives of the Funds

2 Transaction and Operating Expense Table

3 Financial Highlights; Performance Advertising; Performance Information
of Other Class

5 Management

5A Not Applicable

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

7 Cover Page; Distribution of Fund Shares; How to Purchase and Sell
American Century Funds; Share Price; Transfer and Administrative
Services

PART B: STATEMENT OF ADDITIONAL INFORMATION

ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION

10 Cover Page

11 Table of Contents

12 Not Applicable

13 Investment Policies and Techniques; Investment Restrictions; Portfolio
Transactions

14 Trustees and Officers

15 Additional Purchase and Redemption Information; Trustees and Officers

16 Management; Transfer and Administrative Services; About the Trust

17 Portfolio Transactions

18 About the Trust

19 Additional Purchase and Redemption Information; Valuation of Portfolio
Securities

20 Taxes

21 Additional Purchase and Redemption Information

22 Performance

23 Cover Page
<PAGE>
PROSPECTUS

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

AUGUST 1, 1998

BENHAM
GROUP(reg.tm)

Capital Preservation
Government Agency
Short-Term Treasury
Intermediate-Term Treasury
Long-Term Treasury
Short-Term Government
GNMA Fund
Inflation-Adjusted Treasury

INVESTOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

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

AMERICAN CENTURY INVESTMENTS--FAMILY OF FUNDS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Capital Preservation
Government Agency
Short-Term Treasury
Intermediate-Term Treasury
Long-Term Treasury
Short-Term Government
GNMA Fund
Inflation-Adjusted Treasury

PROSPECTUS

AUGUST 1, 1998

Capital Preservation * Government Agency *
Short-Term Treasury * Intermediate-Term Treasury *
Long-Term Treasury * Short-Term Government *
GNMA Fund * Inflation-Adjusted Treasury

INVESTOR CLASS

AMERICAN CENTURY GOVERNMENT INCOME TRUST

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

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

This Prospectus gives you information about the funds that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated August 1, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:

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

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

INVESTMENTS IN THE FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT OR ANY OTHER AGENCY. THERE IS NO ASSURANCE THAT THE MONEY MARKET
FUNDS WILL BE ABLE TO MAINTAIN A $1.00 SHARE PRICE.

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

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY--BENHAM CAPITAL
PRESERVATION FUND

Capital Preservation is a money market fund which seeks maximum safety and
liquidity. Its secondary objective is to seek to pay shareholders the highest
rate of return on their investment in the fund consistent with safety and
liquidity. The fund 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 and maintaining a dollar-weighted
average portfolio maturity of not more than 90 days.

AMERICAN CENTURY--BENHAM GOVERNMENT AGENCY
MONEY MARKET FUND

Government Agency is a money market fund which 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 income from
which is exempt from state taxes.

AMERICAN CENTURY--BENHAM SHORT-TERM
TREASURY FUND

Short-Term Treasury 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
primarily in securities issued or guaranteed by the U.S. Treasury and
maintaining a weighted average portfolio maturity ranging from 13 months to
three years.

AMERICAN CENTURY--BENHAM INTERMEDIATE-TERM
TREASURY FUND

Intermediate-Term Treasury 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 objective by investing primarily in securities issued or guaranteed
by the U.S. Treasury and maintaining a weighted average portfolio maturity,
which ranges from three to 10 years.

AMERICAN CENTURY--BENHAM LONG-TERM
TREASURY FUND

Long-Term Treasury seeks to provide a consistent and high level of current
income exempt from state taxes. The fund intends to pursue its investment
objective by investing primarily in securities issued or guaranteed by the U.S.
Treasury and maintaining a weighted average portfolio maturity ranging from 20
to 30 years.

AMERICAN CENTURY--BENHAM SHORT-TERM
GOVERNMENT FUND

Short-Term Government seeks to provide investors with a high level of
current income, consistent with stability of principal. The fund intends to
pursue its investment objective by investing in securities of the U.S.
government and its agencies and maintaining a weighted average duration of three
years or less.

The fund was previously known as "American Century-Benham Adjustable Rate
Government Securities Fund."

AMERICAN CENTURY--BENHAM GNMA FUND

The GNMA 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.

AMERICAN CENTURY -- BENHAM INFLATION-ADJUSTED
TREASURY FUND

Inflation-Adjusted Treasury seeks to provide a total return consistent with
investment in U.S. Treasury inflation-adjusted securities.

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

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

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

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

INFORMATION REGARDING THE FUNDS

Investment Policies of the Funds ........................................... 13
The Money Market Funds ..................................................... 13
Capital Preservation .................................................... 13
Government Agency ....................................................... 13
The U.S. Treasury Funds .................................................... 13
Short-Term Treasury, Intermediate-Term Treasury,
Long-Term Treasury ................................................... 13
Inflation-Adjusted Treasury ............................................. 14
The Government Agency Funds ................................................ 15
Short-Term Government ................................................... 15
GNMA Fund ............................................................... 15
Risk Factors and Investment Techniques ..................................... 15
U.S. Government Securities .............................................. 15
Mortgage-Backed Securities .............................................. 16
Adjustable-Rate Mortgage Securities ..................................... 16
Collateralized Mortgage Obligations ..................................... 17
Stripped Mortgage-Backed Securities ..................................... 17
Inflation-Indexed Treasury Securities ................................... 17
Repurchase Agreements ................................................... 19
Other Investment Practices, Their Characteristics
and Risks .................................................................. 19
Portfolio Turnover ...................................................... 19
When-Issued and Forward Commitment
Agreements ........................................................... 20
Cash Management ......................................................... 20
Other Techniques ........................................................ 20
Performance Advertising .................................................... 20

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

American Century Investments ............................................... 22
Investing in American Century .............................................. 22
How to Open an Account ..................................................... 22
By Mail ......................................................... 22
By Wire ......................................................... 22
By Exchange ..................................................... 23
In Person ....................................................... 23
Subsequent Investments ............................................... 23
By Mail ......................................................... 23
By Telephone .................................................... 23
By Online Access ................................................ 23
By Wire ......................................................... 23
In Person ....................................................... 23
Automatic Investment Plan ............................................ 23
How to Exchange From One Account to Another ................................ 23
By Mail ......................................................... 24
By Telephone .................................................... 24
By Online Access ................................................ 24
How to Redeem Shares ....................................................... 24
By Mail ......................................................... 24
By Telephone .................................................... 24
By Check-A-Month ................................................ 24
Other Automatic Redemptions ..................................... 24
Redemption Proceeds .................................................. 24
By Check ........................................................ 24
By Wire and ACH ................................................. 24
Redemption of Shares in Low-Balance Accounts ......................... 25
Signature Guarantee ........................................................ 25
Special Shareholder Services ............................................... 25
Automated Information Line ...................................... 25
Online Account Access ........................................... 25
CheckWriting .................................................... 25
Open Order Service .............................................. 26
Tax-Qualified Retirement Plans .................................. 26
Important Policies Regarding Your Investments .............................. 26
Reports to Shareholders .................................................... 27
Employer-Sponsored Retirement Plans and
Institutional Accounts .................................................. 27

ADDITIONAL INFORMATION YOU SHOULD KNOW

Share Price ................................................................ 28
When Share Price Is Determined .......................................... 28
How Share Price Is Determined ........................................... 28
Where to Find Information About Share Price ............................. 29
Distributions .............................................................. 29
Taxes ...................................................................... 29
Tax-Deferred Accounts ................................................... 29
Taxable Accounts ........................................................ 30
Management ................................................................. 31
Investment Management ................................................... 31
Code of Ethics .......................................................... 32
Transfer and Administrative Services .................................... 32
Year 2000 Issues ........................................................ 33
Distribution of Fund Shares ................................................ 33
Further Information About American Century ................................. 33

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>

<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE

Capital
Preservation, Short-Term
Government Inflation-Adjusted Short-Term Intermediate-Term Long-Term Government,
Agency Treasury Treasury Treasury Treasury GNMA Fund

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

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

Management Fees(2) ................... 0.48% 0.51% 0.51% 0.51% 0.51% 0.59%
12b-1 Fees ........................... none none none none none none
Other Expenses ....................... 0.00%(3) 0.13% 0.02% 0.00%(3) 0.01% 0.00%(3)
Total Fund Operating Expenses ........ 0.48% 0.64% 0.53% 0.51% 0.52% 0.59%

EXAMPLE:

You would pay the following
expenses on a $1,000 1 year $ 5 $ 7 $ 5 $ 5 $ 5 $ 6
investment, assuming a 3 years 15 20 17 16 17 19
5% annual return and 5 years 27 36 30 29 29 33
redemption at the end of 10 years 60 80 66 64 65 74
each time period:
</TABLE>

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

(2) A portion of the management fee may be paid by American Century Investment
Management, Inc. to unaffiliated third parties who provide recordkeeping
and administrative services that would otherwise be performed by an
affiliate of the manager. See "Management - Transfer and Administrative
Services," page 32.

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

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

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

The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions, or 12b-1 fees. The funds offer
one other class of shares, primarily to institutional investors, that has a
different fee structure than the Investor Class. The difference in the fee
structures among the classes is the result of their separate arrangements for
shareholder and distribution services and not the result of any difference in
amounts charged by the manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class. A
difference in fees will result in different performance for the other class. For
additional information about the various classes, see "Further Information About
American Century," page 33.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CAPITAL PRESERVATION

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

1998 1997 1996 1995 1994 1993(1) 1992 1991 1990 1989

PER-SHARE DATA

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

Net Investment
Income ................. 0.05 0.05 0.05 0.04 0.03 0.01 0.04 0.06 0.08 0.08
---- ---- ---- ---- ---- ---- ---- ---- ---- ----

Distributions

From Net
Investment Income ...... (0.05) (0.05) (0.05) (0.04) (0.03) (0.01) (0.04) (0.06) (0.08) (0.08)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----

Net Asset Value,
End of Period ............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====

Total Return(2) ........ 5.06% 4.82% 5.21% 4.31% 2.63% 1.35% 3.88% 6.27% 7.77% 8.27%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to Average
Net Assets(3) ............ 0.49% 0.49% 0.51% 0.50% 0.51% 0.50%(4) 0.51% 0.52% 0.56% 0.57%

Ratio of Net
Investment Income
to Average
Net Assets ............... 4.90% 4.66% 5.07% 4.24% 2.59% 2.68%(4) 3.82% 6.03% 7.50% 8.00%

Net Assets, End
of Period
(in millions) ............ $3,145 $2,978 $3,078 $2,883 $2,787 $2,943 $3,046 $3,376 $3,099 $2,737
</TABLE>

(1) 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.

(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.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
GOVERNMENT AGENCY

1998 1997 1996 1995 1994 1993 1992 1991 1990(1)

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Period ................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- ----- ----- -----

Income From Investment Operations

Net Investment Income ............. 0.05 0.05 0.05 0.04 0.03 0.03 0.05 0.07 0.03
---- ---- ---- ---- ---- ---- ---- ---- ----

Distributions

From Net Investment Income ........ (0.05) (0.05) (0.05) (0.04) (0.03) (0.03) (0.05) (0.07) (0.03)
----- ----- ----- ----- ----- ----- ----- ----- -----

Net Asset Value, End of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== =====

Total Return(2) ................... 5.14% 4.89% 5.35% 4.47% 2.69% 3.07% 5.29% 7.97% 2.65%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(3) ............ 0.51% 0.57% 0.51% 0.50% 0.50% 0.50% 0.30% -- --

Ratio of Net Investment Income
to Average Net Assets ............... 5.02% 4.76% 5.20% 4.35% 2.65% 3.04% 5.17% 7.42% 8.25%(4)

Net Assets, End
of Period (in millions) ............. $488 $471 $503 $462 $562 $646 $906 $1,074 $62
</TABLE>

(1) From December 5, 1989 (inception) through March 31, 1990.

(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.

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

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

1998 1997 1996 1995 1994 1993(1)

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ...................... $ 9.68 $ 9.84 $ 9.73 $ 9.86 $ 10.04 $ 10.00
---------- ---------- ---------- ---------- ---------- ----------

Income From Investment Operations

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

Net Realized and Unrealized Gains
(Losses) on Investment Transactions .... 0.12 (0.07) 0.11 (0.13) (0.14) 0.04
---------- ---------- ---------- ---------- ---------- ----------
Total From
Investment Operations .................. 0.65 0.45 0.64 0.37 0.22 0.29
---------- ---------- ---------- ---------- ---------- ----------
Distributions

From Net Investment Income ............. (0.53) (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 .................... (0.53) (0.61) (0.53) (0.50) (0.40) (0.25)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ........... $ 9.80 $ 9.68 $ 9.84 $ 9.73 $ 9.86 $ 10.04
========== ========== ========== ========== ========== ==========

Total Return(2) ........................ 6.89% 4.62% 6.71% 3.85% 2.16% 2.79%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets .................... 0.55% 0.61% 0.67% 0.67% 0.58% --

Ratio of Net Investment Income
to Average Net Assets .................... 5.45% 5.26% 5.39% 5.22% 3.53% 4.50%(3)

Portfolio Turnover Rate .................. 140% 234% 224% 141% 262% 158%

Net Assets, End
of Period (in thousands) ................. $ 40,874 $ 35,854 $ 35,648 $ 56,090 $ 24,929 $ 14,889
</TABLE>

(1) September 8, 1992 (inception) through March 31, 1993.

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

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 7

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

1998 1997 1996 1995 1994 1993 1992 1991 1990 1989

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year .......... $ 10.06 $ 10.24 $ 9.99 $ 10.18 $ 10.73 $ 10.52 $ 10.23 $ 9.87 $ 9.63 $ 10.11
------- ------- ------- ------- ------- ------- ------- ------- ------- -------

Income From
Investment Operations

Net Investment Income .... 0.59 0.58 0.58 0.53 0.48 0.56 0.69 0.75 0.77 0.76

Net Realized and
Unrealized Gains
(Losses) on Investment
Transactions ............. 0.50 (0.18) 0.25 (0.19) (0.27) 0.69 0.29 0.36 0.24 (0.49)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total From
Investment Operations .... 1.09 0.40 0.83 0.34 0.21 1.25 0.98 1.11 1.01 0.27
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions

From Net
Investment Income ........ (0.59) (0.58) (0.58) (0.53) (0.48) (0.56) (0.69) (0.75) (0.77) (0.75)

From Net Realized
Gains on Investment
Transactions ............. -- -- -- -- (0.06) (0.48) -- -- -- --

In Excess of Net
Realized Gains on
Investment Transactions .. -- -- -- -- (0.22) -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions ...... (0.59) (0.58) (0.58) (0.53) (0.76) (1.04) (0.69) (0.75) (0.77) (0.75)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Year ................ $ 10.56 $ 10.06 $ 10.24 $ 9.99 $ 10.18 $ 10.73 $ 10.52 $ 10.23 $ 9.87 $ 9.63
======= ======= ======= ======= ======= ======= ======= ======= ======= =======

Total Return(1) .......... 11.04% 4.05% 8.42% 3.54% 1.85% 12.36% 9.92% 11.59% 10.61% 2.78%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to
Average Net Assets ......... 0.51% 0.51% 0.53% 0.53% 0.51% 0.53% 0.59% 0.73% 0.75% 0.75%

Ratio of Net Investment
Income to Average
Net Assets ................. 5.63% 5.72% 5.65% 5.35% 4.50% 5.18% 6.55% 7.49% 7.66% 7.67%

Portfolio Turnover Rate .... 194%(2) 110% 168% 92% 213% 299% 149% 70% 217% 386%

Net Assets, End
of Year (in millions) ...... $ 375 $ 329 $ 311 $ 305 $ 351 $ 392 $ 303 $ 159 $ 97 $ 72
</TABLE>

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

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

8 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

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

1998 1997 1996 1995 1994 1993(1)

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 ..................... 0.61 0.60 0.60 0.60 0.63 0.39

Net Realized and Unrealized Gains
(Losses) on Investment Transactions ....... 1.26 (0.35) 0.62 (0.33) (0.27) 0.24
----------- ----------- ----------- ----------- ----------- -----------
Total From
Investment Operations ..................... 1.87 0.25 1.22 0.27 0.36 0.63
----------- ----------- ----------- ----------- ----------- -----------
Distributions

From Net Investment Income ................ (0.61) (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 ....................... (0.61) (0.60) (0.60) (0.60) (1.22) (0.39)
----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period .............. $ 10.58 $ 9.32 $ 9.67 $ 9.05 $ 9.38 $ 10.24
=========== =========== =========== =========== =========== ===========

Total Return(2) ........................... 20.48% 2.65% 13.46% 3.25% 2.87% 6.48%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....................... 0.54% 0.60% 0.67% 0.67% 0.57% --

Ratio of Net Investment Income
to Average Net Assets ....................... 6.00% 6.28% 5.93% 6.84% 5.89% 7.18%(3)

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

Net Assets, End
of Period (in thousands) .................... $ 103,381 $ 126,570 $ 110,741 $ 34,906 $ 18,003 $ 20,975
</TABLE>

(1) September 8, 1992 (inception) through March 31, 1993.

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

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 9

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

The Financial Highlights for the year ended March 31, 1998 have been audited
by PricewaterhouseCoopers LLP, independent accountants, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before March 31, 1997, have been audited by other independent
accountants. The annual report contains additional performance information and
will be made available upon request and without charge. The information
presented reflects the reorganization of the fund through acquisition of the
assets and liabilities of American Century-Benham Short-Term Government Fund, a
series of American Century Mutual Funds, Inc., and is for a share outstanding
throughout the years ended March 31, except as noted.

1998(1) 1997 1996 1995 1994 1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2)

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Period ... $9.49 $9.47 $9.51 $9.27 $9.67 $9.61 $9.41 $9.08 $9.32 $9.42 $9.55
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Income From
Investment Operations

Net Investment
Income .............. 0.21 0.52 0.51 0.52 0.40 0.36 0.44 0.63 0.79 0.84 0.81

Net Realized and
Unrealized Gains
(Losses) on
Investment
Transactions ........(0.03) 0.02 (0.04) 0.24 (0.40) 0.06 0.20 0.33 (0.24) (0.10) (0.13)
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total From
Investment
Operations .......... 0.18 0.54 0.47 0.76 -- 0.42 0.64 0.96 0.55 0.74 0.68
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Distributions

From Net
Investment Income ...(0.21) (0.52) (0.51) (0.52) (0.40) (0.36) (0.44) (0.63) (0.79) (0.84) (0.81)

From Net Realized
Gains on Investment
Transactions ........ -- -- -- -- -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total Distributions..(0.21) (0.52) (0.51) (0.52) (0.40) (0.36) (0.44) (0.63) (0.79) (0.84) (0.81)
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value,
End of Period ........ $9.46 $9.49 $9.47 $9.51 $9.27 $9.67 $9.61 $9.41 $9.08 $9.32 $9.42
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====

Total Return(3)..... 1.95% 5.86% 5.09% 8.42% 0.07% 4.45% 6.85% 10.99% 6.28% 8.36% 7.44%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses
to Average
Net Assets ......... 0.59%(4) 0.68% 0.70% 0.70% 0.81% 1.00% 0.99%(5) 0.99%(5) 1.00% 1.00% 1.00%

Ratio of Net
Investment Income
to Average
Net Assets ......... 5.43%(4) 5.53% 5.39% 5.53% 4.17% 3.73% 4.62% 6.88% 8.64% 9.10% 8.60%

Portfolio
Turnover Rate ...... 54% 293% 246% 128% 470% 413% 391% 779% 620% 567% 578%

Net Assets, End
of Period
(in thousands) .....$808,464 $519,332 $349,772 $391,331 $396,753 $511,981 $569,430 $534,515 $455,536 $443,475 $440,380
</TABLE>

(1) The fund's fiscal year end was changed from October 31 to March 31 resulting
in a five month annual reporting period.

(2) The data presented has been restated to give effect to a 10 for 1 stock
split in the form of a stock dividend that occurred on November 13, 1993.

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

(4) Annualized.

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

10 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
GNMA FUND

1998 1997 1996 1995 1994 1993 1992 1991 1990 1989

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year ......... $10.33 $10.45 $10.18 $10.35 $10.88 $10.52 $10.21 $9.85 $9.56 $9.96
------ ------ ------ ------ ------ ------ ------ ----- ----- -----

Income From
Investment Operations

Net Investment
Income .................. 0.69 0.71 0.74 0.72 0.66 0.79 0.86 0.88 0.90 0.89

Net Realized and
Unrealized Gains
(Losses) on
Investment Transactions.. 0.34 (0.12) 0.27 (0.18) (0.52) 0.36 0.31 0.36 0.29 (0.40)
------ ------ ------ ------ ------ ------ ------ ----- ----- -----
Total From Investment
Operations .............. 1.03 0.59 1.01 0.54 0.14 1.15 1.17 1.24 1.19 0.49
------ ------ ------ ------ ------ ------ ------ ----- ----- -----
Distributions

From Net
Investment Income ....... (0.69) (0.71) (0.74) (0.71) (0.66) (0.79) (0.86) (0.88) (0.90) (0.89)

From Net Realized Gains
on Investment
Transactions ............ -- -- -- -- (0.01) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ----- ----- -----
Total Distributions ..... (0.69) (0.71) (0.74) (0.71) (0.67) (0.79) (0.86) (0.88) (0.90) (0.89)
------ ------ ------ ------ ------ ------ ------ ----- ----- -----
Net Asset Value,
End of Year ............... $10.67 $10.33 $10.45 $10.18 $10.35 $10.88 $10.52 $10.21 $9.85 $9.56
====== ====== ====== ====== ====== ====== ====== ====== ===== =====

Total Return(1) ......... 10.21% 5.84% 10.08% 5.53% 1.30% 11.28% 11.85% 13.16% 12.73% 5.07%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to Average
Net Assets(2) ............. 0.58% 0.55% 0.58% 0.58% 0.54% 0.56% 0.62% 0.72% 0.75% 0.75%

Ratio of Net
Investment Income
to Average Net Assets ..... 6.49% 6.84% 6.98% 7.08% 6.12% 7.31% 8.18% 8.85% 9.04% 9.11%

Portfolio Turnover Rate ... 133% 105% 64% 120% 49% 71% 97% 207% 433% 497%

Net Assets, End of
Year (in millions) ........ $1,286 $1,119 $1,120 $980 $1,129 $1,160 $724 $409 $290 $253
</TABLE>

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

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

PROSPECTUS FINANCIAL HIGHLIGHTS 11

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INFLATION-ADJUSTED TREASURY

1998 1997(1)

PER-SHARE DATA

<S> <C> <C>
Net Asset Value, Beginning of Period .................. $ 9.74 $ 10.00

Income From Investment Operations

Net Investment Income ............................... 0.44 0.06

Net Unrealized Losses on Investment Transactions .... (0.11) (0.26)

Total From Investment Operations .................... 0.33 (0.20)

Distributions

From Net Investment Income .......................... (0.44) (0.06)

Net Asset Value, End of Period ........................ $ 9.63 $ 9.74

Total Return(2) ..................................... 3.45% (1.98)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.50% 0.50%(3)

Ratio of Net Investment Income to Average Net Assets .. 4.45% 5.03%(3)

Portfolio Turnover Rate ............................... 69% --

Net Assets, End of Period (in thousands) .............. $ 5,279 $ 2,277
</TABLE>

(1) February 10, 1997 (inception) through March 31, 1997.

(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.

12 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

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

Each fund (except Short-Term Government and the GNMA Fund) seeks income
exempt from state taxes by investing in U.S. government securities whose
interest payments are state tax-exempt. As a result, these funds' dividend
distributions are expected to be exempt from state income tax. See page 29 for
more information on tax treatment of the funds' distributions.

THE MONEY MARKET FUNDS

Each of the Money Market Funds seeks to maintain a $1.00 share price,
although there is no guarantee they will be able to do so. Shares of the Money
Market Funds are neither insured nor guaranteed by the U.S. government.

CAPITAL PRESERVATION

Capital Preservation seeks maximum safety and liquidity. Its secondary
objective is to seek to pay its shareholders the highest rate of return on their
investment in Capital Preservation consistent with safety and liquidity. Capital
Preservation pursues 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. Capital Preservation's dollar-weighted
average portfolio maturity will not exceed 90 days.

While the risks associated with investing in short-term U.S. Treasury
securities are very low, an investment in Capital Preservation is not risk-free.

GOVERNMENT AGENCY

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 income from which is exempt from state
taxes. Under normal conditions, at least 65% of the fund's total assets are
invested in securities issued by agencies and instrumentalities of the U.S.
government. Assets not invested in these securities are invested in U.S.
Treasury securities. For temporary defensive purposes, the fund may invest up to
100% of its assets in U.S. Treasury securities. The fund's weighted average
portfolio maturity will not exceed 90 days.

The U.S. government provides varying levels of financial support to its
agencies and instrumentalities.

THE U.S. TREASURY FUNDS

SHORT-TERM TREASURY, INTERMEDIATE-TERM TREASURY, LONG-TERM TREASURY

Short-Term Treasury, Intermediate-Term Treasury and Long-Term Treasury are
quite similar to one another but can be differentiated by their dollar-weighted
average maturities. Among these funds, the longer its dollar-weighted average
maturity, the more its share price will fluctuate when interest rates change.

This pattern is due, in part, to the time value of money. A bond's worth is
determined in part by the present value of its future cash flows. Consequently,
changing interest rates have a greater effect on the present value of a
long-term bond than a short-term bond. Because of this interplay between market
interest rates and share price, investors are encouraged to evaluate fund
performance on the basis of total return.

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

The investment objectives of the funds are as follows: Short-Term Treasury
seeks to earn and distribute the highest level of current income exempt from
state income taxes as is consistent with preservation of capital.
Intermediate-Term Treasury 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. Long-Term Treasury seeks to
provide a consistent and high level of current income exempt from state taxes.

Short-Term, Intermediate-Term and Long-Term Treasury pursue their investment
objectives by investing primarily in securities issued or guaranteed by the U.S.
Treasury. As a result, each fund may invest in U.S. Treasury bills, bonds, notes
and zero-coupon securities, all of which are also backed by the direct full
faith and credit pledge of the U.S. government. In addition, the funds may
invest up to 35% of their total assets in securities issued by agencies and
instrumentalities of the U.S. government.

Within this framework, the funds differ in the remaining maturities of their
portfolio securities and the dollar-weighted average maturities of their overall
portfolio. Under normal conditions, the funds' maturity characteristics are as
follows: Short-Term Treasury invests primarily in securities with remaining
maturities of 3 years or less, and maintains a weighted average portfolio
maturity ranging from 13 months to three years. Intermediate-Term Treasury's
weighted average portfolio maturity ranges from three to 10 years. Long-Term
Treasury invests primarily in securities with maturities of 10 or more years and
maintains a weighted average portfolio maturity ranging from 20 to 30 years.

Each of the funds is designed to allow investors to seek competitive yields
within their tolerance for share price fluctuations. Thus, Short-Term Treasury
may be appropriate for investors who are seeking higher current yields than
those available from money market funds and who can tolerate some share price
volatility. Similarly, the current yield for Intermediate-Term Treasury will
likely be higher than that of Short-Term Treasury, but the share price
volatility will be greater. By maintaining an average portfolio maturity of 20
to 30 years, Long-Term Treasury offers investors the potential to earn higher
current yields than those typically available from Short-Term Treasury and
Intermediate-Term Treasury. Long-Term Treasury may also offer greater potential
for capital appreciation. However, maintaining a relatively long average
maturity also means that the Long-Term Treasury's share price generally will be
the most volatile of the three funds.

INFLATION-ADJUSTED TREASURY

Inflation-Adjusted Treasury pursues its investment objective by investing,
under normal market conditions, at least 65% of its total assets in
inflation-indexed Treasury securities that are backed by the full faith and
credit of the U.S. government and indexed or otherwise structured by the U.S.
Treasury to provide protection against inflation. Inflation-indexed Treasury
securities may be issued by the U.S. Treasury in the form of notes or bonds. Up
to 35% of the fund's total assets may be invested in inflation-indexed
securities issued by U.S. government agencies and government-sponsored
organizations. Inflation-Adjusted Treasury 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
inflation-indexed securities in which to invest or when such investments are
required as a temporary defensive measure. Inflation-Adjusted Treasury's
portfolio may consist of any combination of these securities consistent with
investment strategies employed by the manager. While Inflation-Adjusted Treasury
seeks to provide a measure of inflation protection to its investors, there is no
assurance that the fund will provide less risk than a fund investing in
conventional fixed principal securities.

There are no maturity or duration restrictions for the securities in which
Inflation-Adjusted Treasury may invest. The U.S. Treasury has issued
inflation-indexed Treasury securities with five-year and 10-year terms to
maturity. It has announced its intention (although there is no guarantee it will
do so) to issue additional securities with a term to maturity as long as 30
years. The manager will buy from among the available issues those securities
that will provide the maximum relative value to the fund.

Inflation-Adjusted Treasury may be appropriate for investors who are seeking
to protect all or a part of their investment portfolio from the effects of
inflation.

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

Traditional U.S. Treasury fixed-principal notes and bonds pay a stated return or
rate of interest in dollars and are redeemed at their par amount. Inflation
during the period that the securities are outstanding will diminish the future
purchasing power of these dollars. Inflation-Adjusted Treasury is designed to
serve as a vehicle to protect against this diminishing effect.

Inflation-Adjusted Treasury is designed to provide total return consistent
with an investment in inflation-indexed Treasury securities. Inflation-Adjusted
Treasury's yield will reflect both the inflation-adjusted interest income and
the inflation adjustment to principal which are features of inflation-indexed
Treasury securities. The current income generated by Inflation-Adjusted Treasury
will vary with month to month changes in the CPI index and may be substantially
more or substantially less than traditional fixed-principal securities.

Inflation-indexed securities in which the fund may invest are relatively new
securities. There are special investment risks, particularly share price
volatility and potential adverse tax consequences, associated with investment in
inflation-indexed securities. These risks are described in the section titled
"Risk Factors and Investment Techniques" on this page. You should read that
section carefully to make sure you understand the nature of Inflation-Adjusted
Treasury before you invest in it.

THE GOVERNMENT AGENCY FUNDS

SHORT-TERM GOVERNMENT

Short-Term Government seeks to provide investors with a high level of
current income, consistent with stability of principal. Short-Term Government
pursues this objective by investing primarily in securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities. Under normal
conditions, the manager invests at least 65% of Short-Term Government's total
assets in securities of the U.S. government and its agencies and maintaining a
weighted average duration of three years or less.

GNMA FUND

The GNMA 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.

Ginnie Mae certificates represent interests in pools of mortgage loans and
in the cash flows from those loans. These certificates are guaranteed by GNMA
and backed by the full faith and credit of the U.S. government as to the timely
payment of interest and repayment of principal, which means that the GNMA Fund
receives its share of interest and principal payments owed on the underlying
pool of mortgage loans, regardless of whether borrowers make their scheduled
mortgage payments.

Assets not invested in Ginnie Mae certificates, directly or indirectly, are
invested in other U.S. government securities or repurchase agreements
collateralized by U.S. government securities. For temporary defensive purposes,
the GNMA Fund may invest 100% of its assets in these securities.

A unique feature of mortgage-backed securities, such as Ginnie Mae
certificates, is that their principal is scheduled to be paid back gradually for
the duration of the loan rather than in one lump sum at maturity. Investors
(such as the GNMA Fund) receive scheduled monthly payments of principal and
interest, but they may also receive unscheduled prepayments of principal on the
underlying mortgages. See "Mortgage-Backed Securities" on page 16 for a
discussion of prepayment risk.

RISK FACTORS AND INVESTMENT TECHNIQUES

The obligations in which the funds may invest differ from one another in
their interest rates, maturities, dates of issuance and interest payment
schedules. The pertinent features of the types of obligations in which the funds
may invest are described in this section.

U.S. GOVERNMENT SECURITIES

U.S. Treasury bills, notes, zero-coupon bonds and other bonds are direct
obligations of the U.S. Treasury, which has never failed to pay interest and
repay principal when due. Treasury bills have initial maturities of one year or
less, Treasury notes from two to 10 years, and Treasury bonds more than 10
years. Although U.S. Treasury securities carry little principal risk if held to
maturity, the prices of these securities (like all debt securities) change
between issuance and maturity in response to fluctuating market interest rates.

A number of U.S. government agencies and government-sponsored organizations
issue debt securities.

PROSPECTUS INFORMATION REGARDING THE FUNDS 15

These agencies generally are created by Congress to fulfill a specific need,
such as providing credit to home buyers or farmers. Among these agencies are the
Federal Home Loan Banks, the Federal Farm Credit Banks, the Student Loan
Marketing Association and the Resolution Funding Corporation.

Some agency securities are backed by the full faith and credit of the U.S.
government, and some are guaranteed only by the issuing agency. Agency
securities typically offer somewhat higher yields than U.S. Treasury securities
with similar maturities. However, these securities may involve greater risk of
default than securities backed by the U.S. Treasury.

Interest rates on agency securities may be fixed for the term of the
investment (fixed-rate agency securities) or tied to prevailing interest rates
(floating-rate agency securities). Interest rate resets on floating-rate agency
securities generally occur at intervals of one year or less, based on changes in
a predetermined interest rate index.

Floating-rate agency securities frequently have caps limiting the extent to
which coupon rates can be raised. The price of a floating-rate agency security
may decline if its capped coupon rate is lower than prevailing market interest
rates. Fixed- and floating-rate agency securities may be issued with a call date
(which permits redemption before the maturity date). The exercise of a call may
reduce an obligation's yield to maturity. Capital Preservation may not invest in
floating-rate agency securities.

MORTGAGE-BACKED SECURITIES

Short-Term Government and the GNMA Fund may purchase mortgage pass-through
securities. These represent interests in "pools" of mortgages in which payments
of both interest and principal on the securities are generally made monthly.
These monthly mortgage payments are, in effect "passed-through" to the security
holder, (minus fees paid to the security's issuer or guarantor). Although
fixed-rate mortgages typically have stated maturities of 30 or more years, most
mortgage holders pay off their mortgages before they mature which may make these
subject to prepayment risk.

Also, mortgage-backed securities, like other fixed-income securities,
generally decrease in value as a result of increases in interest rates, but
benefit less than other fixed-income securities from declining interest rates
because of the risk of prepayment resulting from homeowners' refinancing their
mortgages to take advantage of lower interest rates. On average, securities
backed by 30-year mortgages return principal within seven to 10 years. As a
result, these securities have historically exhibited behavior comparable to
seven- to 10-year Treasury notes, while offering higher yields.

The primary issuers of mortgage securities are FNMA, FHLMC and GNMA.
Payments of principal and interest on GNMA securities are guaranteed by GNMA and
backed by the full faith and credit of the U.S. government. FNMA and FHLMC have
a close relationship with the U.S. government so even though their securities
are not backed by the full faith and credit of the U.S. government, the manager
considers them to be high-quality securities with minimal credit risks.

ADJUSTABLE-RATE MORTGAGE SECURITIES

Adjustable-rate mortgage securities (ARMs) are pass-through securities
collateralized by mortgages with adjustable, rather than fixed, interest rates.
The interest rate payments and amortization of principal on the underlying
adjustable-rate mortgages are tied to changes in predetermined interest rate
indices. ARM rates are readjusted at intervals of one year or less, subject to
maximums (caps) and minimums (floors) on the rates that can be charged to
mortgage holders during a given period and during the life of a mortgage. These
periodic rate adjustments allow ARM investors to participate in market interest
rate increases (to produce higher yields with less share price volatility) but
only to the extent that the current rate on the underlying mortgages remain at
or below their specified caps.

If ARMs are purchased at a premium, mortgage foreclosures and unscheduled
principal prepayments may result in a decline in share price. On the other hand,
if ARMs are purchased at a discount, both scheduled and unscheduled payments of
principal may accelerate the recognition of income and thereby increase the
fund's yield and total return.

16 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

FNMA or FHLMC typically are conventional residential mortgages that conform to
standards prescribed by FNMA or FHLMC and are guaranteed by those
instrumentalities.

COLLATERALIZED MORTGAGE OBLIGATIONS

Collateralized mortgage obligations (CMOs) are mortgage-backed securities
issued by government agencies; single-purpose, stand-alone financial
subsidiaries; trusts established by financial institutions; or similar
institutions. Short-Term Government and the GNMA Fund may buy CMOs, provided
that they:

* Are collateralized by pools of mortgages in which payment of principal
and interest of each mortgage is guaranteed by an agency or
instrumentality of the U.S. government;

* Are collateralized by pools of mortgages in which payment of principal
and interest are guaranteed by the issuer, and the guarantee is
collateralized by U.S. government securities; or

* Are securities in which the proceeds of the issue are invested in
mortgage securities and payments of principal and interest is supported
by the credit of an agency or instrumentality of the U.S. government.

STRIPPED MORTGAGE-BACKED SECURITIES

Stripped mortgage-backed securities (which are permitted investments for
Short-Term Government only) are usually structured with two classes. One class
will receive all of the interest (the interest-only class, or "IO"), whereas the
other class will receive all of the principal (the principal-only class, or
"PO"). Stripped mortgage securities are likely to experience greater price
volatility than other types of mortgage securities in which Short-Term
Government invests. The yield to maturity on the IO class is extremely
sensitive, not only to changes in prevailing interest rates but also to the rate
of principal payments (including prepayments) on the underlying mortgage assets.
If prepayments accelerate, Short-Term Government may not fully recover its
initial investment in these securities.

Short-Term Government's investments in stripped mortgage securities together
with investment's in illiquid securities may not exceed 15% of net assets.

INFLATION-INDEXED TREASURY SECURITIES

Inflation-indexed Treasury securities are Treasury securities with a final
value and interest payment stream linked to the inflation rate.
Inflation-indexed Treasury securities may be issued in either note or bond form.
Inflation-indexed Treasury notes have maturities of at least one year, but not
more than 10 years. Inflation-indexed Treasury bonds have maturities of more
than 10 years.

Inflation-indexed Treasury securities may be attractive to investors seeking
an investment backed by the full faith and credit of the U.S. government that
provides a return in excess of the rate of inflation. These securities are new
to the U.S. market, having first been sold in January 1997. There is uncertainty
as to how these securities will be treated by the marketplace. See "Development
of Inflation-Indexed Securities Market" on page 18. Inflation-indexed Treasury
securities are auctioned and issued on a quarterly basis.

STRUCTURE AND INFLATION INDEX

The principal value of inflation-indexed Treasury securities will be
adjusted to reflect changes in the level of inflation. The index for measuring
the inflation rate for inflation-indexed Treasury securities is the
non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All
Urban Consumers published monthly by the U.S. Department of Labor's Bureau of
Labor Statistics.

Semiannual coupon interest payments are made at a fixed percentage of the
inflation-indexed principal value. The coupon rate for the semiannual interest
rate of each issuance of inflation-indexed Treasury securities is determined at
the time the securities are sold to the public (i.e., by competitive bids in the
auction). The coupon rate will likely reflect "real yields" available in the
Treasury market; "real yields" are the prevailing yields on similar maturity
Treasury securities less then-prevailing inflation expectations. While a
reduction in inflation will cause a reduction in the interest payment made on
the securities, the repayment of principal at the maturity of the security is
guaranteed by the Treasury to be not less than the original face or par amount
of the security at issuance.

PROSPECTUS INFORMATION REGARDING THE FUNDS 17

INDEXING METHODOLOGY

The principal value of inflation-indexed Treasury securities will be
indexed, or adjusted, to account for changes in the Consumer Price Index.
Semiannual coupon interest payment amounts will be determined by multiplying the
inflation-indexed principal amount by one-half the stated rate of interest on
each interest payment date.

TAXATION

Taxation applicable to inflation-indexed Treasury securities is similar to
conventional bonds. Both interest payments and the difference between original
principal and the inflation-adjusted principal will be treated as interest
income subject to taxation. Interest payments are taxable when received or
accrued. The inflation adjustment to the principal is subject to tax in the year
adjustment is made, not at maturity of the security when the cash from the
repayment of principal is received. If an upward adjustment has been made (which
typically should happen), investors in non-tax deferred accounts will pay taxes
on this amount currently. Decreases in the indexed principal can only be
deducted from current or previous interest payments reported as income.

Inflation-indexed Treasury securities therefore have a potential cash flow
mismatch to an investor, since investors must pay taxes on the
inflation-adjusted principal before the repayment of principal is received. It
is possible that, particularly for high income tax bracket investors,
inflation-indexed Treasury securities would not generate enough income in a
given year to cover the tax liability it could create. This is similar to the
current tax treatment for zero coupon bonds and other discount securities. If
inflation-indexed Treasury securities are sold prior to maturity, capital losses
or gains are realized in the same manner as traditional bonds.

Inflation-Adjusted Treasury, however, distributes all income on a monthly
basis. Investors in Inflation-Adjusted Treasury will receive dividends which
represent both the interest payments and the principal adjustments of the
inflation-indexed securities held in its portfolio. An investment in
Inflation-Adjusted Treasury may therefore be a means to avoid the cash flow
mismatch associated with a direct investment in inflation-indexed securities.
For more information about taxes and their effect on you as an investor in the
fund, see "Taxes," on page 29.

U.S GOVERNMENT AGENCIES

A number of U.S. government agencies and government-sponsored organizations
may issue inflation-indexed securities. Some U.S. government agencies have
issued inflation-indexed securities whose design mirrors that of the
inflation-indexed Treasury securities described on the previous page.

DEVELOPMENT OF INFLATION-INDEXED SECURITIES MARKET

The Treasury securities market is the largest and most liquid securities
market in the world. The marketability of inflation-indexed Treasury securities
and inflation-indexed securities generally may be enhanced over time as
additional inflation-indexed securities are issued and more investors
participate in the market.

Inflation-Adjusted Treasury will purchase inflation- indexed securities at
auction or in the secondary market as the manager deems appropriate. The
secondary market for inflation-indexed securities may not be as active as the
secondary market for Treasury and U.S. government agency fixed-principal notes
and bonds. In addition, inflation-indexed securities may not be as widely traded
or as well understood as fixed-principal securities, nor is it known at this
time exactly how the secondary market will develop.

If the number of inflation-indexed securities market participants is
limited, it may result in larger spreads between bid and asked prices for
inflation-indexed securities than the bid-asked spreads for fixed-principal
notes and bonds with similar terms to maturity. Such larger bid-ask spreads
normally result in higher transactions costs and/or lower returns. If the market
does not develop sufficient liquidity, large buyers or sellers of these
securities may have a disproportionately negative impact on the value of the
securities and, hence, Inflation-Adjusted Treasury's net asset value.

The manager currently believes that the market for inflation-indexed
securities will be sufficient to permit Inflation-Adjusted Treasury to pursue
its investment objective. However, should the market for inflation-indexed
securities prove less active than anticipated by the manager, the manager is
authorized to treat such an environment as an abnormal

18 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

market condition. During such a period, Inflation-Adjusted Treasury will not be
fully pursuing its investment objective.

SHARE PRICE VOLATILITY

Inflation-indexed securities are designed to offer a return linked to
inflation, thereby protecting future purchasing power of the money invested in
them. However, inflation-indexed securities provide this "protected" return only
if held to maturity. In addition, inflation-indexed securities may not trade at
par value. "Real" interest rates (the market rate of interest less the
anticipated rate of inflation) change over time, as a result of many factors,
such as what investors are demanding as a true value for money. When real rates
do change, inflation-indexed securities prices will be more sensitive to these
changes than conventional bonds, since these securities were sold originally
based upon a "real" interest rate that is no longer prevailing. Should market
expectations for real interest rates rise, the price of inflation-indexed
securities and the share price of Inflation-Adjusted Treasury will fall.
Investors in the fund should be prepared to accept not only this share price
volatility but also the possible adverse tax consequences it may cause.

An investment in securities featuring inflation-adjusted principal and/or
interest involves factors not associated with more traditional fixed-principal
securities. Such factors include the possibility that the inflation index may be
subject to significant changes in interest rates, that changes in the index may
or may not correlate to changes in interest rates generally or changes in other
indices, that the resulting interest may be greater or less than that payable on
other securities of similar maturities. In the event of sustained deflation, it
is possible that the amount of semiannual interest payments, the
inflation-adjusted principal of the security and the value of the stripped
components, will decrease. If any of these possibilities are realized,
Inflation-Adjusted Treasury's net asset value could be negatively affected.

REPURCHASE AGREEMENTS

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

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

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

Each of the funds, with the exception of Capital Preservation and Government
Agency, may invest in repurchase agreements with respect to any security in
which that fund is authorized to invest, even if the remaining maturity of the
underlying security would make that security ineligible for purchase by such
fund.

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

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

PORTFOLIO TURNOVER

The portfolio turnover rates of the U.S. Treasury Funds and the Government
Agency Funds are shown in the financial information of this Prospectus.

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

PROSPECTUS INFORMATION REGARDING THE FUNDS 19

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

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

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

CASH MANAGEMENT

Up to 10% of the funds' total assets may be invested in this manner.

OTHER TECHNIQUES

The manager may buy other types of securities or employ other portfolio
management techniques on behalf of a fund including reverse repurchase
agreements. When SEC guidelines require it to do so, the fund will set aside
cash or appropriate liquid assets in a segregated account to cover the fund's
obligations.

PERFORMANCE ADVERTISING

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

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

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

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

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

20 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

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

A tax-equivalent yield demonstrates the taxable yield necessary to produce
an after-tax yield equivalent to that of a mutual fund that invests in exempt
obligations. Each fund (with the exception of Short-Term Government and the GNMA
Fund) may quote tax-equivalent yield, which shows the taxable yields an investor
would have to earn before taxes to equal the fund's tax-free yield. As a
prospective investor in the funds, you should determine whether your state
tax-equivalent yield is likely to be higher with a taxable or with a tax-exempt
fund. To determine this, you may use the formula depicted below.

The tax-equivalent yield is based on each fund's current state tax-free
yield and your state income tax rate. The formula is:

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

The funds may also include in advertisements data comparing performance with
the performance of non-related investment media, published editorial comments
and performance rankings compiled by independent organizations (such as Lipper
Analytical Services or IBC's Money Fund Report) and publications that monitor
the performance of mutual funds. Performance information may be quoted
numerically or may be presented in a table, graph or other illustration. In
addition, fund performance may be compared to well-known indices of market
performance including the IBC's Money Fund Average and Bank Rate Monitor
National Index of 21/2-year CD rates. Fund performance may also be compared, on
a relative basis, to the other funds in our fund family. This relative
comparison, which may be based upon historical fund performance or historical or
expected volatility or other fund characteristics, may be presented numerically,
graphically or in text. Fund performance may also be combined or blended with
other funds in our fund family, and that combined or blended performance may be
compared to the same indices to which individual funds may be compared.

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

PROSPECTUS INFORMATION REGARDING THE FUNDS 21

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

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

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

INVESTING IN AMERICAN CENTURY

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

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Employer-Sponsored Retirement Plans and Institutional Accounts," page 27.

HOW TO OPEN AN ACCOUNT

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

The minimum investment is $2,500 [$1,000 for IRA and Uniform Gifts/Transfers
to Minor Acts (UGMA/UTMA) accounts].

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

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

You may invest in the following ways:

BY MAIL

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

BY WIRE

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

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

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

* BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

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

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

22 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

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

* Taxpayer identification or Social Security
number

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

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

BY EXCHANGE

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

IN PERSON

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

4500 Main Street
Kansas City, Missouri 64111

4917 Town Center Drive
Leawood, Kansas 66211

1665 Charleston Road
Mountain View, California 94043

2000 S. Colorado Blvd.
Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

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

BY MAIL

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

BY TELEPHONE

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

BY ONLINE ACCESS

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

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 22 and indicate your account number.

IN PERSON

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

AUTOMATIC INVESTMENT PLAN

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

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

As long as you meet any minimum investment requirements, you may exchange
your fund shares to our other funds up to six times per year per account. An
exchange request will be processed as of the same day it is received, if it is
received before the funds' net asset values are calculated, which is one hour
prior to the close of the New York Stock Exchange for the funds issued by
American Century Target Maturities Trust, and at the close of the Exchange for
all of our other funds. See "When Share Price is Determined," page 28.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 23

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

BY MAIL

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

BY TELEPHONE

You can make exchanges over the telephone (either with an Investor Services
Representative or using our Automated Information Line--see page 25) upon
completion of your application or by calling us at 1-800-345-2021 to get the
appropriate form.

BY ONLINE ACCESS

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

HOW TO REDEEM SHARES

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

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

BY MAIL

Your written instructions to redeem shares may be made either by a
redemption form, which we will send to you upon request, or by a letter to us.
Certain redemptions may require a signature guarantee. Please see "Signature
Guarantee," page 25.

BY TELEPHONE

If you have authorized us to accept telephone instructions, you may redeem
your shares by calling an Investor Services Representative.

BY CHECK-A-MONTH

If you have at least a $10,000 balance in your U.S. Treasury Fund or
Government Agency Fund account, or if you have a Money Market Fund account, you
may redeem shares by Check-A-Month. A Check-A-Month plan automatically redeems
enough shares each month to provide you with a check in an amount you choose
(minimum $50). To set up a Check-A-Month plan, please call and request our
Check-A-Month brochure.

OTHER AUTOMATIC REDEMPTIONS

If you have at least a $10,000 balance in your U.S. Treasury Fund or
Government Agency Fund account, or if you have a Money Market Fund account, you
may elect to make redemptions automatically by authorizing us to send funds
directly to you or to your account at a bank or other financial institution. To
set up automatic redemptions, call one of our Investor Services Representatives.

REDEMPTION PROCEEDS

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

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

BY CHECK

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

BY WIRE AND ACH

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

Your bank will usually receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.
Wired funds are subject to a $10 fee to cover bank wire charges, which is
deducted from redemption proceeds. Once the funds are transmitted, the time of
receipt and the funds' availability are not under our control.

24 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

Whenever the shares held in an account have a value of less than the
required minimum, a letter will be sent advising you of the necessity to bring
the value of the shares held in the account up to the minimum. If action is not
taken within 90 days of the letter's date, the shares held in the account will
be redeemed and proceeds from the redemption will be sent by check to your
address of record. We reserve the right to increase the investment minimums.

SIGNATURE GUARANTEE

To protect your accounts from fraud, some transactions will require a
signature guarantee. You may obtain a signature guarantee from a bank or trust
company, credit union, broker-dealer, securities exchange or association,
clearing agency or savings association, as defined by federal law.

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

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

SPECIAL SHAREHOLDER SERVICES

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

Our special investor services include:

AUTOMATED INFORMATION LINE

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

ONLINE ACCOUNT ACCESS

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

CHECKWRITING

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

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

If you want to add CheckWriting to an existing account that offers
CheckWriting, contact us by telephone or mail for an appropriate form.
Checkwriting is not available for any account held in an IRA or 403(b) Plan.

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

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

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

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 25

OPEN ORDER SERVICE

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

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

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

TAX-QUALIFIED RETIREMENT PLANS

Each fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:

* Individual Retirement Accounts (IRAs);

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

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

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

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

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

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

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

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

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

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

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

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for
losses due to unauthorized or fraudulent instructions. The company, its
transfer agent and investment advisor will not be

26 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

responsible for any loss due to instructions they reasonably believe
are genuine.

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

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

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

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

REPORTS TO SHAREHOLDERS

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

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

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

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

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

EMPLOYER-SPONSORED RETIREMENT PLANS AND
INSTITUTIONAL ACCOUNTS

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

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

If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance company or other financial intermediary, your ability
to purchase, exchange and redeem shares will depend on your agreement with, and
the policies of, such financial intermediary.

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

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 27

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

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

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

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

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

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

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

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

HOW SHARE PRICE IS DETERMINED

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

Portfolio securities of each fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on the exchange where primarily traded. Depending on local convention
or regulation, securities traded over-the-counter are priced at the mean of the
latest bid and asked prices, or at the last sale price. When market quotations
are not readily available, securities and other assets are valued at fair value
as determined in accordance with procedures adopted by the Board of Trustees.

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

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

Pursuant to a determination by the Money Market Funds' Board of Trustees and
Rule 2a-7 under the Investment Company Act of 1940, portfolio securities of the
funds are valued at amortized cost. When a security is valued at amortized cost,
it is valued at its cost when purchased, and thereafter by assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

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

DISTRIBUTIONS

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

You will begin to participate in the distributions the day AFTER your
purchase is effective. See "When Share Price Is Determined," page 28. If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed (other than by CheckWriting), the
distribution on the redeemed shares will be included with your redemption
proceeds.

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

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

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

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

TAXES

Each fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code, which means that to the extent its
income is distributed to shareholders, it pays no income taxes.

TAX-DEFERRED ACCOUNTS

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

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

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 29

TAXABLE ACCOUNTS

If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income, except as described below. The dividends from net income of the
funds do not qualify for the 70% dividends-received deduction for corporations
since they are derived from interest income. Distributions from gains on assets
held greater than 12 months, but no more than 18 months (28% rate gain) and/or
assets held greater than 18 months (20% rate gain) are taxable as long-term
capital gains regardless of the length of time you have held the shares on which
such distributions are paid. However, you should note that any loss realized
upon the sale or redemption of shares held for six months or less will be
treated as a long-term capital loss to the extent of any distribution of
long-term capital gain to you with respect to such shares.

Inflation-indexed securities purchased by Inflation-Adjusted Treasury accrue
additional interest for federal income tax purposes in addition to the current
interest paid. This additional interest is commonly referred to as "imputed
income." Inflation-Adjusted Treasury must distribute this imputed income to
shareholders as ordinary income dividends. In periods of high inflation, it is
possible that the imputed income earned by Inflation-Adjusted Treasury will
exceed current interest earned.

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

In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.

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

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

Redemption of shares of a fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders will generally recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and will generally be considered long-term subject to tax
at a maximum rate of 28% (28% rate gain/loss) if shareholders have held such
shares for a period of more than 12 months, but no more than 18 months and
long-term subject to tax at a maximum rate of 20%, minimum of 10%, (20% rate
gain/loss) if shareholders have held such shares for a period of more than 18
months. If a loss is realized on the redemption of fund shares, the reinvestment
in additional fund shares within 30 days before or after the redemption may be
subject to the "wash sale" rules of the Internal Revenue Code, resulting in a
postponement of the recognition of such loss for federal income tax purposes.

30 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

MANAGEMENT

INVESTMENT MANAGEMENT

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

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

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

DAVID SCHROEDER, Vice President and Senior Portfolio Manager, is the manager
of the teams that manage the funds in the American Century Government Income
Trust and has been a member of the teams that manage Intermediate-Term Treasury
since January 1992, Long-Term Treasury since September 1992, the GNMA Fund since
January 1996 and Inflation-Adjusted Treasury since its inception in February
1997. Mr. Schroeder joined American Century in 1990. He holds a bachelor's
degree from Pomona College.

ROBERT V. GAHAGAN, Vice President and Portfolio Manager, has been a member
of the team that manages Short-Term Treasury since March 1996, Intermediate-Term
Treasury since January 1998, and Short-Term Government since December 1990. Mr.
Gahagan joined American Century in 1983. Mr. Gahagan is a member of the
Association of Investment Management and Research (AIMR). He holds a bachelor's
degree in economics and an MBA from the University of Missouri-Kansas City.

CASEY COLTON, Senior Portfolio Manager, has been a member of the team that
manages the GNMA Fund since January 1994 and Long-Term Treasury since January
1996. Mr. Colton joined American Century in 1990. Before being promoted to his
current position, Mr. Colton was a municipal analyst. He holds a bachelor's
degree in business administration from San Jose State University and a master's
degree from the University of Southern California. He is a Chartered Financial
Analyst and a Certified Public Accountant.

NEWLIN RANKIN, Senior Portfolio Manager, has been a member of the team that
manages Short-Term Government since January 1995 and Short-Term Treasury since
March 1996. Mr. Rankin joined American Century in 1994. Before joining American
Century, he was an Assistant Vice President at Wells Fargo Bank (1991 to 1993).
He holds a bachelor's degree and an MBA from the University of San Francisco.

AMY O'DONNELL, Portfolio Manager, has been a member of the team that manages
Capital Preservation and Government Agency since April 1997 and had previously
managed these funds from 1992 through 1995. Ms. O'Donnell joined American
Century in 1987. She holds a bachelor's degree in business administration and an
MBA from California State University, Hayward.

JEREMY FLETCHER, Associate Portfolio Manager, has been a member of the team
that manages the funds in American Century Government Income Trust since August
1997. Mr. Fletcher joined American Century in 1991. Before being promoted to his
current position, Mr. Fletcher was a portfolio administrator. He holds
bachelor's degrees in economics and mathematics from Claremont McKenna College
and is a candidate for the Chartered Financial Analyst designation.

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

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 31

For the services provided to the funds, the manager receives a monthly fee
based on a percentage of the average net assets of each fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category which are managed by the manager (the "Investment Category
Fee"). For example, when calculating the fee for a Money Market Fund, all of the
assets of the money market funds managed by the manager are aggregated. The
three investment categories are: Money Market Funds, Bond Funds and Equity
Funds. Second, a separate fee rate schedule is applied to the assets of all of
the funds managed by the manager (the "Complex Fee"). The Investment Category
Fee and the Complex Fee are then added to determine the unified management fee
payable by the fund to the manager. Currently, the Investment Category Fee for
each of the funds is an annual rate of the average net assets of the fund as
follows: Capital Preservation and Government Agency, 0.18%; Short-Term Treasury,
0.23%; Intermediate-Term Treasury, 0.21%; Long-Term Treasury, 0.22%;
Inflation-Adjusted Treasury, 0.34%; and Short-Term Government and the GNMA Fund,
0.29%. The Complex Fee is currently an annual rate of 0.30% of the average net
assets of a fund. Further information about the calculation of the annual
management fee is contained in the Statement of Additional Information.

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

CODE OF ETHICS

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

TRANSFER AND ADMINISTRATIVE SERVICES

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

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

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

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

The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (ACC). James E. Stowers Jr., Chairman of the Board of Directors
of ACC, controls ACC by virtue of his ownership of a majority of its common
stock.

32 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

YEAR 2000 ISSUES

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. The
funds and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the funds'
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.

The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the funds' and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected systems (targeted for completion with respect to
critical systems by the end of 1998). The manager will pay for the remediation
effort with revenues from its management fee, so that the funds will not
directly bear any of the cost.

In light of these remediation efforts, the funds do not anticipate a
material adverse impact on their business or operations. However, there can be
no assurance that the remediation plan will be sufficient and timely or that
interaction with other noncomplying computer systems will not have a material
adverse effect on the funds' business, operations or financial condition.

In addition, the issuers of the securities in which the funds invest may
have Year 2000 computer problems. Although the media and various regulatory
agencies have focused a great deal of attention on the need for issuers to
assess and remediate these problems, their failure to do so could hurt the
funds' performance.

DISTRIBUTION OF FUND SHARES

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

Investors may open accounts with American Century only through the
Distributor. All purchase transactions in the funds offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the Distributor.

The manager (or an affiliate) pays all expenses for promoting and
distributing the Investor Class of fund shares offered by this Prospectus. The
Investor Class of shares does not pay any commissions or other fees to the
Distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Government Income Trust was organized as a Massachusetts
business trust on July 24, 1985. The Trust is an open-end management investment
company. Its business and affairs are managed by its officers under the
direction of its Board of Trustees.

The principal office of the funds is American Century Tower, 4500 Main
Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries made by
mail should be directed to the address and phone numbers on the cover, or by
phone to 1-800-345-2021 (international calls: 816-531-5575).

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

American Century offers two classes of the funds (except Capital
Preservation, which offers only Investor Class) offered by this Prospectus: an
Investor Class and an Advisor Class. The shares offered by this Prospectus are
Investor Class shares and have no up-front charges, commissions or 12b-1 fees.

The other class of shares is primarily offered to institutional investors or
through institutional distributions channels, such as employer-sponsored
retirement plans or through banks, broker-dealers,

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 33

insurance companies or other financial intermediaries. The other class has
different fees, expenses, and/or minimum investment requirements than the
Investor Class. The difference in the fee structures among the classes is the
result of their separate arrangements for shareholder and distribution services
and not the result of any difference in amounts charged by the manager for core
investment advisory services. Accordingly, the core investment advisory expenses
do not vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-2021.

Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various classes are (a) each class
may be subject to different expenses specific to that class, (b) each class has
a different identifying designation or name, (c) each class has exclusive voting
rights with respect to matters solely affecting such class, and (d) each class
may have different exchange privileges.

Each share, irrespective of series or class, is entitled to one vote for
each dollar of net asset value applicable to such share on all questions, except
for those matters which must be voted on separately by the series or class of
shares affected. Matters affecting only one series or class are voted upon only
by that series or class.

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

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

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

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

34 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

NOTES

NOTES 35

NOTES

36 NOTES

NOTES

NOTES 37

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

Investor Services:
1-800-345-2021 or 816-531-5575

Automated Information Line:
1-800-345-8765

Telecommunications Device for the Deaf:
1-800-634-4113 or 816-444-3485

Fax: 816-340-7962

www.americancentury.com

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

9808 [recycled logo]
SH-BKT-12804 Recycled
<PAGE>
PROSPECTUS

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

AUGUST 1, 1998

BENHAM
GROUP(reg.tm)

Government Agency
Short-Term Treasury
Intermediate-Term Treasury
Long-Term Treasury
Short-Term Government
GNMA Fund
Inflation-Adjusted Treasury

ADVISOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

Government Agency
Short-Term Treasury
Intermediate-Term Treasury
Long-Term Treasury
Short-Term Government
GNMA Fund
Inflation-Adjusted Treasury

PROSPECTUS

AUGUST 1, 1998

Government Agency * Short-Term Treasury *
Intermediate-Term Treasury * Long-Term Treasury *
Short-Term Government * GNMA Fund *
Inflation-Adjusted Treasury

ADVISOR CLASS

AMERICAN CENTURY GOVERNMENT INCOME TRUST

American Century Government Income Trust is a part of American Century
Investments, a family of funds that includes nearly 70 no-load and low-load
mutual funds covering a variety of investment opportunities. Seven of the funds
from our Benham Group that invest in U.S. government securities are described in
this Prospectus. Their investment objectives are listed on page 2 of this
Prospectus. The other funds are described in separate prospectuses.

Each fund's shares offered in this Prospectus (the Advisor Class shares) are
sold at their net asset value with no sales charges or commissions. The Advisor
Class shares are subject to a Rule 12b-1 shareholder services fee and
distribution fee as described in this Prospectus.

The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies and other financial
intermediaries that provide various administrative and distribution services.

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419385
Kansas City, Missouri 64141-6385 * 1-800-345-3533
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-345-1833 * In Missouri: 816-444-3038
www.americancentury.com

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

INVESTMENTS IN THE FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT OR ANY OTHER AGENCY. THERE IS NO ASSURANCE THAT THE MONEY MARKET FUND
WILL BE ABLE TO MAINTAIN A $1.00 SHARE PRICE.

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY--BENHAM GOVERNMENT AGENCY
MONEY MARKET FUND

AMERICAN CENTURY--BENHAM SHORT-TERM
TREASURY FUND

AMERICAN CENTURY--BENHAM INTERMEDIATE-TERM
TREASURY FUND

AMERICAN CENTURY--BENHAM LONG-TERM
TREASURY FUND

AMERICAN CENTURY--BENHAM SHORT-TERM
GOVERNMENT FUND

The fund was previously known as "American Century-Benham Adjustable Rate
Government Securities Fund."

AMERICAN CENTURY--BENHAM GNMA FUND

The GNMA 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.

AMERICAN CENTURY--BENHAM INFLATION-ADJUSTED
TREASURY FUND

Inflation-Adjusted Treasury seeks to provide a total return consistent with
investment in U.S. Treasury inflation-adjusted securities.

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

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objectives of the Funds .......................................... 2
Transaction and Operating Expense Table ..................................... 4
Financial Highlights ........................................................ 5
Performance Information of Other Class ...................................... 9

INFORMATION REGARDING THE FUNDS

Investment Policies of the Funds ............................................ 16
The Money Market Fund ....................................................... 16
Government Agency ........................................................ 16
The U.S. Treasury Funds ..................................................... 16
Short-Term Treasury, Intermediate-Term Treasury,
Long-Term Treasury .................................................... 16
Inflation-Adjusted Treasury .............................................. 17
The Government Agency Funds ................................................. 18
Short-Term Government .................................................... 18
GNMA Fund ................................................................ 18
Risk Factors and Investment Techniques ...................................... 18
U.S. Government Securities ............................................... 18
Mortgage-Backed Securities ............................................... 19
Adjustable-Rate Mortgage Securities ...................................... 19
Collateralized Mortgage Obligations ...................................... 19
Stripped Mortgage-Backed Securities ...................................... 20
Inflation-Indexed Treasury Securities .................................... 20
Repurchase Agreements .................................................... 22
Other Investment Practices, Their Characteristics
and Risks .................................................................. 22
Portfolio Turnover ....................................................... 22
When-Issued and Forward Commitment
Agreements ............................................................ 22
Cash Management .......................................................... 23
Other Techniques ......................................................... 23
Performance Advertising ..................................................... 23

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

How to Purchase and Sell American Century Funds ............................. 25
How to Exchange From One American Century
Fund to Another .......................................................... 25
How to Redeem Shares ........................................................ 25
Telephone Services .......................................................... 25
Investors Line ........................................................... 25

ADDITIONAL INFORMATION YOU SHOULD KNOW

Share Price ................................................................. 26
When Share Price Is Determined ........................................... 26
How Share Price Is Determined ............................................ 26
Where to Find Information About Share Price .............................. 27
Distributions ............................................................... 27
Taxes ....................................................................... 27
Tax-Deferred Accounts .................................................... 27
Taxable Accounts ......................................................... 28
Management .................................................................. 29
Investment Management .................................................... 29
Code of Ethics ........................................................... 30
Transfer and Administrative Services ..................................... 30
Year 2000 Issues ......................................................... 31
Distribution of Fund Shares ................................................. 31
Service and Distribution Fees ............................................ 31
Further Information About American Century .................................. 32

PROSPECTUS TABLE OF CONTENTS 3

TRANSACTION AND OPERATING EXPENSE TABLE

Short-Term
Government Inflation-Adjusted Short-Term Intermediate-Term Long-Term Government,
Agency Treasury Treasury Treasury Treasury GNMA Fund

SHAREHOLDER TRANSACTION EXPENSES:
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Load
Imposed on Purchases ............. none none none none none none
Maximum Sales Load Imposed on
Reinvested Dividends ............. none none none none none none
Deferred Sales Load ................. none none none none none none
Redemption Fee ...................... none none none none none none
Exchange Fee ........................ none none none none none none

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

Management Fees(1) .................. 0.23% 0.26% 0.26% 0.26% 0.26% 0.34%
12b-1 Fees(2) ....................... 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Other Expenses ...................... 0.00%(3) 0.13% 0.02% 0.00%(3) 0.01% 0.00%(3)
Total Fund Operating Expenses ....... 0.73% 0.89% 0.78% 0.76% 0.77% 0.84%

EXAMPLE:

You would pay the 1 year $ 7 $ 9 $ 8 $ 8 $ 8 $ 9
following expenses 3 years 23 28 25 24 25 27
on a $1,000 investment, 5 years 41 49 43 42 43 47
assuming a 5% annual 10 years 91 110 97 94 95 104
return and redemption at
the end of each time period:
</TABLE>

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

(2) The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other
financial intermediaries. A portion of the fee is used to compensate them
for ongoing recordkeeping and administrative services that would otherwise
be performed by an affiliate of the Manager, and a portion is used to
compensate them for distribution and other shareholder services. See
"Service and Distribution Fees," page 31.

The shares offered by this Prospectus are Advisor Class shares. The funds
offer one other class of shares which is primarily made available to retail
investors. The other class has a different fee structure than the Advisor Class.
The difference in the fee structures among the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the manager for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. A difference in fees will result in different performance for the
other class. For additional information about the various classes, see "Further
Information About American Century," page 32.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

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

The sale of the Advisor Class of the fund commenced on October 6, 1997.
Performance information of the original class of shares, which commenced
operations on September 8, 1992, is presented on page 10.

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

1998(1)
PER-SHARE DATA

<S> <C>
Net Asset Value, Beginning of Period ................................... $ 9.80
---------
Income From Investment Operations

Net Investment Income ................................................ 0.25

Net Realized and Unrealized Gain (Loss) on Investment Transactions ... --
---------
Total From Investment Operations ..................................... 0.25
---------
Distributions

From Net Investment Income ........................................... (0.25)
---------
Net Asset Value, End of Period ......................................... $ 9.80
=========
Total Return(2) ...................................................... 2.51%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ...................... 0.78%(3)

Ratio of Net Investment Income to Average Net Assets ................... 5.20%(3)

Portfolio Turnover Rate ................................................ 140%

Net Assets, End of Period (in thousands) ............................... $ 1,460
</TABLE>

(1) October 6, 1997 (commencement of sale) through March 31, 1998.

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

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

FINANCIAL HIGHLIGHTS
INTERMEDIATE-TERM TREASURY

The sale of the Advisor Class of the fund commenced on October 9, 1997.
Performance information of the original class of shares, which commenced
operations on May 16, 1980, is presented on page 11.

1998(1)

PER-SHARE DATA

Net Asset Value, Beginning of Period ............................. $ 10.42
-------
Income From Investment Operations

Net Investment Income .......................................... 0.26

Net Realized and Unrealized Gain on Investment Transactions .... 0.14
-------
Total From Investment Operations ............................... 0.40
-------
Distributions

From Net Investment Income ..................................... (0.26)
-------
Net Asset Value, End of Period ................................... $ 10.56
=======
Total Return(2) ................................................ 3.90%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ................ 0.77%(3)

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

Portfolio Turnover Rate .......................................... 194%(4)

Net Assets, End of Period (in thousands) ......................... $ 128

(1) October 9, 1997 (commencement of sale) through March 31, 1998.

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

(3) Annualized.

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

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

FINANCIAL HIGHLIGHTS
LONG-TERM TREASURY

The sale of the Advisor Class of the fund commenced on January 12, 1998.
Performance information of the original class of shares, which commenced
operations on September 8, 1992, is presented on page 12.

1998(1)

PER-SHARE DATA

Net Asset Value, Beginning of Period ............................. $ 10.85
-------

Income From Investment Operations

Net Investment Income .......................................... 0.12

Net Realized and Unrealized Loss on Investment Transactions .... (0.27)
-------
Total From Investment Operations ............................... (0.15)
-------
Distributions

From Net Investment Income ..................................... (0.12)
-------
Net Asset Value, End of Period ................................... $ 10.58
=======
Total Return(2) ................................................ (1.34)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ................ 0.77%(3)

Ratio of Net Investment Income to Average Net Assets ............. 5.42%(3)

Portfolio Turnover Rate .......................................... 57%

Net Assets, End of Period (in thousands) ......................... $ 218

(1) January 12, 1998 (commencement of sale) through March 31, 1998.

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

(3) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 7

FINANCIAL HIGHLIGHTS
GNMA FUND

The sale of the Advisor Class of the fund commenced on October 9, 1997.
Performance information of the original class of shares, which commenced
operations on September 23, 1985, is presented on page 14.

1998(1)

PER-SHARE DATA

Net Asset Value, Beginning of Period ............................... $ 10.63
-------
Income From Investment Operations

Net Investment Income ............................................ 0.31

Net Realized and Unrealized Gain on Investment Transactions ...... 0.04
-------
Total From Investment Operations ................................. 0.35
-------
Distributions

From Net Investment Income ....................................... (0.31)
-------
Net Asset Value, End of Period ..................................... $ 10.67
-------
Total Return(2) .................................................. 3.30%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets .................. 0.84%
(3)

Ratio of Net Investment Income to Average Net Assets ............... 5.92%
(3)

Portfolio Turnover Rate ............................................ 133%

Net Assets, End of Period (in thousands) ........................... $ 460

(1) October 9, 1997 (commencement of sale) through March 31, 1998.

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

(3) Annualized.

8 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
GOVERNMENT AGENCY

The Advisor Class of the fund was established September 2, 1997; however no
shares had been issued prior to the fund's fiscal year end. The financial
information in this table regarding selected per share data for the fund
reflects the performance of the fund's Investor Class of shares, which has a
total expense ratio that is 0.25% lower than the Advisor Class. Had the Advisor
Class been in existence for the fund for the time periods presented, the fund's
performance information would be lower as a result of the higher expenses.

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

1998 1997 1996 1995 1994 1993 1992 1991 1990(1)

PER-SHARE DATA

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

Net Investment Income ......... 0.05 0.05 0.05 0.04 0.03 0.03 0.05 0.07 0.03
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Distributions

From Net Investment Income .... (0.05) (0.05) (0.05) (0.04) (0.03) (0.03) (0.05) (0.07) (0.03)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= ========= ========= ========= =========

Total Return(2) ............... 5.14% 4.89% 5.35% 4.47% 2.69% 3.07% 5.29% 7.97% 2.65%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(3) ........ 0.51% 0.57% 0.51% 0.50% 0.50% 0.50% 0.30% -- --

Ratio of Net Investment Income
to Average Net Assets ........... 5.02% 4.76% 5.20% 4.35% 2.65% 3.04% 5.17% 7.42% 8.25%(4)

Net Assets, End
of Period (in millions) ......... $ 488 $ 471 $ 503 $ 462 $ 562 $ 646 $ 906 $ 1,074 $ 62
</TABLE>

(1) From December 5, 1989 (inception) through March 31, 1990.

(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.

PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 9

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
SHORT-TERM TREASURY

The Advisor Class of the fund was established September 2, 1997. The financial
information in this table regarding selected per share data for the fund
reflects the performance of the fund's Investor Class of shares, which has a
total expense ratio that is 0.25% lower than the Advisor Class. Had the Advisor
Class been in existence for the fund for the time periods presented, the fund's
performance information would be lower as a result of the higher expenses.

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

1998 1997 1996 1995 1994 1993(1)

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period .................... $ 9.68 $ 9.84 $ 9.73 $ 9.86 $ 10.04 $ 10.00
---------- ---------- ---------- ---------- ---------- ----------

Income From Investment Operations

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

Net Realized and Unrealized Gains
(Losses) on Investment Transactions .. 0.12 (0.07) 0.11 (0.13) (0.14) 0.04
---------- ---------- ---------- ---------- ---------- ----------
Total From
Investment Operations ................ 0.65 0.45 0.64 0.37 0.22 0.29
---------- ---------- ---------- ---------- ---------- ----------
Distributions

From Net Investment Income ........... (0.53) (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 .................. (0.53) (0.61) (0.53) (0.50) (0.40) (0.25)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ......... $ 9.80 $ 9.68 $ 9.84 $ 9.73 $ 9.86 $ 10.04
========== ========== ========== ========== ========== ==========

Total Return(2) ...................... 6.89% 4.62% 6.71% 3.85% 2.16% 2.79%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets .................. 0.55% 0.61% 0.67% 0.67% 0.58% --

Ratio of Net Investment Income
to Average Net Assets .................. 5.45% 5.26% 5.39% 5.22% 3.53% 4.50%(3)

Portfolio Turnover Rate ................ 140% 234% 224% 141% 262% 158%

Net Assets, End
of Period (in thousands) ............... $ 40,874 $ 35,854 $ 35,648 $ 56,090 $ 24,929 $ 14,889
</TABLE>

(1) September 8, 1992 (inception) through March 31, 1993.

(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.

10 PERFORMANCE INFORMATION OF OTHER CLASS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
INTERMEDIATE-TERM TREASURY

1998 1997 1996 1995 1994 1993 1992 1991 1990 1989

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year ............ $ 10.06 $ 10.24 $ 9.99 $ 10.18 $ 10.73 $ 10.52 $ 10.23 $ 9.87 $ 9.63 $ 10.11
------- ------- ------- ------- ------- ------- ------- ------- ------- -------

Income From
Investment Operations

Net Investment Income ...... 0.59 0.58 0.58 0.53 0.48 0.56 0.69 0.75 0.77 0.76

Net Realized and Unrealized
Gains (Losses) on Investment
Transactions ............... 0.50 (0.18) 0.25 (0.19) (0.27) 0.69 0.29 0.36 0.24 (0.49)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total From
Investment Operations ...... 1.09 0.40 0.83 0.34 0.21 1.25 0.98 1.11 1.01 0.27
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions

From Net
Investment Income .......... (0.59) (0.58) (0.58) (0.53) (0.48) (0.56) (0.69) (0.75) (0.77) (0.75)

From Net Realized Gains on
Investment Transactions .... -- -- -- -- (0.06) (0.48) -- -- -- --

In Excess of Net
Realized Gains on
Investment Transactions .... -- -- -- -- (0.22) -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions ........ (0.59) (0.58) (0.58) (0.53) (0.76) (1.04) (0.69) (0.75) (0.77) (0.75)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Year .................. $ 10.56 $ 10.06 $ 10.24 $ 9.99 $ 10.18 $ 10.73 $ 10.52 $ 10.23 $ 9.87 $ 9.63
======= ======= ======= ======= ======= ======= ======= ======= ======= =======

Total Return(1) ............ 11.04% 4.05% 8.42% 3.54% 1.85% 12.36% 9.92% 11.59% 10.61% 2.78%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ........ 0.51% 0.51% 0.53% 0.53% 0.51% 0.53% 0.59% 0.73% 0.75% 0.75%

Ratio of Net Investment Income
to Average Net Assets ........ 5.63% 5.72% 5.65% 5.35% 4.50% 5.18% 6.55% 7.49% 7.66% 7.67%

Portfolio Turnover Rate ...... 194%(2) 110% 168% 92% 213% 299% 149% 70% 217% 386%

Net Assets, End
of Year (in millions) ........ $ 375 $ 329 $ 311 $ 305 $ 351 $ 392 $ 303 $ 159 $ 97 $ 72
</TABLE>

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

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

PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 11

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
LONG-TERM TREASURY

1998 1997 1996 1995 1994 1993(1)

PER-SHARE DATA

Income From Investment Operations

Net Investment Income ..................... 0.61 0.60 0.60 0.60 0.63 0.39

From Net Investment Income ................ (0.61) (0.60) (0.60) (0.60) (0.63) (0.39)

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

Total Return(2) ........................... 20.48% 2.65% 13.46% 3.25% 2.87% 6.48%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....................... 0.54% 0.60% 0.67% 0.67% 0.57% --

Ratio of Net Investment Income
to Average Net Assets ....................... 6.00% 6.28% 5.93% 6.84% 5.89% 7.18%(3)

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

Net Assets, End
of Period (in thousands) .................... $ 103,381 $ 126,570 $ 110,741 $ 34,906 $ 18,003 $ 20,975
</TABLE>

(1) September 8, 1992 (inception) through March 31, 1993.

(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.

12 PERFORMANCE INFORMATION OF OTHER CLASS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
SHORT-TERM GOVERNMENT

The performance information for the year ended March 31, 1998, has been
audited by PricewaterhouseCoopers LLP, independent accountants, whose report
thereon appears in the fund's annual report, which is incorporated by reference
into the Statement of Additional Information. The performance information for
the periods ended on or before October 31, 1997, has been audited by other
independent accountants. The annual report contains additional performance
information and will be made available upon request and without charge. The
information presented reflects the reorganization of the fund through
acquisition of the assets and liabilities of American Century-Benham Short-Term
Government fund, a series of American Century Mutual Funds, Inc., and is for a
share outstanding throughout the years ended March 31, except as noted.

1998(1) 1997 1996 1995 1994 1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2)

PER-SHARE DATA

Net Asset Value,
Beginning
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
of Period ......... $9.49 $9.47 $9.51 $9.27 $9.67 $9.61 $9.41 $9.08 $9.32 $9.42 $9.55
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----

Income From Investment
Operations

Net Investment
Income .......... 0.21 0.52 0.51 0.52 0.40 0.36 0.44 0.63 0.79 0.84 0.81

Net Realized and
Unrealized
Gains (Losses)
on Investment
Transactions .... (0.03) 0.02 (0.04) 0.24 (0.40) 0.06 0.20 0.33 (0.24) (0.10) (0.13)
----- ---- ----- ---- ----- ---- ---- ---- ----- ----- -----
Total From
Investment
Operations ...... 0.18 0.54 0.47 0.76 -- 0.42 0.64 0.96 0.55 0.74 0.68
----- ---- ----- ---- ----- ---- ---- ---- ----- ----- -----
Distributions

From Net
Investment
Income .......... (0.21) (0.52) (0.51) (0.52) (0.40) (0.36) (0.44) (0.63) (0.79) (0.84) (0.81)

From Net
Realized Gains
on Investment
Transactions .... -- -- -- -- -- -- -- -- -- -- --
----- ---- ----- ---- ----- ---- ---- ---- ----- ----- -----
Total
Distributions ... (0.21) (0.52) (0.51) (0.52) (0.40) (0.36) (0.44) (0.63) (0.79) (0.84) (0.81)
----- ---- ----- ---- ----- ---- ---- ---- ----- ----- -----
Net Asset Value,
End of Period ..... $9.46 $9.49 $9.47 $9.51 $9.27 $9.67 $9.61 $9.41 $9.08 $9.32 $9.42
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====

Total Return(3).. 1.95% 5.86% 5.09% 8.42% 0.07% 4.45% 6.85% 10.99% 6.28% 8.36% 7.44%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to Average
Net Assets ....... 0.59%(4) 0.68% 0.70% 0.70% 0.81% 1.00% 0.99%(5) 0.99%(5) 1.00% 1.00% 1.00%

Ratio of Net Investment
Income to Average
Net Assets .......5.43%(4) 5.53% 5.39% 5.53% 4.17% 3.73% 4.62% 6.88% 8.64% 9.10% 8.60%

Portfolio
Turnover Rate .... 54% 293% 246% 128% 470% 413% 391% 779% 620% 567% 578%

Net Assets,
End of Period
(in thousands) ..$808,464 $519,332 $349,772 $391,331 $396,753 $511,981 $569,430 $534,515 $455,536 $443,475 $440,38
</TABLE>

(1) The fund's fiscal year end was changed from October 31 to March 31
resulting in a five month annual reporting period.

(2) The data presented has been restated to give effect to a 10 for 1 stock
split in the form of a stock dividend that occurred on November 13, 1993.

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

(4) Annualized.

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

PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 13

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
GNMA FUND

1998 1997 1996 1995 1994 1993 1992 1991 1990 1989

PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year ......... $ 10.33 $ 10.45 $ 10.18 $ 10.35 $ 10.88 $ 10.52 $ 10.21 $ 9.85 $ 9.56 $ 9.96
--------- --------- --------- --------- --------- --------- --------- --------- -------- ---------
Income From
Investment Operations

Net Investment
Income .................. 0.69 0.71 0.74 0.72 0.66 0.79 0.86 0.88 0.90 0.89

Net Realized and
Unrealized Gains
(Losses) on
Investment Transactions . 0.34 (0.12) 0.27 (0.18) (0.52) 0.36 0.31 0.36 0.29 (0.40)
--------- --------- --------- --------- --------- --------- --------- --------- -------- ---------
Total From Investment
Operations .............. 1.03 0.59 1.01 0.54 0.14 1.15 1.17 1.24 1.19 0.49
--------- --------- --------- --------- --------- --------- --------- --------- -------- ---------
Distributions

From Net
Investment Income ....... (0.69) (0.71) (0.74) (0.71) (0.66) (0.79) (0.86) (0.88) (0.90) (0.89)

From Net Realized Gains
on Investment
Transactions ............ -- -- -- -- (0.01) -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- --------- -------- ---------
Total Distributions ..... (0.69) (0.71) (0.74) (0.71) (0.67) (0.79) (0.86) (0.88) (0.90) (0.89)
--------- --------- --------- --------- --------- --------- --------- --------- -------- ---------
Net Asset Value,
End of Year ............... $ 10.67 $ 10.33 $ 10.45 $ 10.18 $ 10.35 $ 10.88 $ 10.52 $ 10.21 $ 9.85 $ 9.56
========= ========= ========= ========= ========= ========= ========= ========= ======== =========

Total Return(1) ......... 10.21% 5.84% 10.08% 5.53% 1.30% 11.28% 11.85% 13.16% 12.73% 5.07%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(2) .. 0.58% 0.55% 0.58% 0.58% 0.54% 0.56% 0.62% 0.72% 0.75% 0.75%

Ratio of Net
Investment Income
to Average Net Assets ..... 6.49% 6.84% 6.98% 7.08% 6.12% 7.31% 8.18% 8.85% 9.04% 9.11%

Portfolio Turnover Rate ... 133% 105% 64% 120% 49% 71% 97% 207% 433% 497%

Net Assets, End of
Year (in millions) ........ $ 1,286 $ 1,119 $ 1,120 $ 980 $ 1,129 $ 1,160 $ 724 $ 409 $ 290 $ 253
</TABLE>

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

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

14 PERFORMANCE INFORMATION OF OTHER CLASS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
INFLATION-ADJUSTED TREASURY

1998 1997(1)

PER-SHARE DATA

<S> <C> <C>
Net Asset Value, Beginning of Period .................... $ 9.74 $ 10.00
--------- ---------

Income From Investment Operations

Net Investment Income ................................. 0.44 0.06

Net Unrealized Losses on Investment Transactions ...... (0.11) (0.26)
--------- ---------
Total From Investment Operations ...................... 0.33 (0.20)
--------- ---------
Distributions

From Net Investment Income ............................ (0.44) (0.06)
--------- ---------
Net Asset Value, End of Period .......................... $ 9.63 $ 9.74
========= =========

Total Return(2) ....................................... 3.45% (1.98)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ....... 0.50% 0.50%(3)

Ratio of Net Investment Income to Average Net Assets .... 4.45% 5.03%(3)

Portfolio Turnover Rate ................................. 69% --

Net Assets, End of Period (in thousands) ................ $ 5,279 $ 2,277
</TABLE>

(1) February 10, 1997 (inception) through March 31, 1997.

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

(3) Annualized.

PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 15

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

Each fund (except Short-Term Government and the GNMA Fund) seeks income
exempt from state taxes by investing in U.S. government securities whose
interest payments are state tax-exempt. As a result, these funds' dividend
distributions are expected to be exempt from state income tax. See page 27 for
more information on tax treatment of the funds' distributions.

THE MONEY MARKET FUND

The Money Market Fund seeks to maintain a $1.00 share price, although there
is no guarantee it will be able to do so. Shares of the Money Market Fund are
neither insured nor guaranteed by the U.S. government.

GOVERNMENT AGENCY

The U.S. government provides varying levels of financial support to its
agencies and instrumentalities.

THE U.S. TREASURY FUNDS

SHORT-TERM TREASURY, INTERMEDIATE-TERM
TREASURY, LONG-TERM TREASURY

16 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

securities, all of which are also backed by the direct full faith and credit
pledge of the U.S. government. In addition, the funds may invest up to 35% of
their total assets in securities issued by agencies and instrumentalities of the
U.S. government.

INFLATION-ADJUSTED TREASURY

Inflation-Adjusted Treasury may be appropriate for investors who are seeking
to protect all or a part of their investment portfolio from the effects of
inflation. Traditional U.S. Treasury fixed-principal notes and bonds pay a
stated return or rate of interest in dollars and are redeemed at their par
amount. Inflation during the period that the securities are outstanding will
diminish the future purchasing power of these dollars. Inflation-Adjusted
Treasury is designed to serve as a vehicle to protect against this diminishing
effect.

PROSPECTUS INFORMATION REGARDING THE FUNDS 17

inflation-indexed Treasury securities. The current income generated by
Inflation-Adjusted Treasury will vary with month to month changes in the CPI
index and may be substantially more or substantially less than traditional
fixed-principal securities.

Inflation-indexed securities in which the fund may invest are relatively new
securities. There are special investment risks, particularly share price
volatility and potential adverse tax consequences, associated with investment in
inflation-indexed securities. These risks are described in the section titled
"Risk Factors and Investment Techniques," on this page. You should read that
section carefully to make sure you understand the nature of Inflation-Adjusted
Treasury before you invest in it.

THE GOVERNMENT AGENCY FUNDS

SHORT-TERM GOVERNMENT

GNMA FUND

The GNMA 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.

RISK FACTORS AND INVESTMENT TECHNIQUES

U.S. GOVERNMENT SECURITIES

A number of U.S. government agencies and government-sponsored organizations
issue debt securities. These agencies generally are created by Congress to
fulfill a specific need, such as providing credit to home buyers or farmers.
Among these agencies are the Federal Home Loan Banks, the Federal Farm Credit
Banks, the Student Loan Marketing Association and the Resolution Funding
Corporation.

18 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

MORTGAGE-BACKED SECURITIES

ADJUSTABLE-RATE MORTGAGE SECURITIES

The mortgages that collateralize ARMs issued by GNMA are fully guaranteed by
the Federal Housing Administration or the Department of Veterans Affairs, which
are divisions of the U.S. government. The mortgages that collateralize ARMs
issued by FNMA or FHLMC typically are conventional residential mortgages that
conform to standards prescribed by FNMA or FHLMC and are guaranteed by those
instrumentalities.

COLLATERALIZED MORTGAGE OBLIGATIONS

PROSPECTUS INFORMATION REGARDING THE FUNDS 19

* Are collateralized by pools of mortgages in which payment of principal
and interest of each mortgage is guaranteed by an agency or
instrumentality of the U.S. government;

* Are collateralized by pools of mortgages in which payment of principal
and interest are guaranteed by the issuer, and the guarantee is
collateralized by U.S. government securities; or

STRIPPED MORTGAGE-BACKED SECURITIES

Short-Term Government's investments in stripped mortgage securities together
with investment's in illiquid securities may not exceed 15% of net assets.

INFLATION-INDEXED TREASURY SECURITIES

Inflation-indexed Treasury securities may be attractive to investors seeking
an investment backed by the full faith and credit of the U.S. government that
provides a return in excess of the rate of inflation. These securities are new
to the U.S. market, having first been sold in January 1997. There is uncertainty
as to how these securities will be treated by the marketplace. See "Development
of Inflation-Indexed Securities Market" on page 21. Inflation-indexed Treasury
securities will be auctioned and issued on a quarterly basis.

STRUCTURE AND INFLATION INDEX

INDEXING METHODOLOGY

TAXATION

20 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

payments are taxable when received or accrued. The inflation adjustment to the
principal is subject to tax in the year adjustment is made, not at maturity of
the security when the cash from the repayment of principal is received. If an
upward adjustment has been made (which typically should happen), investors in
non-tax deferred accounts will pay taxes on this amount currently. Decreases in
the indexed principal can only be deducted from current or previous interest
payments reported as income.

U.S GOVERNMENT AGENCIES

DEVELOPMENT OF INFLATION-INDEXED SECURITIES MARKET

SHARE PRICE VOLATILITY

PROSPECTUS INFORMATION REGARDING THE FUNDS 21

do change, inflation-indexed securities prices will be more sensitive to these
changes than conventional bonds, since these securities were sold originally
based upon a "real" interest rate that is no longer prevailing. Should market
expectations for real interest rates rise, the price of inflation-indexed
securities and the share price of Inflation-Adjusted Treasury will fall.
Investors in the fund should be prepared to accept not only this share price
volatility but also the possible adverse tax consequences it may cause.

REPURCHASE AGREEMENTS

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

Each of the funds, with the exception of Government Agency, may invest in
repurchase agreements with respect to any security in which that fund is
authorized to invest, even if the remaining maturity of the underlying security
would make that security ineligible for purchase by such fund.

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

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

PORTFOLIO TURNOVER

The portfolio turnover rates of the U.S. Treasury Funds and the Government
Agency Funds are shown in the financial information of this Prospectus.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

22 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

made. Delivery of and payment for these securities typically occur 15 to 45 days
after the commitment to purchase. Market rates of interest on debt securities at
the time of delivery may be higher or lower than those contracted for on the
when-issued security. Accordingly, the value of such security may decline prior
to delivery, which could result in a loss to the fund. A separate account for
each fund consisting of cash or appropriate liquid assets in an amount at least
equal to the when-issued commitments will be established and maintained with the
custodian. No income will accrue to the fund prior to delivery.

CASH MANAGEMENT

Up to 10% of the funds' total assets may be invested in this manner.

OTHER TECHNIQUES

PERFORMANCE ADVERTISING

From time to time, the funds may advertise performance data. fund
performance may be shown by presenting one or more performance measurements,
including cumulative total return or average annual total return, yield,
effective yield and tax-equivalent yield (for tax-exempt funds). Performance
data may be quoted separately for the Advisor Class and for the other class.

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

A tax-equivalent yield demonstrates the taxable yield necessary to produce
an after-tax yield equivalent to that of a mutual fund that invests in exempt
obligations. Each fund (with the exception of Short-Term Government and the GNMA
Fund) may quote tax-equivalent yield, which show the taxable yields an investor
would have to earn before taxes to equal the fund's tax-free yield. As a
prospective investor in the funds, you should determine whether your state
tax-equivalent yield is likely to be higher with a taxable or with a tax-exempt
fund. To determine this, you may use the formula depicted below.

PROSPECTUS INFORMATION REGARDING THE FUNDS 23

The tax-equivalent yield is based on each fund's current state tax-free
yield and your state income tax rate. The formula is:

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

24 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

The following section explains how to purchase, exchange and redeem Advisor
Class shares of the funds offered by this Prospectus.

HOW TO PURCHASE AND SELL AMERICAN CENTURY
FUNDS

One or more of the funds offered by this Prospectus is available as an
investment option under your employer-sponsored retirement or savings plan or
through or in connection with a program, product or service offered by a
financial intermediary, such as a bank, broker-dealer or an insurance company.
Since all records of your share ownership are maintained by your plan sponsor,
plan recordkeeper, or other financial intermediary, all orders to purchase,
exchange and redeem shares must be made through your employer or other financial
intermediary, as applicable.

If you are purchasing through a retirement or savings plan, the
administrator of your plan or your employee benefits office can provide you with
information on how to participate in your plan and how to select American
Century funds as an investment option.

If you are purchasing through a financial intermediary, you should contact
your service representative at the financial intermediary for information about
how to select American Century funds.

If you have questions about a fund, see "Investment Policies of the Funds,"
page 16, or call one of our Institutional Service Representatives at
1-800-345-3533.

Orders to purchase shares are effective on the day we receive payment. See
"When Share Price Is Determined," page 26.

We may discontinue offering shares generally in the funds (including any
class of shares of a fund) or in any particular state without notice to
shareholders.

HOW TO EXCHANGE FROM ONE AMERICAN CENTURY
FUND TO ANOTHER

Your plan or program may permit you to exchange your investment in the
shares of a fund for shares of another fund in our family. See your plan
administrator, employee benefits office or financial intermediary for details on
the rules in your plan governing exchanges.

HOW TO REDEEM SHARES

Subject to any restrictions imposed by your employer's plan or financial
intermediary's program, you can sell ("redeem") your shares through the plan or
financial intermediary at their net asset value. Your plan administrator,
trustee, or financial intermediary or other designated person must provide us
with redemption instructions. The shares will be redeemed at the net asset value
next computed after receipt of the instructions in good order. See "When Share
Price Is Determined," page 26. If you have any questions about how to redeem,
contact your plan administrator, employee benefits office, or service
representative at your financial intermediary, as applicable.

TELEPHONE SERVICES

INVESTORS LINE

To request information about our funds and a current Prospectus, or get
answers to any questions that you may have about the funds and the services we
offer, call one of our Institutional Service Representatives at 1-800-345-3533.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 25

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

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

HOW SHARE PRICE IS DETERMINED

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

Debt securities not traded on a principal securities exchange are valued
through valuations obtained

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

from a commercial pricing service or at the most recent mean of the bid and
asked prices provided by investment dealers in accordance with procedures
established by the Board of Trustees.

Pursuant to a determination by the Money Market Fund's Board of Trustees and
Rule 2a-7 under the Investment Company Act of 1940, portfolio securities of the
funds are valued at amortized cost. When a security is valued at amortized cost,
it is valued at its cost when purchased, and thereafter by assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset values of the Investor Class of the funds are published in
leading newspapers daily. The yields of the Money Market Fund are published
weekly in leading financial publications and daily in many local newspapers.
Because the total expense ratio for the Advisor Class shares is 0.25% higher
than the Investor Class, their net asset values will be lower than the Investor
Class. The net asset values of the Advisor Class may be obtained by calling us.

DISTRIBUTIONS

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

You will begin to participate in the distributions the day AFTER your
purchase is effective. See "When Share Price Is Determined," page 26. If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed (other than by CheckWriting), the
distribution on the redeemed shares will be included with your redemption
proceeds.

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

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

TAXES

TAX-DEFERRED ACCOUNTS

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

subject to current taxation, but will accumulate in your account under the plan
on a tax-deferred basis.

TAXABLE ACCOUNTS

Inflation-indexed securities purchased by Inflation-Adjusted Treasury accrue
additional interest for federal income tax purposes in addition to the current
interest paid. This additional interest is commonly referred to as "imputed
income." Inflation- Adjusted Treasury must distribute this imputed income to
shareholders as ordinary income dividends. In periods of high inflation, it is
possible that the imputed income earned by Inflation-Adjusted Treasury will
exceed current interest earned.

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

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

shareholders have held such shares for a period of more than 12 months, but no
more than 18 months and long-term subject to tax at a maximum rate of 20%,
minimum of 10%, (20% rate gain/loss) if shareholders have held such shares for a
period of more than 18 months. If a loss is realized on the redemption of fund
shares, the reinvestment in additional fund shares within 30 days before or
after the redemption may be subject to the "wash sale" rules of the Internal
Revenue Code, resulting in a postponement of the recognition of such loss for
federal income tax purposes.

MANAGEMENT

INVESTMENT MANAGEMENT

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

JEREMY FLETCHER, Associate Portfolio Manager, has been a member of the team
that manages the funds in

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 29

American Century Government Income Trust since August 1997. Mr. Fletcher joined
American Century in 1991. Before being promoted to his current position, Mr.
Fletcher was a portfolio administrator. He holds bachelor's degrees in economics
and mathematics from Claremont McKenna College and is a candidate for the
Chartered Financial Analyst designation.

For the services provided to the funds, the manager receives a monthly fee
based on a percentage of the average net assets of each fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category which are managed by the manager (the "Investment Category
Fee"). For example, when calculating the fee for a Money Market Fund, all of the
assets of the money market funds managed by the manager are aggregated. The
three investment categories are: Money Market Funds, Bond Funds and Equity
Funds. Second, a separate fee rate schedule is applied to the assets of all of
the funds managed by the manager (the "Complex Fee"). The Investment Category
Fee and the Complex Fee are then added to determine the unified management fee
payable by the fund to the manager. Currently, the Investment Category Fee for
each of the funds is an annual rate of the average net assets of the fund as
follows: Government Agency, 0.18%; Short-Term Treasury, 0.23%; Intermediate-Term
Treasury, 0.21%; Long-Term Treasury, 0.22%; Inflation-Adjusted Treasury, 0.34%;
and Short-Term Government and the GNMA Fund, 0.29%. The Complex Fee is currently
an annual rate of 0.05% of the average net assets of a fund. Further information
about the calculation of the annual management fee is contained in the Statement
of Additional Information.

CODE OF ETHICS

TRANSFER AND ADMINISTRATIVE SERVICES

From time to time, special services may be offered to shareholders who
maintain higher share balances

30 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

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

YEAR 2000 ISSUES

DISTRIBUTION OF FUND SHARES

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

As agent for the funds and the manager, the Distributor enters into
contracts with various banks, broker-dealers, insurance companies and other
financial intermediaries with respect to the sale of the funds' shares and/or
the use of the funds' shares in various financial services. The manager (or an
affiliate) pays all expenses incurred in promoting sales of, and distributing,
the Advisor Class and in securing such services out of the Rule 12b-1 fees
described in the section that follows.

SERVICE AND DISTRIBUTION FEES

Rule 12b-1 adopted by the SEC under the Invest-ment Company Act permits
investment companies that adopt a written plan to pay certain expenses
associated with the distribution of their shares. Pursuant to that rule, the
funds' Board of Trustees and the initial shareholder of the funds' Advisor Class
shares have approved and adopted a Master Distribution and Shareholder Services
Plan (the "Plan"). Pursuant to the Plan, each fund pays the manager a
shareholder services fee and a distribution

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 31

fee, each equal to 0.25% (for a total of 0.50%) per annum of the average daily
net assets of the shares of the fund's Advisor Class. The shareholder services
fee is paid for the purpose of paying the costs of securing certain shareholder
and administrative services, and the distribution fee is paid for the purpose of
paying the costs of providing various distribution services. All or a portion of
such fees are paid by the manager to the banks, broker-dealers, insurance
companies or other financial intermediaries through which such shares are made
available.

The Plan has been adopted and will be administered in accordance with the
requirements of Rule 12b-1 under the Investment Company Act. For additional
information about the Plan and its terms, see "Master Distribution and
Shareholder Services Plan" in the Statement of Additional Information. Fees paid
pursuant to the Plan may be paid for shareholder services and the maintenance of
accounts and therefore may constitute "service fees" for purposes of applicable
rules of the National Association of Securities Dealers.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

The principal office of the funds is American Century Tower, 4500 Main
Street, P.O. Box 419385, Kansas City, Missouri 64141-6385. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-3533 (international
calls: 816-531-5575).

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

American Century offers two classes of each of the funds offered by this
Prospectus: an Investor Class and an Advisor Class. The shares offered by this
Prospectus are Advisor Class shares.

The Investor Class is primarily made available to retail investors. This
other class has different fees, expenses, and/or minimum investment requirements
than the Advisor Class. The difference in the fee structures among the classes
is the result of their separate arrangements for shareholder and distribution
services and not the result of any difference in amounts charged by the manager
for core investment advisory services. Accordingly, the core investment advisory
expenses do not vary by class. Different fees and expenses will affect
performance. For additional information concerning the Investor Class of shares,
call us at 1-800-345-2021.

32 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 33

P.O. Box 419385
Kansas City, Missouri
64141-6385

Institutional Services:
1-800-345-3533 or 816-531-5575

Telecommunications Device for the Deaf:
1-800-345-1833 or 816-444-3038

Fax: 816-340-4655

www.americancentury.com

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

9808 [recycled logo]
SH-BKT-12806 Recycled
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

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

AUGUST 1, 1998

BENHAM GROUP(reg.tm)

Capital Preservation
Government Agency
Short-Term Treasury
Intermediate-Term Treasury
Long-Term Treasury
Short-Term Government
GNMA Fund
Inflation-Adjusted Treasury

STATEMENT OF ADDITIONAL INFORMATION

AUGUST 1, 1998

AMERICAN CENTURY GOVERNMENT INCOME TRUST

This Statement is not a prospectus but should be read in conjunction with the
funds' current Prospectus dated August 1, 1998. The funds' annual reports, which
are dated March 31, 1998, are incorporated herein by reference. The funds'
(except Short-Term Government) semiannual reports, which are dated September 30,
1997, are also incorporated herein by reference. In addition, Short-Term
Government's semiannual report, which is dated September 30, 1997, is
incorporated herein by reference. Please retain this document for future
reference. To obtain the Prospectus, call American Century Investments toll-free
at 1-800-345-2021 (international calls: 816-531-5575), or write P.O. Box 419200,
Kansas City, Missouri 64141-6200.

TABLE OF CONTENTS

Investment Policies and Techniques .......................................... 2
Investment Restrictions ..................................................... 8
Portfolio Transactions ...................................................... 9
Valuation of Portfolio Securities ........................................... 10
Performance ................................................................. 10
Multiple Class Performance Advertising ...................................... 12
About the Trust ............................................................. 12
Multiple Class Structure .................................................... 13
Trustees and Officers ....................................................... 15
Management .................................................................. 16
Transfer and Administrative Services ........................................ 18
Distribution of Fund Shares ................................................. 19
Additional Purchase and Redemption Information .............................. 19
Other Information ........................................................... 20

NOTE: Throughout this document, Short-Term Treasury, Intermediate-Term
Treasury, Long-Term Treasury, Short-Term Government, GNMA Fund and
Inflation-Adjusted Treasury are referred to collectively as the "Variable-Price
Funds." Capital Preservation and Government Agency are referred to as the "Money
Market Funds."

STATEMENT OF ADDITIONAL INFORMATION 1

INVESTMENT POLICIES AND TECHNIQUES

The following pages provide a more detailed description of the securities
and investment practices identified in the Prospectus. Unless otherwise noted,
the policies described in this Statement of Additional Information are not
fundamental and may be changed by the Board of Trustees.

REPURCHASE AGREEMENTS (VARIABLE-PRICE FUNDS)

In a repurchase agreement (a "repo"), a fund buys a security at one price
and simultaneously agrees to sell it back to the seller at an agreed upon price
on a specified date (usually within seven days from the date of purchase) or on
demand. The repurchase price exceeds the purchase price by an amount that
reflects an agreed-upon rate of return and that is unrelated to the interest
rate on the underlying security. Delays or losses could result if the other
party to the agreement defaults or becomes bankrupt.

The funds may engage in repurchase agreements collateralized by U.S.
Treasury bills, notes, and bonds, or by mortgage-backed GNMA certificates, which
are guaranteed by the Government National Mortgage Association and backed by the
full faith and credit of the U.S. government.

Repos may involve risks not associated with direct investments in U.S.
government debt securities. If the seller fails to complete the terms of the
agreement, the fund may experience delays in recovering its cash or incur costs
in the disposal of securities it has purchased under the agreement. A fund could
also suffer a loss if the securities decline in value before they can be sold in
the open market.

American Century Investment Management, Inc. (the manager) attempts to
minimize the risks associated with repurchase agreements by adhering to written
guidelines which govern repurchase agreements. These guidelines strictly govern
(i) the type of securities which may be acquired and held under repurchase
agreements; (ii) collateral requirements for sellers under repurchase
agreements; (iii) the amount of a fund's net assets that may be committed to
repurchase agreements that mature in more than seven days; and (iv) the manner
in which the fund must take delivery of securities subject to repurchase
agreements. Moreover, the Board of Trustees reviews and approves, on a quarterly
basis, the creditworthiness of brokers, dealers and banks with whom a fund may
enter into repurchase agreements. A fund may enter into a repurchase agreement
only with an entity that appears on a list of those which have been approved by
the board as sufficiently creditworthy.

The funds have received permission from the Securities and Exchange
Commission (SEC) to participate in joint repurchase agreements collateralized by
U.S. government securities with other mutual funds advised by the manager or its
affiliates. Joint repos are expected to increase the income a fund can earn from
repo transactions without increasing the risks associated with these
transactions.

Under the Investment Company Act of 1940 (the "Investment Company Act"),
repos are considered to be loans.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

The funds may engage in securities transactions on a when-issued or forward
commitment basis, in which the transaction price and yield are each fixed at the
time the commitment is made, but payment and delivery occur at a future date
(typically 15 to 45 days later).

When purchasing securities on a when-issued or forward commitment basis,
each fund assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Although a fund will make commitments to purchase or
sell securities with the intention of actually receiving or delivering them, it
may sell the securities before the settlement date if doing so is deemed
advisable as a matter of investment strategy.

In purchasing securities on a when-issued or forward commitment basis, a
fund will establish and maintain until the settlement date a segregated account
consisting of cash or appropriate liquid securities in an amount sufficient to
meet the purchase price. When the time comes to pay for the when-issued
securities, the fund will meet its obligations with available cash, through the
sale of securities, or, although it would not normally expect to do so, by
selling the when-issued securities themselves (which may have a market value
greater or less than the fund's payment obligation). Selling securities to meet
when-issued or forward commitment obligations may generate taxable capital gains
or losses.

2 AMERICAN CENTURY INVESTMENTS

ROLL TRANSACTIONS

A fund may sell a security and at the same time make a commitment to
purchase the same or a comparable security at a future date and specified price.
Conversely, a fund may purchase a security and at the same time make a
commitment to sell the same or a comparable security at a future date and
specified price. These types of transactions are executed simultaneously in what
are known as "dollar-rolls," "cash and carry," or financing transactions. For
example, a broker-dealer may seek to purchase a particular security that a fund
owns. The fund will sell that security to the broker-dealer and simultaneously
enter into a forward commitment agreement to buy it back at a future date. This
type of transaction generates income for the fund if the dealer is willing to
execute the transaction at a favorable price in order to acquire a specific
security. As an operating policy, the manager limits forward commitment
transactions (including roll transactions) to 35% of a fund's total assets and
will not enter into when-issued or forward commitment transactions with
settlement dates that exceed 120 days.

When engaging in roll transactions, the fund will maintain until the
settlement date a segregated account consisting of cash or appropriate liquid
securities in an amount sufficient to meet the purchase price, as described
above.

INTEREST RATE RESETS ON FLOATING-RATE U.S. GOVERNMENT AGENCY SECURITIES (ALL
FUNDS EXCEPT CAPITAL PRESERVATION)

Interest rate resets on floating-rate U.S. government agency securities
generally occur at intervals of one year or less in response to changes in a
predetermined interest rate index. There are two main categories of indices,
those based on U.S. Treasury securities and those derived from a calculated
measure, such as a cost of funds index. Commonly used indices include the
three-month, six-month, and one-year Treasury bill rate; the two-year Treasury
note yield; the Eleventh District Federal Home Loan Bank Cost of Funds Index
(EDCOFI); and the London Interbank Offered Rate (LIBOR). Fluctuations in the
prices of floating-rate U.S. government agency securities are typically
attributed to differences between the coupon rates on these securities and
prevailing market interest rates between interest rate reset dates.

MASTER DEMAND NOTES (GOVERNMENT AGENCY ONLY)

Government Agency may acquire variable-rate master demand notes issued by
U.S. government agencies such as the Student Loan Marketing Association. Master
demand notes allow the fund to lend money at varying rates of interest under
direct agreements with borrowers. The fund may adjust the amount of money loaned
under a master demand note daily or weekly up to the full amount specified in
the agreement, and the borrower may prepay up to the full amount of the loan
without penalty. Master demand notes may or may not be backed by bank letters of
credit. Although, as direct agreements between lenders and borrowers, there is
no secondary market for master demand notes, these instruments are redeemable
(immediately repayable by the borrower) at par plus accrued interest at any
time.

SECURITIES LENDING (ALL FUNDS EXCEPT CAPITAL PRESERVATION AND INTERMEDIATE-TERM
TREASURY)

The manager has received approval from the Board of Trustees to engage in
securities lending on behalf of the funds. Such loans are made with the
intention of allowing a fund to earn additional income by lending its portfolio
securities to banks and broker-dealers. If a borrower defaulted on a securities
loan, the lending fund could experience delays in recovering the securities it
loaned; if the value of the loaned securities increased over the value of the
collateral, the fund could suffer a loss. To minimize the risk of default on
securities loans, the manager adheres to guidelines prescribed by the Board of
Trustees governing lending of securities. These guidelines strictly govern (i)
the type and amount of collateral that must be received by the fund; (ii) the
circumstances under which additions to that collateral must be made by
borrowers; (iii) the return received by the fund on the loaned securities; (iv)
the limitations on the percentage of fund assets on loan; and (v) the credit
standards applied in evaluating potential borrowers of portfolio securities. In
addition, the guidelines require that the fund have the option to terminate any
loan of

STATEMENT OF ADDITIONAL INFORMATION 3

a portfolio security at any time and set requirements for recovery of securities
from borrowers.

MORTGAGE-BACKED SECURITIES (SHORT-TERM GOVERNMENT AND GNMA FUND)

BACKGROUND. A mortgage-backed security represents an ownership interest in a
pool of mortgage loans. The loans are made by financial institutions to finance
home and other real estate purchases. As the loans are repaid, investors receive
payments of both interest and principal.

Like fixed-income securities such as U.S. Treasury bonds, mortgage-backed
securities pay a stated rate of interest over the life of the security. However,
unlike a bond, which returns principal to the investor in one lump sum at
maturity, mortgage-backed securities return principal to the investor in
increments over the life of the security.

Because the timing and speed of principal repayments vary, the cash flow on
mortgage securities is irregular. If mortgage holders sell their homes,
refinance their loans, prepay their mortgages, or default on their loans, the
principal is distributed pro rata to investors.

As with other fixed-income securities, the prices of mortgage securities
fluctuate in response to changing interest rates; when interest rates fall, the
prices of mortgage securities rise, and vice versa. Changing interest rates have
additional significance for mortgage-backed securities investors, however,
because they influence prepayment rates (the rates at which mortgage holders
prepay their mortgages), which in turn affect the yields on mortgage-backed
securities. When interest rates decline, prepayment rates generally increase.
Mortgage holders take advantage of the opportunity to refinance their mortgages
at lower rates with lower monthly payments. When interest rates rise, mortgage
holders are less inclined to refinance their mortgages. The effect of prepayment
activity on yield depends on whether the mortgage-backed security was purchased
at a premium or at a discount.

A fund may get back principal sooner than it expected because of accelerated
prepayments. Under these circumstances, the fund might have to reinvest returned
principal at rates lower than it would have earned if principal payments were
made on schedule. Conversely, a mortgage-backed security may exceed its
anticipated life if prepayment rates decelerate unexpectedly. Under these
circumstances, a fund might miss an opportunity to earn interest at higher
prevailing rates.

GINNIE MAE CERTIFICATES. The Government National Mortgage Association (GNMA
or Ginnie Mae) is a wholly owned corporate instrumentality of the United States
within the Department of Housing and Urban Development. The National Housing Act
of 1934 (Housing Act), as amended, authorizes Ginnie Mae to guarantee the timely
payment of interest and repayment of principal on certificates that are backed
by a pool of mortgage loans insured by the Federal Housing Administration under
the Housing Act, or by Title V of the Housing Act of 1949 (FHA Loans), or
guaranteed by the Veterans' Affairs under the Servicemen's Readjustment Act of
1944 (VA Loans), as amended, or by pools of other eligible mortgage loans. The
Housing Act provides that the full faith and credit of the U.S. government is
pledged to the payment of all amounts that may be required to be paid under any
guarantee. Ginnie Mae has unlimited authority to borrow from the U.S. Treasury
in order to meet its obligations under this guarantee.

Ginnie Mae certificates represent a pro rata interest in one or more pools
of the following types of mortgage loans: (a) fixed-rate level payment mortgage
loans; (b) fixed-rate graduated payment mortgage loans (GPMs); (c) fixed-rate
growing equity mortgage loans (GEMs); (d) fixed-rate mortgage loans secured by
manufactured (mobile) homes (MHs); (e) mortgage loans on multifamily residential
properties under construction (CLCs); (f) mortgage loans on completed
multifamily projects (PLCs); (g) fixed-rate mortgage loans that use escrowed
funds to reduce the borrower's monthly payments during the early years of the
mortgage loans (buydown mortgage loans); and (h) mortgage loans that provide for
payment adjustments based on periodic changes in interest rates or in other
payment terms of the mortgage loans.

FANNIE MAE CERTIFICATES. The Federal National Mortgage Association (FNMA or
Fannie Mae) is a federally chartered and privately owned corporation established
under the Federal National Mortgage Association Charter Act. Fannie Mae was
originally established in 1938 as a U.S. government agency designed to provide
supplemental liquidity to the

4 AMERICAN CENTURY INVESTMENTS

mortgage market and was reorganized as a stockholder-owned and privately managed
corporation by legislation enacted in 1968. Fannie Mae acquires capital from
investors who would not ordinarily invest in mortgage loans directly and thereby
expands the total amount of funds available for housing. This money is used to
buy home mortgage loans from local lenders, replenishing the supply of capital
available for mortgage lending.

Fannie Mae certificates represent a pro rata interest in one or more pools
of FHA Loans, VA Loans, or, most commonly, conventional mortgage loans (i.e.,
mortgage loans that are not insured or guaranteed by a governmental agency) of
the following types: (a) fixed-rate level payment mortgage loans; (b) fixed-rate
growing equity mortgage loans; (c) fixed-rate graduated payment mortgage loans;
(d) adjustable-rate mortgage loans; and (e) fixed-rate mortgage loans secured by
multifamily projects.

Fannie Mae certificates entitle the registered holder to receive amounts
representing a pro rata interest in scheduled principal and interest payments
(at the certificate's pass-through rate, which is net of any servicing and
guarantee fees on the underlying mortgage loans), any principal prepayments, and
a proportionate interest in the full principal amount of any foreclosed or
otherwise liquidated mortgage loan. The full and timely payment of interest and
repayment of principal on each Fannie Mae certificate is guaranteed by Fannie
Mae; this guarantee is not backed by the full faith and credit of the U.S.
government.

FREDDIE MAC CERTIFICATES. The Federal Home Loan Mortgage Corporation (FHLMC
or Freddie Mac) is a corporate instrumentality of the United States created
pursuant to the Emergency Home Finance Act of 1970 (FHLMC Act), as amended.
Freddie Mac was established primarily for the purpose of increasing the
availability of mortgage credit. Its principal activity consists of purchasing
first-lien conventional residential mortgage loans (and participation interests
in such mortgage loans) and reselling these loans in the form of mortgage-backed
securities, primarily Freddie Mac certificates.

Freddie Mac certificates represent a pro rata interest in a group of
mortgage loans (a Freddie Mac certificate group) purchased by Freddie Mac. The
mortgage loans underlying Freddie Mac certificates consist of fixed- or
adjustable-rate mortgage loans with original terms to maturity of between 10 and
30 years, substantially all of which are secured by first-liens on one- to
four-family residential properties or multifamily projects. Each mortgage loan
must meet standards set forth in the FHLMC Act. A Freddie Mac certificate group
may include whole loans, participation interests in whole loans, undivided
interests in whole loans, and participations composing another Freddie Mac
certificate group.

Freddie Mac guarantees to each registered holder of a Freddie Mac
certificate the timely payment of interest at the rate provided for by the
certificate. Freddie Mac also guarantees ultimate collection of all principal on
the related mortgage loans, without any offset or deduction, but generally does
not guarantee the timely repayment of principal. Freddie Mac may remit principal
at any time after default on an underlying mortgage loan, but no later than 30
days following (a) foreclosure sale, (b) payment of a claim by any mortgage
insurer, or (c) the expiration of any right of redemption, whichever occurs
later, and in any event no later than one year after demand has been made upon
the mortgager for accelerated payment of principal. Obligations guaranteed by
Freddie Mac are not backed by the full faith and credit of the U.S. government.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS). A CMO is a multiclass bond
backed by a pool of mortgage pass-through certificates or mortgage loans. CMOs
may be collateralized by (a) Ginnie Mae, Fannie Mae, or Freddie Mac pass-through
certificates, (b) unsecured mortgage loans insured by the Federal Housing
Administration or guaranteed by the Department of Veterans' Affairs, (c)
unsecuritized conventional mortgages, or (d) any combination thereof.

In structuring a CMO, an issuer distributes cash flow from the underlying
collateral over a series of classes called "tranches." Each CMO is a set of two
or more tranches, with average lives and cash flow patterns designed to meet
specific investment objectives. The average life expectancies of the different
tranches in a four-part deal, for example, might be two, five, seven, and 20
years.

As payments on the underlying mortgage loans are collected, the CMO issuer
pays the coupon rate of interest to the bondholders in each tranche. At the

STATEMENT OF ADDITIONAL INFORMATION 5

outset, scheduled and unscheduled principal payments go to investors in the
first tranches. Investors in later tranches do not begin receiving principal
payments until the prior tranches are paid off. This basic type of CMO is known
as a "sequential pay" or "plain vanilla" CMO.

Some CMOs are structured so that the prepayment or market risks are
transferred from one tranche to another. Prepayment stability is improved in
some tranches if other tranches absorb more prepayment variability.

The final tranche of a CMO often takes the form of a Z-bond, also known as
an "accrual bond" or "accretion bond." Holders of these securities receive no
cash until the earlier tranches are paid in full. During the period that the
other tranches are outstanding, periodic interest payments are added to the
initial face amount of the Z-bond but are not paid to investors. When the prior
tranches are retired, the Z-bond receives coupon payments on its higher
principal balance plus any principal prepayments from the underlying mortgage
loans. The existence of a Z-bond tranche helps stabilize cash flow patterns in
the other tranches. In a changing interest rate environment, however, the value
of the Z-bond tends to be more volatile.

As CMOs have evolved, some classes of CMO bonds have become more prevalent.
The planned amortization class (PAC) and targeted amortization class (TAC), for
example, were designed to reduce prepayment risk by establishing a sinking-fund
structure. PAC and TAC bonds assure to varying degrees that investors will
receive payments over a predetermined period under various prepayment scenarios.
Although PAC and TAC bonds are similar, PAC bonds are better able to provide
stable cash flows under various prepayment scenarios than TAC bonds because of
the order in which these tranches are paid.

The existence of a PAC or TAC tranche can create higher levels of risk for
other tranches in the CMO because the stability of the PAC or TAC tranche is
achieved by creating at least one other tranche-known as a companion bond,
support, or non-PAC bond--that absorbs the variability of principal cash flows.
Because companion bonds have a high degree of average life variability, they
generally pay a higher yield. A TAC bond can have some of the prepayment
variability of a companion bond if there is also a PAC bond in the CMO issue.

Floating-rate CMO tranches (floaters) pay a variable rate of interest that
is usually tied to the London Interbank Offered Rate (LIBOR). Institutional
investors with short-term liabilities, such as commercial banks, often find
floating-rate CMOs attractive investments. "Super floaters" (which float a
certain percentage above LIBOR) and "inverse floaters" (which float inversely to
LIBOR) are variations on the floater structure that have highly variable cash
flows.

STRIPPED MORTGAGE-BACKED SECURITIES (SHORT-TERM GOVERNMENT ONLY). Stripped
mortgage securities are created by segregating the cash flows from underlying
mortgage loans or mortgage securities to create two or more new securities, each
with a specified percentage of the underlying security's principal or interest
payments. Mortgage securities may be partially stripped so that each investor
class receives some interest and some principal. When securities are completely
stripped, however, all of the interest is distributed to holders of one type of
security, known as an interest-only security, or IO, and all of the principal is
distributed to holders of another type of security known as a principal-only
security, or PO. Strips can be created in a pass-through structure or as
tranches of a CMO.

The market values of IOs and POs are very sensitive to interest rate and
prepayment rate fluctuations. POs, for example, increase (or decrease) in value
as interest rates decline (or rise). The price behavior of these securities also
depends on whether the mortgage collateral was purchased at a premium or
discount to its par value. Prepayments on discount coupon POs generally are much
lower than prepayments on premium coupon POs. IOs may be used to hedge a fund's
other investments because prepayments cause the value of an IO strip to move in
the opposite direction from other mortgage-backed securities.

ADJUSTABLE-RATE MORTGAGE LOANS (ARMS). ARMs eligible for inclusion in a
mortgage pool will generally provide for a fixed initial mortgage interest rate
for a specified period of time, generally for either the first three, six, 12,
13, 36, or 60 scheduled monthly payments. Thereafter, the interest rates are
subject to periodic adjustment based on changes in an index.

6 AMERICAN CENTURY INVESTMENTS

ARMs have minimum and maximum rates beyond which the mortgage interest rate
may not vary over the lifetime of the loan. Certain ARMs provide for additional
limitations on the maximum amount by which the mortgage interest rate may adjust
for any single adjustment period. Negatively amortizing ARMs may provide
limitations on changes in the required monthly payment. Limitations on monthly
payments can result in monthly payments that are greater or less than the amount
necessary to amortize a negatively amortizing ARM by its maturity at the
interest rate in effect during any particular month.

There are two types of indices that provide the basis for ARM rate
adjustments: those based on market rates and those based on a calculated
measure, such as a cost of funds index or a moving average of mortgage rates.
Commonly utilized indices include the one-year, three-year, and five-year
constant maturity U.S. Treasury rates (as reported by the Federal Reserve Board)
; the three-month Treasury bill rate; the 180-day Treasury bill rate; rates on
longer-term Treasury securities; the Eleventh District Federal Home Loan Bank
Cost of Funds Index (EDCOFI); the National Median Cost of Funds Index; the
one-month, three-month, six-month, or one-year London Interbank Offered Rate
(LIBOR); or six-month CD rates. Some indices, such as the one-year constant
maturity Treasury rate or three-month LIBOR, are highly correlated with changes
in market interest rates. Other indexes, such as the EDCOFI, tend to lag behind
changes in market rates and be somewhat less volatile over short periods of
time.

The EDCOFI reflects the monthly weighted average cost of funds of savings
and loan associations and savings banks whose home offices are located in
Arizona, California, and Nevada (the Federal Home Loan Bank Eleventh District)
and who are member institutions of the Federal Home Loan Bank of San Francisco
(the FHLB of San Francisco), as computed from statistics tabulated and published
by the FHLB of San Francisco. The FHLB of San Francisco normally announces the
Cost of Funds Index on the last working day of the month following the month in
which the cost of funds was incurred.

One-year and three-year Constant Maturity Treasury (CMT) rates are
calculated by the Federal Reserve Bank of New York, based on daily closing bid
yields on actively traded Treasury securities submitted by five leading
broker-dealers. The median bid yields are used to construct a daily yield curve.

The National Median Cost of Funds Index, similar to the EDCOFI, is
calculated monthly by the Federal Home Loan Bank Board (FHLBB) and represents
the average monthly interest expenses on liabilities of member institutions. A
median, rather than an arithmetic mean, is used to reduce the effect of extreme
numbers.

The London Interbank Offered Rate Index (LIBOR) is the rate at which banks
in London offer Eurodollars in trades between banks. LIBOR has become a key rate
in the U.S. domestic money market because it is perceived to reflect the true
global cost of money.

The manager may invest in ARMs whose periodic interest rate adjustments are
based on new indices as these indices become available.

ZERO-COUPON SECURITIES (SHORT-TERM TREASURY, INTERMEDIATE-TERM TREASURY,
LONG-TERM TREASURY AND INFLATION-ADJUSTED TREASURY)

Zero-coupon U.S. Treasury securities are the unmatured interest coupons and
underlying principal portions of U.S. Treasury notes and bonds. Originally,
these securities were created by broker-dealers who bought Treasury notes and
bonds and deposited these securities with a custodian bank. The broker-dealers
then sold receipts representing ownership interests in the coupons or principal
portions of the notes and bonds. Some examples of zero-coupon securities sold
through custodial receipt programs are CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts) and generic TRs
(Treasury Receipts).

The U.S. Treasury subsequently introduced a program called Separate Trading
of Registered Interest and Principal of Securities (STRIPS). In this program,
eligible securities may be presented to the U.S. Treasury and exchanged for
their component parts, which are then traded in book-entry form. (Book-entry
trading eliminated the bank credit risks associated with broker-dealer sponsored
custodial receipt programs.) STRIPS are direct obligations of the U.S.
government and have the same credit risks as other U.S. Treasury securities.

STATEMENT OF ADDITIONAL INFORMATION 7

Principal and interest on bonds issued by the Resolution Funding Corporation
(REFCORP) have also been separated and issued as stripped securities. The U.S.
government and its agencies may issue securities in zero-coupon form. These
securities are referred to as "original issue zero-coupon securities."

OTHER INVESTMENT COMPANIES

Each of the funds may invest up to 5% of its total assets in any money
market fund, including those advised by the manager, provided that the
investment is consistent with the fund's investment policies and restrictions.
Up to 10% of the funds' total assets may be invested in this manner. Such
purchases will be made in the open market where no commission or profit to a
sponsor or dealer results from the purchase other than the customary brokers'
commissions. As a shareholder of another investment company, a fund would bear,
along with other shareholders, its pro rata portion of the other investment
company's expenses, including advisory fees. These expenses would be in addition
to the management fee that the fund bears directly in connection with its own
operations.

INVESTMENT RESTRICTIONS

The funds' investment restrictions are set forth below. These investment
restrictions are fundamental and may not be changed without approval of "a
majority of the outstanding votes of shareholders" of a fund, as determined in
accordance with the Investment Company Act.

AS A FUNDAMENTAL POLICY, EACH FUND:

1) shall not issue senior securities, except as
permitted under the Investment Company Act of 1940.

2) shall not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in
an amount not exceeding 331/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings).

3) shall not lend any security or make any other loan if, as a result,
more than 331/3% of the fund's total assets would be lent to other
parties, except, (i) through the purchase of debt securities in
accordance with its investment objective, policies and limitations, or
(ii) by engaging in repurchase agreements with respect to portfolio
securities.

4) shall not purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments. This policy shall not
prevent the fund from investment in securities or other instruments
backed by real estate or securities of companies that deal in real
estate or are engaged in the real estate business.

5) shall not concentrate its investments in securities of issuers in a
particular industry (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities).

6) shall not act as an underwriter of securities issued by others, except
to the extent that the fund may be considered an underwriter within the
meaning of the Securities Act of 1933 in the disposition of restricted
securities.

7) shall not purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments; provided that
this limitation shall not prohibit the fund from purchasing or selling
options and futures contracts or from investing in securities or other
instruments backed by physical commodities.

8) shall not invest for purposes of exercising control over management.

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

AS AN OPERATING POLICY, EACH FUND:

a) shall not purchase additional investment securities at any time during
which outstanding borrowings exceed 5% of the total assets of the fund.

b) shall not purchase any securities which would cause 25% or more of the
value of the fund's total assets at the time of purchase to be invested
in the securities of one or more issuers conducting their principal
business activities in the same industry, provided that (i) there is no
limitation with respect to obligations issued or guaranteed by the U.S.
government, any state, territory or possession of the United States,
the District of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions and repurchase agreements
secured by

8 AMERICAN CENTURY INVESTMENTS

such instruments, (ii) wholly-owned finance companies will be
considered to be in the industries of their parents if their activities
are primarily related to financing the activities of the parents, (iii)
utilities will be divided according to their services, for example,
gas, gas transmission, electric and gas, electric and telephone will
each be considered a separate industry, and (iv) personal credit and
business credit businesses will be considered separate industries.

c) [Money Market Funds only] shall not purchase or sell futures contracts
or call options. This limitation does not apply to options attached to,
or acquired or traded together with, their underlying securities, and
does not apply to securities that incorporate features similar to
options or futures contracts.

d) shall not purchase any security or enter into a repurchase agreement
if, as a result, more than 15% of its net assets (10% for the Money
Market Funds) would be invested in repurchase agreements not entitling
the holder to payment of principal and interest within seven days and
in securities that are illiquid by virtue of legal or contractual
restrictions on resale or the absence of a readily available market.

e) shall not sell securities short, unless it owns or has the right to
obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in futures contracts and options
are not deemed to constitute selling securities short.

f) shall not purchase securities on margin, except that the fund may
obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.

For purposes of the investment restriction (5), relating to concentration, a
fund shall not purchase any securities which would cause 25% or more of the
value of the fund's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business activities
in the same industry, provided that (i) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments, (ii) wholly owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents,
(iii) utilities will be divided according to their services, for example, gas,
gas transmission, electric and gas, electric and telephone will each be
considered a separate industry, and (iv) personal credit and business credit
businesses will be considered separate industries.

PORTFOLIO TRANSACTIONS

Each fund's assets are invested by the manager in a manner consistent with
the fund's investment objectives, policies, and restrictions, and with any
instructions the Board of Trustees may issue from time to time. Within this
framework, the manager is responsible for making all determinations as to the
purchase and sale of portfolio securities and for taking all steps necessary to
implement securities transactions on behalf of the funds.

In placing orders for the purchase and sale of portfolio securities, the
manager will use its best efforts to obtain the best possible price and
execution and will otherwise place orders with broker-dealers subject to and in
accordance with any instructions the Board of Trustees may issue from time to
time. The manager will select broker-dealers to execute portfolio transactions
on behalf of the funds solely on the basis of best price and execution.

U.S. government securities generally are traded in the over-the-counter
market through broker-dealers. A broker-dealer is a securities firm or bank that
makes a market for securities by offering to buy at one price and sell at a
slightly higher price. The difference between the prices is known as a spread.

On behalf of the funds, the manager transacts in round lots ($100,000 to $10
million or more) whenever possible. Since commissions are not charged for
round-lot transactions of U.S. Treasury securities, the funds' transaction costs
consist solely of custodian charges and dealer mark-ups. Each fund may hold its
portfolio securities to maturity or sell or swap them

STATEMENT OF ADDITIONAL INFORMATION 9

for others, depending upon the level and slope of, and anticipated changes in,
the yield curve. The funds paid no brokerage commissions during the fiscal year
ended March 31, 1998.

The portfolio turnover rates for each of the Variable-Price funds appear in
the financial information section of the Prospectus.

VALUATION OF PORTFOLIO SECURITIES

Each fund's net asset value per share ("NAV") is calculated as of the close
of business of the New York Stock Exchange (the "Exchange"), usually at 3 p.m.
Central time each day the Exchange is open for business. The Exchange has
designated the following holiday closings for 1998: New Year's Day (observed),
Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas (observed). Although the
funds expect the same holiday schedule to be observed in the future, the
Exchange may modify its holiday schedule at any time.

Each fund's share price is calculated by adding the value of all portfolio
securities and other assets, deducting liabilities, and dividing the result by
the number of shares outstanding. Expenses and interest on portfolio securities
are accrued daily.

Securities held by the Money Market Funds are valued on the basis of
amortized cost. This method involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium paid at the time of purchase. Although this method provides certainty in
valuation, it generally disregards the effect of fluctuating interest rates on
an instrument's market value. Consequently, the instrument's amortized cost
value may be higher or lower than its market value, and this discrepancy may be
reflected in a fund's yield. During periods of declining interest rates, for
example, the daily yield on fund shares computed as described above may be
higher than that of a fund with identical investments priced at market value.
The converse would apply in a period of rising interest rates.

The Money Market Funds each operate pursuant to Investment Company Act Rule
2a-7, which permits valuation of portfolio securities on the basis of amortized
cost. As required by the Rule, the Board of Trustees has adopted procedures
designed to stabilize, to the extent reasonably possible, each Money Market
Fund's price per share as computed for the purposes of sales and redemptions at
$1.00. While the day-to-day operation of each Money Market Fund has been
delegated to the manager, the quality requirements established by the procedures
limit investments to certain instruments that the Board of Trustees has
determined present minimal credit risks and that have been rated in one of the
two highest rating categories as determined by a nationally recognized
statistical rating organization or, in the case of unrated securities, of
comparable quality. The procedures require review of each Money Market Fund's
portfolio holdings at such intervals as are reasonable in light of current
market conditions to determine whether the Money Market Fund's net asset value
calculated by using available market quotations deviates form the per-share
value based on amortized cost. The procedures also prescribe the action to be
taken if such deviation should occur.

Most securities held by the Variable-Price Funds are priced at market value
using prices obtained from an independent pricing service. Other securities are
priced at fair value as determined in good faith pursuant to guidelines
established by the funds' Board of Trustees.

PERFORMANCE

A fund may quote performance in various ways. Historical performance
information will be used in advertising and sales literature and is not
indicative of future results. A fund's share price, yield and return will vary
with changing market conditions.

For the MONEY MARKET FUNDS, yield quotations are based on the change in the
value of a hypothetical investment (excluding realized gains and losses from the
sale of securities and unrealized appreciation and depreciation of securities)
over a seven-day period (base period) and stated as a percentage of the
investment at the start of the base period (base-period return). The base-period
return is then annualized by multiplying it by 365/7, with the resulting yield
figure carried to at least the nearest hundredth of one percent.

Calculations of effective yield begin with the same base-period return used
to calculate yield, but the

10 AMERICAN CENTURY INVESTMENTS

return is then annualized to reflect weekly compounding according to the
following formula:

Effective Yield = [(Base-Period Return + 1)(365/7)] - 1

Each Money Market Fund's yield and effective yield for the seven-day period
ended March 31, 1998, is indicated in the following table:

Fund 7-Day Yield 7-Day Effective Yield
- --------------------------------------------------------------------------------
Capital Preservation 4.94% 5.06%
Government Agency 5.05 5.18
- --------------------------------------------------------------------------------

For the VARIABLE-PRICE FUNDS, yield quotations are based on the investment
income per share earned during a particular 30-day period, less expenses accrued
during the period (net investment income), and are computed by dividing the
fund's net investment income by its share price on the last day of the period,
according to the following formula:

YIELD = 2 [(a - b + 1)(6) - 1]
--------
cd

where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of reimbursements), c = the average daily number of shares
outstanding during the period that were entitled to receive dividends, and d =
the maximum offering price per share on the last day of the period.

Each Variable-Price Fund's yield for the 30-day period ended March 31, 1998,
is indicated in the following table.

30-day Yield
Fund Investor Advisor
- --------------------------------------------------------------------------------
Short-Term Treasury 5.17% 4.92%
Intermediate-Term Treasury 5.29 5.04
Long-Term Treasury 5.55 5.30
Short-Term Government 5.41 N/A
GNMA Fund 6.19 5.90
Inflation-Adjusted Treasury 5.51 N/A
- --------------------------------------------------------------------------------

Total returns quoted in advertising and sales literature reflect all aspects
of a fund's return, including the effect of reinvesting dividends and capital
gain distributions, if any, and any change in the fund's NAV during the period.

Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in a fund over a stated
period and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant throughout the period. For example, a cumulative total return of 100%
over 10 years would produce an average annual total return of 7.18%, which is
the steady annual rate that would result in 100% growth on a compounded basis in
10 years. While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that a fund's performance is
not constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to actual year-to-year
performance.

The funds' average annual returns for the one-year, five-year, 10-year, and
life-of-fund periods are indicated in the following table:

Period Ended March 31, 1998
- --------------------------------------------------------------------------------
Life-of-
Fund One-Year Five-Years Ten-Years Fund
- --------------------------------------------------------------------------------
Capital Preservation(1) 5.06% 4.40% 5.24% 5.32%
Government Agency(2) 5.14 4.50 N/A 4.98
Short-Term Treasury(3) 6.89 4.83 N/A 4.85
Intermediate-Term
Treasury(4) 11.04 5.72 7.54 8.81
Long-Term Treasury(3) 20.48 8.31 N/A 8.66
Short-Term
Government(5) 6.66 4.64 6.13 7.18
GNMA Fund(6) 10.21 6.55 8.64 8.84
Inflation-Adjusted
Treasury(7) 3.45 N/A N/A 1.24
- --------------------------------------------------------------------------------

1 Commenced operations on October 13, 1972.
2 Commenced operations on December 5, 1989.
3 Commenced operations on September 8, 1992.
4 Commenced operations on May 16, 1980.
5 Commenced operations on December 15, 1982.
6 Commenced operations on September 23, 1985.
7 Commenced operations on February 10, 1997.

In addition to average annual total returns, each fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total returns may
be quoted as a percentage or as a dollar amount and may be calculated for a
single investment, a series of investments, or a series of redemptions over any
time period. Total returns

STATEMENT OF ADDITIONAL INFORMATION 11

may be broken down into their components of income and capital (including
capital gains and changes in share price) to illustrate the relationship of
these factors and their contributions to total return. Performance information
may be quoted numerically or in a table, graph, or similar illustration.

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indices of market
performance. Sources of economic data that may be used for such comparisons may
include, but are not limited to, U.S. Treasury bill, note, and bond yields,
money market fund yields, U.S. government debt and percentage held by
foreigners, the U.S. money supply, net free reserves, and yields on
current-coupon GNMAs (source: Board of Governors of the Federal Reserve System);
the federal funds and discount rates (source: Federal Reserve Bank of New York);
yield curves for U.S. Treasury securities and AA/AAA-rated corporate securities
(source: Bloomberg Financial Markets); yield curves for AAA-rated tax-free
municipal securities (source: Telerate); yield curves for foreign government
securities (sources: Bloomberg Financial Markets and Data Resources, Inc.);
total returns on foreign bonds (source: J.P. Morgan Securities Inc.); various
U.S. and foreign government reports; the junk bond market (source: Data
Resources, Inc.); the CRB Futures Index (source: Commodity Index Report); the
price of gold (sources: London a.m./p.m. fixing and New York Comex Spot Price);
rankings of any mutual fund or mutual fund category tracked by Lipper Analytical
Services, Inc. or Morningstar, Inc.; mutual fund rankings published in major
nationally distributed periodicals; data provided by the Investment Company
Institute; Ibbotson Associates, Stocks, Bonds, Bills, and Inflation; major
indices of stock market performance; and indices and historical data supplied by
major securities brokerage or investment advisory firms. The funds may also
utilize reprints from newspapers and magazines furnished by third parties to
illustrate historical performance.

MULTIPLE CLASS PERFORMANCE ADVERTISING

Pursuant to the Multiple Class Plan, the funds may issue additional classes
of existing funds or introduce new funds with multiple classes available for
purchase. To the extent a new class is added to an existing fund, the manager
may, in compliance with SEC and NASD rules, regulations and guidelines, market
the new class of shares using the historical performance information of the
original class of shares. When quoting performance information for the new class
of shares for periods prior to the first full quarter after inception, the
original class' performance will be restated to reflect the expenses of the new
class. For periods after the first full quarter after inception, actual
performance of the new class will be used.

ABOUT THE TRUST

American Century Government Income Trust (the "Trust"), formerly known as
Benham Government Income Trust, is a registered, open-end management investment
company that was organized as a Massachusetts business trust on July 24, 1985.
Currently, there are eight series of the Trust as follows: American Century -
Benham Capital Preservation Fund, American Century - Benham Government Agency
Money Market Fund (formerly known as Benham Government Agency Fund), American
Century - Benham Short-Term Treasury Fund (formerly known as Benham Short-Term
Treasury and Agency Fund), American Century - Benham Intermediate-Term Treasury
Fund (formerly known as Benham Treasury Note Fund), American Century - Benham
Long-Term Treasury Fund (formerly known as Benham Long-Term Treasury and Agency
Fund), American Century - Benham Short-Term Government Fund (formerly known as
American Century - Benham Adjustable Rate Government Securities Fund and Benham
Adjustable Rate Government Securities Fund), American Century - Benham GNMA Fund
(formerly known as Benham GNMA Income Fund), and American Century - Benham
Inflation-Adjusted Treasury Fund. The Board of Trustees may create additional
series from time to time.

The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest without par value,
which may be issued in series (funds). Shares issued are fully paid and
nonassessable when issued and have no preemptive, conversion, or similar rights.

Each series votes separately on matters affecting that series exclusively.
Voting rights are not cumula-

12 AMERICAN CENTURY INVESTMENTS

tive, so that investors holding more than 50% of the Trust's (i.e., all series')
outstanding shares may elect a Board of Trustees. The Trust has instituted
dollar-based voting, meaning that the number of votes a shareholder is entitled
to is based upon the dollar value of his or her investment. The election of
Trustees is determined by the votes received from all Trust shareholders,
without regard to whether a majority of shareholders of any one series voted in
favor of a particular nominee or all nominees as a group. Each shareholder has
equal rights to dividends and distributions declared by the fund and to the net
assets of such fund upon its liquidation or dissolution proportionate to his or
her share ownership interest in the fund. Shares of each series have equal
voting rights, although each series votes separately on matters affecting that
series exclusively.

Shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable for its obligations. However, the
Declaration of Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust. The Declaration of Trust also provides for
indemnification and reimbursement of expenses of any shareholder held personally
liable for obligations of the Trust. The Declaration of Trust provides that the
Trust will, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. The Declaration of Trust further provides that the Trust may maintain
appropriate insurance (for example, fidelity, bonding, and errors and omissions
insurance) for the protection of the Trust, its shareholders, Trustees,
officers, employees, and agents to cover possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss because of shareholder
liability is limited to circumstances in which both inadequate insurance exists
and the Trust is unable to meet its obligations.

CUSTODIAN BANKS: Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn,
New York 11245 and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri
64106, serve as custodians of the funds' assets. Services provided by the
custodian banks include (a) settling portfolio purchases and sales, (b)
reporting failed trades, (c) identifying and collecting portfolio income, and
(d) providing safekeeping of securities. The custodians take no part in
determining the funds' investment policies or in determining which securities
are sold or purchased by the fund.

INDEPENDENT ACCOUNTANTS: PricewaterhouseCoopers LLP serves as the
independent accountants of the funds. The address of PricewaterhouseCoopers LLP
is City Center Square, 1100 Main Street, Suite 900, Kansas City, Missouri
64105-2140.

MULTIPLE CLASS STRUCTURE

The funds' Board of Trustees has adopted a multiple class plan (the
"Multiclass Plan") pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such
plan, the funds may issue up to three classes of funds: an Investor Class, an
Advisor Class and an Institutional Class. Not all funds offer all three classes.

The Investor Class is made available to investors directly by the investment
manager through its affiliated broker-dealer, American Century Investment
Services, Inc., for a single unified management fee, without any load or
commission. The Institutional and Advisor Classes are made available to
institutional shareholders or through financial intermediaries that do not
require the same level of shareholder and administrative services from the
manager as Investor Class shareholders. As a result, the manager is able to
charge these classes a lower unified management fee. In addition to the
management fee, however, the Advisor Class shares are subject to a Master
Distribution and Shareholder Services Plan (described below). The Plan has been
adopted by the funds' Board of Trustees and initial shareholder in accordance
with Rule 12b-1 adopted by the SEC under the Investment Company Act.

RULE 12B-1

Rule 12b-1 permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a plan adopted by the investment
company's Board of Trustees and approved by its shareholders. Pursuant to such
rule, the Board of Trustees and the initial shareholder of the funds' Advisor
Class have approved and entered into a Master Distribution and Shareholder
Services Plan, with respect to the Advisor Class (the "Plan") which is described
below.

In adopting the Plan, the Board of Trustees [including a majority who are
not "interested per-

STATEMENT OF ADDITIONAL INFORMATION 13

sons" of the funds (as defined in the Investment Company Act), hereafter
referred to as the "independent trustees"] determined that there was a
reasonable likelihood that the Plan would benefit the funds and the shareholders
of the affected class. Pursuant to Rule 12b-1, information with respect to
revenues and expenses under the Plan is presented to the Board of Trustees
quarterly for its consideration in connection with its deliberations as to the
continuance of the Plan. Continuance of the Plan must be approved annually by
the Board of Trustees (including a majority of the independent trustees). The
Plan may be amended by a vote of the Board of Trustees (including a majority of
the independent trustees), except that the Plan may not be amended to materially
increase the amount to be spent for distribution without majority approval of
the shareholders of the affected class. The Plan terminates automatically in the
event of an assignment and may be terminated upon a vote of a majority of the
independent trustees or by vote of a majority of the outstanding voting
securities of the affected class.

All fees paid under the Plan will be made in accordance with Section 26 of
the Rules of Fair Practice of the National Association of Securities Dealers
(NASD).

MASTER DISTRIBUTION AND SHAREHOLDER SERVICES PLAN

As described in the Prospectuses, the funds' Advisor Class of shares are
made available to participants in employer-sponsored retirement or savings plans
and to persons purchasing through financial intermediaries, such as banks,
broker-dealers and insurance companies. The Distributor enters into contracts
with various banks, broker-dealers, insurance companies and other financial
intermediaries with respect to the sale of the funds' shares and/or the use of
the funds' shares in various investment products or in connection with various
financial services.

Certain recordkeeping and administrative services that are provided by the
funds' transfer agent for the Investor Class shareholders may be performed by a
plan sponsor (or its agents) or by a financial intermediary for shareholders in
the Advisor Class. In addition to such services, the financial intermediaries
provide various distribution services.

To enable the funds' shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the funds'
investment manager has reduced its unified fee by 0.25% per annum with respect
to the Advisor Class shares and the funds' Board of Trustees has adopted a
Master Distribution and Shareholder Services Plan (the "Distribution Plan").
Pursuant to such Plan, the Advisor Class shares pay the Distributor a fee of
0.50% annually of the aggregate average daily assets of the funds' Advisor Class
shares, 0.25% of which is paid for Shareholder Services (as described above) and
0.25% of which is paid for distribution services.

Distribution services include any activity undertaken or expense incurred
that is primarily intended to result in the sale of Advisor Class shares, which
services may include but are not limited to, (a) the payment of sales
commissions, ongoing commissions and other payments to brokers, dealers,
financial institutions or others who sell Advisor Class shares pursuant to
Selling Agreements; (b) compensation to registered representatives or other
employees of Distributor who engage in or support distribution of the funds'
Advisor Class shares; (c) compensation to, and expenses (including overhead and
telephone expenses) of the Distributor; (d) the printing of prospectuses,
statements of additional information and reports for other than existing
shareholders; (e) the preparation, printing and distribution of sales literature
and advertising materials provided to the funds' shareholders and prospective
shareholders; (f) receiving and answering correspondence from prospective
shareholders, including distributing prospectuses, statements of additional
information and shareholder reports; (g) the providing of facilities to answer
questions from prospective investors about fund shares; (h) complying with
federal and state securities laws pertaining to the sale of fund shares; (i)
assisting investors in completing application forms and selecting dividend and
other account options; (j) the providing of other reasonable assistance in
connection with the distribution of fund shares; (k) the organizing and
conducting of sales seminars and payments in the form of transactional
compensation or promotional incentives; (l) profit on the foregoing; (m) the
payment of "service fees" for the provision of personal, continuing services

14 AMERICAN CENTURY INVESTMENTS

to investors, as contemplated by the Rules of Fair Practice of the NASD and (n)
such other distribution and services activities as the manager determines may be
paid for by the funds pursuant to the terms of this Agreement and in accordance
with Rule 12b-1 of the Investment Company Act.

TRUSTEES AND OFFICERS

The Trust's activities are overseen by a Board of Trustees, including six
independent Trustees. The individuals listed below whose names are marked by an
asterisk (*) are "interested persons" of the Trust (as defined in the Investment
Company Act) by virtue of, among other considerations, their affiliation with
either the Trust; the Trust's manager, American Century Investment Management,
Inc. (ACIM); the Trust's agent for transfer and administrative services,
American Century Services Corporation (ACS); their parent corporation, American
Century Companies, Inc. (ACC) or ACC's subsidiaries; other funds advised by the
manager; or the Trust's distributor and co-administrator, Funds Distributor,
Inc. (FDI). Each Trustee listed below serves as Trustee or Director of other
funds advised by the manager.

Unless otherwise noted, dates in parentheses indicate the dates the Trustee
or officer began his or her service in a particular capacity. Mr. Paul and the
Trustees' (with the exception of Mr. Lyons and Mr. Stowers) address is 1665
Charleston Road, Mountain View, California 94043. The address of Mr. Lyons, Mr.
Stowers III, Ms. Roepke, Mr. Zindel and Ms. Wade is American Century Tower, 4500
Main Street, Kansas City, Missouri 64111. The address of Mr. Ingram, Mr. Kelley
and Ms. Nelson is 60 State Street, Suite 1300, Boston, Massachusetts 02109.

TRUSTEES

ALBERT A. EISENSTAT, independent Trustee (1995). Mr. Eisenstat is currently
the general partner of Discovery Ventures (1996), a venture capital firm. He is
an independent Director of each of Commercial Metals Co. (1982), Sungard Data
Systems (1991) and Business Objects S/A (1994). Previously, he served as
Executive Vice President of Corporate Development and Corporate Secretary of
Apple Computer and served on its Board of Directors (1985 to 1993).

RONALD J. GILSON, independent Trustee (1995). Mr. Gilson is Charles J.
Meyers Professor of Law and Business at Stanford Law School (1979) and Mark and
Eva Stern Professor of Law and Business at Columbia University School of Law
(1992). Previously he served as counsel to Marron, Reid & Sheehy (a San
Francisco law firm, 1984).

*WILLIAM M. LYONS, Trustee (1998). Mr. Lyons is President and Chief
Operating Officer of ACC; Executive Vice President of ACS and ACIS; Assistant
Secretary of ACC; and Secretary of ACS and ACIS.

MYRON S. SCHOLES, independent Trustee (1985). Mr. Scholes was awarded the
1997 Nobel Memorial Prize in Economic Sciences for his role in the development
of the Black-Scholes option pricing model. Mr. Scholes is a principal of
Long-Term Capital Management (1993). He is also Frank E. Buck Professor of
Finance at the Stanford Graduate School of Business (1983) and a Director of
Dimensional Fund Advisors (1982) and the Smith Breeden Family of Funds (1992).
From August 1991 to June 1993, Mr. Scholes was a Managing Director of Salomon
Brothers Inc. (securities brokerage).

KENNETH E. SCOTT, independent Trustee (1985). Mr. Scott is Ralph M. Parsons
Professor of Law and Business at Stanford Law School (1972) and a Director of
RCM Capital Funds, Inc. (1994).

ISAAC STEIN, independent Trustee (1992). Mr. Stein is former Chairman of the
Board (1990 to 1992) and Chief Executive Officer (1991 to 1992) of Esprit de
Corp. (clothing manufacturer). He is a member of the Board of Raychem
Corporation (electrical equipment, 1993), President of Waverley Associates, Inc.
(private investment firm, 1983), and a Director of ALZA Corporation
(pharmaceuticals, 1987). He is also a Trustee of Stanford University (1994) and
Chairman of Stanford Health Services (hospital, 1994).

*JAMES E. STOWERS III, Chairman of the Board of Trustees (1998) and Trustee
(1995). Mr. Stowers III is Chief Executive Officer and Director of ACC, ACS and
ACIS.

JEANNE D. WOHLERS, independent Trustee (1985). Ms. Wohlers is a private
investor and an independent Director and Partner of Windy Hill Productions, LP.
Previously, she served as Vice President and Chief Financial Officer of Sybase,
Inc. (software company, 1988 to 1992).

STATEMENT OF ADDITIONAL INFORMATION 15

OFFICERS

*GEORGE A. RIO, President (1998). Mr. Rio is Executive Vice President and
Client Service Director of Funds Distributor, Inc. (FDI). Prior to joining FDI,
Mr. Rio served as Senior Vice President and Senior Key Account Manager for
Putnam Mutual Funds (June 1995 to March 1998). Before that he served as Director
of Business Development for First Data Corporation (May 1994 to June 1995) and
Senior Vice President and Manager of Client Services and Director of Internal
Audit at The Boston Company Inc. (September 1983 to May 1994).

*DOUGLAS A. PAUL, Secretary (1988) Vice President (1990), and General
Counsel (1990). Mr. Paul is Vice President and Associate General Counsel of ACS.

*MARYANNE ROEPKE, CPA, Treasurer (1995) and Senior Vice President (1998).
Ms. Roepke is Vice President and Assistant Treasurer of ACS.

*CHRISTOPHER J. KELLEY, Vice President (1998). Mr. Kelley is Vice President
and Associate General Counsel of FDI. Mr. Kelley joined FDI in 1996. Prior to
joining FDI, Mr. Kelley served as Assistant Counsel at Forum Financial Group
(from April 1994 to July 1996) and before that as a compliance officer for
Putnam Investments (from 1992 to 1994).

*MARY A. NELSON, Vice President (1998). Ms. Nelson is Vice President and
Manager of Treasury Services and Administration of FDI. Ms. Nelson joined FDI in
1995. Prior to joining FDI, Ms. Nelson served as Assistant Vice President and
Client Manager for The Boston Company, Inc. (from 1989 to 1994).

*PATRICK A. LOOBY, Vice President and Assistant Secretary (1998). Mr. Looby
is Vice President and Associate General Counsel of ACS.

*JON ZINDEL, Tax Officer (1997). Mr. Zindel is Vice President and Director
of Taxation of ACS. Mr. Zindel joined ACS in 1996. Prior to joining ACS, he was
Tax Manager, Price Waterhouse LLP (1989).

*C. JEAN WADE, Controller (1996). Ms. Wade joined ACS in 1991.

As of July 2, 1998, the Trust's officers and Trustees, as a group, owned
less than 1% of the outstanding shares of each fund.

The following table summarizes the compensation that the Trustees of the
funds received for the funds' fiscal year ended March 31, 1998.

TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED MARCH 31, 1998

Total Compensation
Aggregate From The
Name of Compensation American Century
Trustee1 From The Trust2 Family of Funds3
- ---------------------------------------------------------------------------
Albert Eisenstat $18,035 $61,750
Ronald J. Gilson $20,029 $66,750
Myron S. Scholes $16,972 $59,000
Kenneth E. Scott $19,565 $65,500
Isaac Stein $17,442 $60,500
Jeanne D. Wohlers $18,940 $64,250
- ---------------------------------------------------------------------------

1 Interested Trustees receive no compensation for their services as such.

2 Total amount of deferred compensation included in the preceding table is as
follows: Mr. Eisenstat, $23,750; Mr. Gilson, $26,500; Mr. Scholes, $21,750;
and Mr. Scott, $13,875.

3 Includes compensation paid by the 13 investment company members of the
American Century family of funds.

MANAGEMENT

Each fund has an investment management agreement with the manager dated
August 1, 1997. This agreement was approved by the shareholders of the funds on
July 30, 1997.

16 AMERICAN CENTURY INVESTMENTS

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

Money Market Funds

Category Assets Fee Rate
- --------------------------------------------------------------------------------
First $1 billion 0.2500%
Next $1 billion 0.2070%
Next $3 billion 0.1660%
Next $5 billion 0.1490%
Next $15 billion 0.1380%
Next $25 billion 0.1375%
Thereafter 0.1370%
- --------------------------------------------------------------------------------

Variable-Price Funds (except GNMA and Short-Term Government)

Category Assets Fee Rate
- --------------------------------------------------------------------------------
First $1 billion 0.2800%
Next $1 billion 0.2280%
Next $3 billion 0.1980%
Next $5 billion 0.1780%
Next $15 billion 0.1650%
Next $25 billion 0.1630%
Thereafter 0.1625%
- --------------------------------------------------------------------------------

GNMA and Short-Term Government

Category Assets Fee Rate
- --------------------------------------------------------------------------------
First $1 billion 0.3600%
Next $1 billion 0.3080%
Next $3 billion 0.2780%
Next $5 billion 0.2580%
Next $15 billion 0.2450%
Next $25 billion 0.2430%
Thereafter 0.2425%
- --------------------------------------------------------------------------------

The Complex Fee Schedule (Investor Class) is as follows:

Complex Assets Fee Rate
- --------------------------------------------------------------------------------
First $2.5 billion 0.3100%
Next $7.5 billion 0.3000%
Next $15.0 billion 0.2985%
Next $25.0 billion 0.2970%
Next $50.0 billion 0.2960%
Next $100.0 billion 0.2950%
Next $100.0 billion 0.2940%
Next $200.0 billion 0.2930%
Next $250.0 billion 0.2920%
Next $500.0 billion 0.2910%
Thereafter 0.2900%
- --------------------------------------------------------------------------------

The Complex Fee schedule for the Institutional Class is lower by 0.2000% at
each graduated step. For example, if the Investor Class Complex Fee is 0.3000%
for the first $2 billion, the Institutional Class Complex Fee is 0.1000%
(0.3000% minus 0.2000%) for the first $2 billion. The Complex Fee schedule for
the Advisor Class is lower by 0.2500% at each graduated step.

The management agreement shall continue in effect until the earlier of the
expiration of two years from the date of its execution or until the first
meeting of shareholders following such execution and for as long thereafter as
its continuance is specifically approved at least annually by (1) the funds'
Board of Trustees, or by the vote of a majority of outstanding votes (as defined
in the Investment Company Act) and (2) by the vote of a majority of the Trustees
of the funds who are not parties to the agreement or interested persons of the
manager, cast in person at a meeting called for the purpose of voting on such
approval.

The management agreement provides that it may be terminated at any time
without payment of any penalty by the funds' Board of Trustees, or by a vote of
a majority of the funds' shareholders, on 60 days' written notice to the
manager, and that it shall be automatically terminated if it is assigned.

The management agreement provides that the manager shall not be liable to
the funds or its shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.

The management agreement also provides that the manager and its officers,
Trustees and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.

STATEMENT OF ADDITIONAL INFORMATION 17

Certain investments may be appropriate for the funds and also for other
clients advised by the manager. Investment decisions for the funds and other
clients are made with a view to achieving their respective investment objectives
after consideration of such factors as their current holdings, availability of
cash for investment, and the size of their investment generally. A particular
security may be bought or sold for only one client or series, or in different
amounts and at different times for more than one but less than all clients or
series. In addition, purchases or sales of the same security may be made for two
or more clients or series on the same date. Such transactions will be allocated
among clients in a manner believed by the manager to be equitable to each. In
some cases this procedure could have an adverse effect on the price or amount of
the securities purchased or sold by the fund.

The manager may aggregate purchase and sale orders of the funds with
purchase and sale orders of its other clients when the manager believes that
such aggregation provides the best execution for the funds. The funds' Board of
Trustees has approved the policy of the manager with respect to the aggregation
of portfolio transactions. Where portfolio transactions have been aggregated,
the funds participate at the average share price for all transactions in that
security on a given day and share transaction costs on a pro rata basis. The
manager will not aggregate portfolio transactions of the funds unless it
believes such aggregation is consistent with its duty to seek best execution on
behalf of the funds and the terms of the management agreement. The manager
receives no additional compensation or remuneration as a result of such
aggregation.

In addition to managing the funds, the manager was also acting as an
investment adviser to 12 institutional accounts and to the following registered
investment companies: American Century Mutual Funds, Inc., American Century
World Mutual Funds, Inc., American Century Premium Reserves, Inc., American
Century Variable Portfolios, Inc., American Century Capital Portfolios, Inc.,
American Century Strategic Asset Allocations, Inc., American Century Municipal
Trust, American Century Investment Trust, American Century Target Maturities
Trust, American Century California Tax-Free and Municipal Funds, American
Century Quantitative Equity Funds and American Century International Bond Funds.

Prior to August 1, 1997, Benham Management Corporation served as the
investment advisor to the funds. Benham Management Corporation was, like the
manager, wholly owned by ACC. In late 1997, Benham Management Corporation was
merged into the manager.

Investment management fees paid by each fund to the manager for the fiscal
years ended March 31, 1998, 1997, and 1996 (or its affiliate, Benham Management
Corporation), are indicated in the following table. Fee amounts, paid under a
prior agreement with Benham Management Corporation, are net of reimbursements.

Investment Advisory Fees(1)
- --------------------------------------------------------------------------------
Fiscal Fiscal Fiscal
Fund 1998(2) 1997 1996
- --------------------------------------------------------------------------------
Capital Preservation $11,994,029 $8,107,075 $8,039,420
Government Agency 1,929,073 1,441,378 1,104,214
Short-Term Treasury 153,812 77,935 118,721
Intermediate-Term
Treasury 1,520,464 881,647 867,876
Long-Term Treasury 522,531 339,340 174,665
Short-Term
Government(3) 1,623,040 2,460,469 2,570,178
GNMA Fund 5,898,043 3,115,478 2,980,327
Inflation-Adjusted
Treasury 0 0 N/A
- --------------------------------------------------------------------------------

(1) Net of Reimbursements.

(2) The fees for the period April 1, 1997 to July 31, 1997, which were paid
under the Investment Advisory Agreement with Benham Management Corporation,
include Administrative and Transfer Agent Fees.

(3) Short-Term Government's fiscal year end was changed from October 31 to March
31 resulting in a five month annual reporting period.

TRANSFER AND ADMINISTRATIVE SERVICES

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

18 AMERICAN CENTURY INVESTMENTS

Prior to August 1, 1997, the funds paid American Century Services
Corporation directly for its services as transfer agent and administrative
services agent.

Administrative service and transfer agent fees paid by each fund under the
Investment Advisory Agreement with Benham Management Corporation for the fiscal
years ended March 31, 1998, 1997, and 1996 are indicated in the following
tables. Fee amounts are net of reimbursements.

Administrative Fees*
- --------------------------------------------------------------------------------
Fiscal Fiscal Fiscal
Fund 1998 1997 1996
- --------------------------------------------------------------------------------
Capital Preservation $1,146,326 $2,871,948 $2,896,754
Government Agency 144,980 459,802 475,745
Short-Term Treasury 11,573 33,371 39,657
Intermediate-Term
Treasury 101,989 300,336 301,079
Long-Term Treasury 41,622 112,936 69,302
GNMA Fund 359,302 1,059,314 1,149,339
Inflation-Adjusted
Treasury 0 0 N/A
- --------------------------------------------------------------------------------

*Net of Reimbursements

Transfer Agent Fees*
- --------------------------------------------------------------------------------
Fiscal Fiscal Fiscal
Fund 1998 1997 1996
- --------------------------------------------------------------------------------
Capital Preservation $933,109 $2,449,205 $2,536,792
Government Agency 163,368 553,760 591,421
Short-Term Treasury 11,510 34,555 44,415
Intermediate-Term
Treasury 77,150 258,334 283,949
Long-Term Treasury 66,019 181,017 120,818
GNMA Fund 381,757 1,150,565 1,033,782
Inflation-Adjusted
Treasury 646 0 N/A
- --------------------------------------------------------------------------------

*Net of Reimbursements

DISTRIBUTION OF FUND SHARES

The funds' shares are distributed by FDI (the "Distributor"), a registered
broker-dealer. The manager pays all expenses for promoting and distributing the
funds' shares. The funds do not pay any commissions or other fees to the
Distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The funds' shares are continuously offered at net asset value. Share
certificates are issued (without charge) only when requested in writing.
Certificates are not issued for fractional shares. Dividend and voting rights
are not affected by the issuance of certificates.

American Century may reject or limit the amount of an investment to prevent
any one shareholder or affiliated group from controlling the Trust or one of its
series; to avoid jeopardizing a fund's tax status; or whenever, in the manager's
opinion, such rejection is in the Trust's or a fund's best interest.

As of July 2, 1998, to the knowledge of the Trust, the shareholders listed
in the following chart were the only record holders of greater than 5% of the
outstanding shares of the individual funds.

FUND SHORT-TERM TREASURY
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104

# of Shares Held 659,546

% of Total Shares
Outstanding 14.0%
- --------------------------------------------------------------------------------
Shareholder Name and J. Harris Morgan
Address P.O. Box 556
Greenville, TX 75403

# of Shares Held 314,616

% of Total Shares
Outstanding 6.7%
- --------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION 19

FUND INTERMEDIATE-TERM TREASURY
- --------------------------------------------------------------------------------
Shareholder Name and Chase Manhattan Bank NA
Address 770 Broadway 10th FL
New York, NY 10003

# of Shares Held 2,604,612

% of Total Shares
Outstanding 7.1%
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104

# of Shares Held 5,633,115

% of Total Shares
Outstanding 15.3%
- --------------------------------------------------------------------------------

FUND LONG-TERM TREASURY
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104

# of Shares Held 4,017,850

% of Total Shares
Outstanding 40.5%
- --------------------------------------------------------------------------------

FUND SHORT-TERM GOVERNMENT
- --------------------------------------------------------------------------------
Shareholder Name and Stowers Institute for
Address Medical Research
4949 Rockhill Road
Kansas City, MO 64110

# of Shares Held 32,045,811

% of Total Shares
Outstanding 37.1%
- --------------------------------------------------------------------------------

FUND GNMA FUND
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104

# of Shares Held 30,277,165

% of Total Shares
Outstanding 24.6%
- --------------------------------------------------------------------------------

FUND INFLATION-ADJUSTED TREASURY
- --------------------------------------------------------------------------------
Shareholder Name and American Century
Address Investment Management
4500 Main Street
Kansas City, MO 64111

# of Shares Held 106,658

% of Total Shares
Outstanding 17.6%
- --------------------------------------------------------------------------------
Shareholder Name and Charles Schwab & Co.
Address 101 Montgomery Street
San Francisco, CA 94104

# of Shares Held 66,680

% of Total Shares
Outstanding 11.0%
- --------------------------------------------------------------------------------

ACS charges neither fees nor commissions on the purchase and sale of fund
shares. However, ACS may charge fees for special services requested by a
shareholder or necessitated by acts or omissions of a shareholder. For example,
ACS may charge a fee for processing dishonored investment checks or stop-payment
requests. See the Investor Services Guide for more information.

OTHER INFORMATION

For further information, please refer to registration statement and exhibits
on file with the SEC in Washington, D.C. These documents are available upon
payment of a reproduction fee. Statements in the Prospectus and in this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.

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

20 AMERICAN CENTURY INVESTMENTS

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

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

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

WWW.AMERICANCENTURY.COM

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

9808 [recycled logo]
SH-BKT-12807 Recycled
<PAGE>
AMERICAN CENTURY GOVERNMENT INCOME TRUST

1933 Act Post-Effective Amendment No. 36
1940 Act Amendment No. 37
- --------------------------------------------------------------------------------

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) FINANCIAL STATEMENTS. Audited financial statements for each series of
the American Century Government Income Trust, for the fiscal year ended
March 31, 1998, are filed herein as included in the Trust's Statement
of Additional Information by reference to the Annual Reports dated
March 31, 1998, filed on May 26, 1998 (Accession #773674-98-000004).

(b) EXHIBITS.

(1) (a) Agreement and Declaration of Trust dated May 31, 1995, is
incorporated herein by reference to Exhibit 1 of
Post-Effective Amendment No. 28 filed on May 29, 1996
(Accession # 0000773674-96-000004).

(b) Amendment to the Declaration of Trust dated October 21,
1996 is incorporated herein by reference to Exhibit 1 of
Post-Effective Amendment No. 31 filed on February 7, 1997
(Accession # 0000773674-97-000002).

(c) Amendment to the Declaration of Trust dated January 20,
1997 with respect to the American Century - Benham Inflation-
Adjusted Treasury Fund is incorporated herein by reference to
Exhibit 1 of Post-Effective Amendment No. 31 filed on February
7, 1997 (Accession # 0000773674-97-000002).

(d) Amendment to the Declaration of Trust dated August 1,
1997, is incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 34 to the Registration Statement,
filed August 29, 1997 (Accession # 0000773674-97-000019).

(2) Amended and Restated Bylaws, dated May 17, 1995, are
incorporated herein by reference to Exhibit 2 of
Post-Effective Amendment No. 28 filed on May 29, 1996
(Accession # 0000773674-96-000004).

(3) Not applicable.

(4) (a) Specimen copy of American Century - Benham GNMA Fund share
certificate is incorporated herein by reference to Exhibit 4
to the registration statement filed on July 26, 1985.

(b) Specimen copy of American Century - Benham Short-Term
Government Fund share certificate is incorporated herein by
reference to Exhibit 4 to Post-Effective Amendment No. 17
filed on September 30, 1991.

(c) Specimen copy of American Century - Benham
Intermediate-Term Treasury Fund share certificate is
incorporated herein by reference to Exhibit 4 to
Post-Effective Amendment No. 18 filed on November 27, 1991.

(d) Specimen copy of American Century - Benham Government
Agency Money Market Fund share certificate is incorporated
herein by reference to Exhibit 4 to Post-Effective Amendment
No. 18 filed on November 27, 1991.

(e) Specimen copy of American Century - Benham Short-Term
Treasury Fund share certificate is incorporated herein by
reference to Exhibit 4(e) to Post-Effective Amendment No. 24
filed on November 29, 1992.

(f) Specimen copy of American Century - Benham Long-Term
Treasury Fund share certificate is incorporated herein by
reference to Exhibit 4(f) to Post-Effective Amendment No. 24
filed on November 29, 1992.

(g) Specimen copy of American Century - Benham
Inflation-Adjusted Treasury Fund share certificate is
incorporated herein by reference to Exhibit 4 of
Post-Effective Amendment No. 31 filed on February 7, 1997
(Accession # 0000773674-97-000002).

(5) (a) Investor Class Management Agreement between American
Century Government Income Trust and American Century
Investment Management, Inc. dated August 1, 1997, is
incorporated herein by reference to Exhibit 5 of
Post-Effective Amendment No. 33 to the Registration Statement,
filed July 31, 1997 (Accession #773674-97-000014).

(b) Advisor Class Investment Management Agreement between
American Century Government Income Trust and American Century
Investment Management, Inc., dated August 1, 1997, is
incorporated herein by reference to Exhibit 5(b) of
Post-Effective Amendment No. 27 to the Registration Statement
for American Century Target Maturities Trust, filed August 29,
1997.

(6) Distribution Agreement between American Century Government
Income Trust and Funds Distributor, Inc., dated January 15,
1998, is incorporated herein by reference to Exhibit 6 of
Post-Effective Amendment No. 28 to the Registration Statement
of American Century Target Maturities Trust, filed January 30,
1998 (Accession #757928-98-000002).

(7) Not applicable.

(8) Custodian Agreement between American Century Government Income
Trust and The Chase Manhattan Bank, dated August 9, 1996, is
incorporated herein by reference to Exhibit 8 of
Post-Effective Amendment No. 31 filed on February 7, 1997
(Accession # 0000773674-97-000002).

(9) Transfer Agency Agreement between American Century Government
Income Trust and American Century Services Corporation, dated
August 1, 1997, is incorporated herein by reference to Exhibit
9 of Post-Effective Amendment #33, filed on July 31, 1997
(Accession #773674-97-000014).

(10) Opinion and consent of counsel as to the legality of the
securities being registered, dated June 11, 1998 is
incorporated herein by reference to Rule 24f-2 Notice filed on
June 11, 1998 (Accession # 773674-98-000007).

(11) Consent of Coopers & Lybrand LLP, independent accountants, is
included herein.

(12) Not applicable.

(13) Not applicable.

(14) (a) American Century Individual Retirement Account Plan,
including all instructions and other relevant documents, dated
February 1992, is incorporated herein by reference to Exhibit
14(a) to Post-Effective Amendment No. 23 filed on September
28, 1992.

(b) American Century Pension/Profit Sharing plan, including
all instructions and other relevant documents, dated February
1992, is incorporated herein by reference to Exhibit 14(b) to
Post-Effective Amendment No. 23 filed on September 28, 1992.

(15) Master Distribution and Shareholder Services Plan of American
Century Government Income Trust, American Century
International Bond Fund, American Century Target Maturities
Trust and American Century Quantitative Equity Funds (Advisor
Class) dated August 1, 1997, is incorporated herein by
reference to Exhibit 15 of Post-Effective Amendment No. 27 to
the Registration Statement for American Century Target
Maturities Trust, filed August 29, 1997 (Accession
#757928-97-000004).

(16) Schedule for computation of each performance quotation
provided in response to Item 22 is included herein.

(17) Power of Attorney dated January 15, 1998, is incorporated by
reference to Exhibit 17 of Post-Effective Amendment No. 35 to
the Registration Statement, filed February 27, 1998 (Accession
#773674-98-000002).

(18) Multiple Class Plan of American Century California Tax-Free
and Municipal Funds, American Century Government Income Trust,
American Century International Bond Funds, American Century
Investment Trust, American Century Municipal Trust, American
Century Target Maturities Trust and American Century
Quantitative Equity Funds dated August 1, 1997, is
incorporated herein by reference to Exhibit 15 of
Post-Effective Amendment No. 27 to the Registration Statement
for American Century Target Maturities Trust, filed August 29,
1997 (Accession #757928-97-000004).

Item 25. Persons Controlled by or Under Common Control with Registrant.

Not applicable.

Item 26. Number of Holders of Securities.

As of July 6, 1998, each series of American Century Government Income Trust had
the following number shareholders of record:

Investor Advisor
Class Class
----- -----
American Century - Benham Capital Preservation Fund 73,430 n/a
American Century - Benham Government Agency Money Market Fund 14,430 n/a
American Century - Benham Short-Term Treasury Fund 1,228 2
American Century - Benham Intermediate-Term Treasury Fund 9,424 3
American Century - Benham Long-Term Treasury Fund 2,564 2
American Century - Benham Short-Term Government Fund 25,523 n/a
American Century - Benham GNMA Fund 34,263 6
American Century - Benham Inflation-Adjusted Treasury Fund 318 n/a

Item 27. Indemnification.

As stated in Article VII, Section 3 of the Declaration of Trust, incorporated
herein by reference to Exhibit 1 to the Registration Statement, "The Trustees
shall be entitled and empowered to the fullest extent permitted by law to
purchase insurance for and to provide by resolution or in the Bylaws for
indemnification out of Trust assets for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit, or proceeding in which he or she
becomes involved by virtue of his or her capacity or former capacity with the
Trust. The provisions, including any exceptions and limitations concerning
indemnification, may be set forth in detail in the Bylaws or in a resolution
adopted by the Board of Trustees."

Registrant hereby incorporates by reference, as though set forth fully herein,
Article VI of the Registrant's Bylaws, amended on May 17, 1995, appearing as
Exhibit 2 to Post-Effective Amendment No. 28 filed on May 29, 1996 (Accession #
0000773674-96-000004).

Item 28. Business and Other Connections of Investment Advisor.

American Century Investment Management, Inc., the investment manager to each of
the Registrant's Funds, is engaged in the business of managing investments for
deferred compensation plans and other institutional investors.

Item 29. Principal Underwriters.

The registrant's distribution agent, Funds Distributor, Inc., is distribution
agent to American Century California California Tax-Free and Municipal Funds,
American Century Government Income Trust, American Century Municipal Trust,
American Century Target Maturities Trust, American Century Quantitative Equity
Funds, American Century International Bond Funds, American Century Investment
Trust, American Century Variable Portfolios, Inc., American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American Century Premium
Reserves, Inc., American Century Strategic Asset Allocations, Inc., and American
Century World Mutual Funds, Inc. The information required by this Item 29(b)
with respect to each director, officer and partner of FDI is incorporated herein
by reference to Schedule A of Form BD filed by FDI with the Securities and
Exchange Commission pursuant to the Securities Act of 1934 (SEC File No.
8-20518).

Item 30. Location of Accounts and Records.

American Century Investment Management, Inc., the Registrant and its agent for
transfer and administrative services, American Century Services Corporation,
maintain their principal office at 4500 Main St., Kansas City, MO 64111.
American Century Services Corporation maintains physical possession of each
account, book, or other document, and shareholder records as required by
ss.31(a) of the 1940 Act and rules thereunder. The computer and data base for
shareholder records are located at Central Computer Facility, 401 North Broad
Street, Sixth Floor, Philadelphia, PA 19108.

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

(a) Registrant undertakes to furnish each person to whom a Prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

(b) Registrant hereby undertakes to call a meeting of shareholders of the Trust
upon written request of shareholders owning at least one-tenth of the
outstanding shares.

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Post-Effective Amendment No. 36 to its Registration
Statement pursuant to Rule 485(b) promulgated under the Securities Act of 1933,
as amended, and has duly caused this Post-Effective Amendment No. 36 to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mountain View, State of California on the 27th
day of July, 1998.

AMERICAN CENTURY GOVERNMENT INCOME TRUST

By: /s/ Douglas A. Paul
Douglas A. Paul
Secretary, Vice President and General Counsel

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 35/Amendment No. 36 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Date
<S> <C> <C>
* Trustee July 27, 1998
- ---------------------------------
Albert A. Eisenstat

* Trustee July 27, 1998
- ---------------------------------
Ronald J. Gilson

* Trustee July 27, 1998
- ---------------------------------
William M. Lyons

* Trustee July 27, 1998
- ---------------------------------
Myron S. Scholes

* Trustee July 27, 1998
- ---------------------------------
Kenneth E. Scott

* Trustee July 27, 1998
- ---------------------------------
Isaac Stein

* Trustee, Chairman of the Board July 27, 1998
- ---------------------------------
James E. Stowers III

* Trustee July 27, 1998
- ---------------------------------
Jeanne D. Wohlers

* Treasurer July 27, 1998
- ---------------------------------
Maryanne Roepke
</TABLE>

/s/ Douglas A. Paul
*by Douglas A. Paul, Attorney in Fact (pursuant to a Power of Attorney dated
January 15, 1998).

EXHIBIT DESCRIPTION

EX-99.B1 a) Agreement and Declaration of Trust dated May 31, 1995, is
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 28 filed on May 29, 1996 (Accession #
0000773674-96-000004).

b) Amendment to the Declaration of Trust dated October 21, 1996 is
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 31 filed on February 7, 1997 (Accession #
0000773674-97-000002).

c) Amendment to the Declaration of Trust dated January 20, 1997 with
respect to the American Century - Benham Inflation-Adjusted Treasury
Fund is incorporated herein by reference to Exhibit 1 of
Post-Effective Amendment No. 31 filed on February 7, 1997 (Accession
# 0000773674-97-000002).

d) Amendment to the Declaration of Trust dated August 1, 1997, is
incorporated by reference to Exhibit 1 to Post-Effective Amendment
No. 34 to the Registration Statement, filed August 29, 1997
(Accession # 0000773674-97-000019).

EX-99.B2 Amended and Restated Bylaws, dated May 17, 1995, are incorporated
herein by reference to Exhibit 2 of Post-Effective Amendment No. 28
filed on May 29, 1996 (Accession # 0000773674-96-000004).

EX-99.B4 a) Specimen copy of American Century - Benham GNMA Fund share
certificate is incorporated herein by reference to Exhibit 4 to the
registration statement filed on July 26, 1985.

b) Specimen copy of American Century - Benham Short-Term Government
Fund share certificate is incorporated herein by reference to
Exhibit 4 to Post-Effective Amendment No. 17 filed on September 30,
1991.

c) Specimen copy of American Century - Benham Intermediate-Term
Treasury Fund share certificate is incorporated herein by reference
to Exhibit 4 to Post-Effective Amendment No. 18 filed on November
27, 1991.

d) Specimen copy of American Century - Benham Government Agency
Money Market Fund share certificate is incorporated herein by
reference to Exhibit 4 to Post-Effective Amendment No. 18 filed on
November 27, 1991.

e) Specimen copy of American Century - Benham Short-Term Treasury
Fund share certificate is incorporated herein by reference to
Exhibit 4(e) to Post-Effective Amendment No. 24 filed on November
29, 1992.

f) Specimen copy of American Century - Benham Long-Term Treasury
Fund share certificate is incorporated herein by reference to
Exhibit 4(f) to Post-Effective Amendment No. 24 filed on November
29, 1992.

g) Specimen copy of American Century - Benham Inflation-Adjusted
Treasury Fund share certificate is incorporated herein by reference
to Exhibit 4 of Post-Effective Amendment No. 31 filed on February 7,
1997 (Accession # 0000773674-97-000002).

EX-99.B5 a) Investor Class Management Agreement between American Century
Government Income Trust and American Century Investment Management,
Inc. dated August 1, 1997, is incorporated herein by reference to
Exhibit 5 of Post-Effective Amendment No. 33 to the Registration
Statement, filed July 31, 1997 (Accession #773674-97-000014).

b) Advisor Class Investment Management Agreement between American
Century Government Income Trust and American Century Investment
Management, Inc., dated August 1, 1997, is incorporated herein by
reference to Exhibit 5(b) of Post-Effective Amendment No. 27 to the
Registration Statement for American Century Target Maturities Trust,
filed August 29, 1997.

EX-99.B6 Distribution Agreement between American Century Government Income
Trust and Funds Distributor, Inc., dated January 15, 1998, is
incorporated herein by reference to Exhibit 6 of Post-Effective
Amendment No. 28 to the Registration Statement of American Century
Target Maturities Trust, filed January 30, 1998 (Accession
#757928-98-000002).

EX-99.B8 Custodian Agreement between American Century Government Income Trust
and The Chase Manhattan Bank, dated August 9, 1996, is incorporated
herein by reference to Exhibit 8 of Post-Effective Amendment No. 31
filed on February 7, 1997 (Accession # 0000773674-97-000002).

EX-99.B9 Transfer Agency Agreement between American Century Government Income
Trust and American Century Services Corporation, dated August 1,
1997, is incorporated herein by reference to Exhibit 9 of
Post-Effective Amendment #33, filed on July 31, 1997 (Accession
#773674-97-000014).

EX-99.B10 Opinion and consent of counsel as to the legality of the securities
being registered, dated June 11, 1998 is incorporated herein by
reference to Rule 24f-2 Notice filed on June 11, 1998 (Accession #
773674-98-000007).

EX-99.B11 Consent of Coopers & Lybrand LLP, independent accountants, is
included herein.

EX-99.B14 a) American Century Individual Retirement Account Plan, including
all instructions and other relevant documents, dated February 1992,
is incorporated herein by reference to Exhibit 14(a) to
Post-Effective Amendment No. 23 filed on September 28, 1992.

b) American Century Pension/Profit Sharing plan, including all
instructions and other relevant documents, dated February 1992, is
incorporated herein by reference to Exhibit 14(b) to Post-Effective
Amendment No. 23 filed on September 28, 1992.

EX-99.B15 Master Distribution and Shareholder Services Plan of American
Century Government Income Trust, American Century International Bond
Fund, American Century Target Maturities Trust and American Century
Quantitative Equity Funds (Advisor Class) dated August 1, 1997, is
incorporated herein by reference to Exhibit 15 of Post-Effective
Amendment No. 27 to the Registration Statement for American Century
Target Maturities Trust, filed August 29, 1997 (Accession
#757928-97-000004).

EX-99.B16 Schedule for computation of each performance quotation provided in
response to Item 22 is included herein.

EX-99.B17 Power of Attorney dated January 15, 1998, is incorporated by
reference to Exhibit 17 of Post-Effective Amendment No. 35 to the
Registration Statement, filed February 27, 1998 (Accession
#773674-98-000002).

EX-99.B18 Multiple Class Plan of American Century California Tax-Free and
Municipal Funds, American Century Government Income Trust, American
Century International Bond Funds, American Century Investment Trust,
American Century Municipal Trust, American Century Target Maturities
Trust and American Century Quantitative Equity Funds dated August 1,
1997, is incorporated herein by reference to Exhibit 15 of
Post-Effective Amendment No. 27 to the Registration Statement for
American Century Target Maturities Trust, filed August 29, 1997
(Accession #757928-97-000004).

EX-27.5.1 FDS for American Century - Benham GNMA Fund.

EX-27.5.2 FDS for American Century - Benham Intermediate-Term Treasury Fund.

EX-27.4.3 FDS for American Century - Benham Government Agency Money Market
Fund.

EX-27.5.4 FDS for American Century - Benham Short-Term Government Fund.

EX-27.5.5 FDS for American Century - Benham Short-Term Treasury Fund.

EX-27.5.6 FDS for American Century - Benham Long-Term Treasury Fund.

EX-27.5.7 FDS for American Century - Benham Inflation-Adjusted Treasury Fund.

EX-27.4.8 FDS for American Century - Benham Capital Preservation Fund.

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in Post-Effective Amendment No. 36
to the Registration Statement of the American Century-Benham Capital
Preservation Fund, American Century-Benham Government Agency Money Market Fund,
American Century-Benham GNMA Fund, American Century-Benham Short-Term Treasury
Fund, American Century-Benham Intermediate-Term Treasury Fund, American
Century-Benham Long-Term Treasury Fund, American Century-Benham
Inflation-Adjusted Treasury Fund, and American Century-Benham Short-Term
Government Fund (the eight funds comprising the American Century Government
Income Trust) on Form N-1A of our reports dated May 8, 1998 on our audits of the
financial statements and financial highlights of the American Century-Benham
Capital Preservation Fund, American Century-Benham Government Agency Money
Market Fund, American Century-Benham GNMA Fund, American Century-Benham
Short-Term Treasury Fund, American Century-Benham Intermediate-Term Treasury
Fund, American Century-Benham Long-Term Treasury Fund, American Century-Benham
Inflation-Adjusted Treasury Fund, and American Century-Benham Short-Term
Government Fund, which reports are included in the Annual Report to Shareholders
for the year ended March 31, 1998 which are incorporated by reference in
Post-Effective Amendment No. 36 to the Registration Statement. We also consent
to the reference in the Statement of Additional Information to our Firm under
the caption "Independent Accountants."

/s/Coopers & Lybrand LLP
Coopers & Lybrand LLP

Kansas City, Missouri
July 27, 1998

BENHAM CAPITAL PRESERVATION
YIELD CALCULATION
3/31/98

Effective Yield: [(Base Period Return)+1)^365/7]-1

Base Period Return = 0.00094791

7 Day Effective Yield = 5.06%

Yield: = I/B X 365/7

Y = Yield
I = total income of hypothetical account
over the seven day period
B = beginning account value

I = 0.00094791
B = $1.00

7 Day Yield = 4.94%
<PAGE>
BENHAM GOVT AGENCY MM
YIELD CALCULATION
3/31/98

Effective Yield: [(Base Period Return)+1)^365/7]-1

Base Period Return = 0.00096902

7 Day Effective Yield = 5.18%

Yield: = I/B X 365/7

Y = Yield
I = total income of hypothetical account
over the seven day period
B = beginning account value

I = 0.00096902
B = $1.00

7 Day Yield = 5.05%
<PAGE>
BENHAM INTERMEDIATE TERM TREASURY FUND
YIELD CALCULATION
3/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = Investment income earned during the period
B = Expenses accrued for the period (net of reimbursements)
C = The average daily number of shares outstanding during
the period that were entitled to receive dividends
D = The per share price on the last day of the period

A = $1,780,687.72
B = $156,283.75
C = 35,253,198.141
D = $10.56

Yield = 5.29%
<PAGE>
BENHAM INTERMEDIATE TERM TREASURY FUND
AVERAGE ANNUAL TOTAL RETURN
3/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
--------------------------------------------------------------------

One Year $1,000.00 $1,110.40 1.000000 11.04%

Five Year $1,000.00 $1,320.70 5.000000 5.72%

Ten Year $1,000.00 $2,069.40 10.000000 7.54%

Inception * $1,000.00 $4,523.40 17.872690 8.81%

TR = Total return for period TR=(ERV/P)-1 352.34%

*Date of Inception 5/16/80
<PAGE>
BENHAM GNMA FUND
YIELD CALCULATION
3/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = $7,131,377.41
B = $619,980.58
C = 119,859,202.262
D = $10.67

Yield = 6.19%
<PAGE>
BENHAM GNMA FUND
AVERAGE ANNUAL TOTAL RETURN
3/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
-----------------------------------------------------------

One Year $1,000.00 $1,102.10 1.000000 10.21%

Five Year $1,000.00 $1,373.00 5.000000 6.55%

Ten Year $1,000.00 $2,290.30 10.000000 8.64%

Inception * $1,000.00 $2,886.80 12.517454 8.84%

TR = Total return for period TR=(ERV/P)-1 188.68%

*Date of Inception: 9/23/85
<PAGE>
BENHAM LONG TERM TREASURY FUND
YIELD CALCULATION
3/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = Investment income earned during the period
B = Expenses accrued for the period (net of reimbursements)
C = The average daily number of shares outstanding during the
period that were entitled to receive dividends
D = The per share price on the last day of the period

A = $519,430.89
B = $43,949.66
C = 9,826,225.807
D = $10.58

Yield = 5.55%
<PAGE>
BENHAM LONG TERM TREASURY FUND
AVERAGE ANNUAL TOTAL RETURN
3/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
-----------------------------------------------------------

One Year $1,000.00 $1,204.80 1.000000 20.48%

Five Year $1,000.00 $1,490.30 5.000000 8.31%

Ten Year

Inception * $1,000.00 $1,586.80 5.557837 8.66%

TR = Total return for period TR=(ERV/P)-1 58.68%

*Date of Inception: 9/8/92
<PAGE>
BENHAM SHORT TERM TREASURY FUND
YIELD CALCULATION
3/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = Investment income earned during the period
B = Expenses accrued for the period (net of reimbursements)
C = The average daily number of shares outstanding during the
period that were entitled to receive dividends
D = The per share price on the last day of the period

A = $197,352.83
B = $18,298.10
C = 4,290,247.272
D = $9.80

Yield = 5.17%
<PAGE>
BENHAM SHORT TERM TREASURY FUND
AVERAGE ANNUAL TOTAL RETURN
3/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
---------------------------------------------------------------

One Year $1,000.00 $1,068.90 1.000000 6.89%

Five Year $1,000.00 $1,266.00 5.000000 4.83%

Ten Year

Inception * $1,000.00 $1,301.10 5.557837 4.85%

TR = Total return for period TR=(ERV/P)-1 30.11%

*Date of Inception: 9/8/92
<PAGE>
BENHAM INFLATION ADJUSTED INDEX FUND
YIELD CALCULATION
3/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = Investment income earned during the period
B = Expenses accrued for the period (net of reimbursements)
C = The average daily number of shares outstanding during the
period that were entitled to receive dividends
D = The per share price on the last day of the period

A = $25,705.63
B = $2,080.94
C = 540,453.157
D = $9.63

Yield = 5.51%
<PAGE>
BENHAM INFLATION ADJUSTED INDEX FUND
AVERAGE ANNUAL TOTAL RETURN
3/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
--------------------------------------------------------

One Year $1,000.00 $1,034.50 1.000000 3.45%

Five Year

Ten Year

Inception * $1,000.00 $1,014.10 1.133470 1.24%

TR = Total return for period TR=(ERV/P)-1 1.41%

*Date of Inception: 2/10/97
<PAGE>
BENHAM SHORT TERM GOVERNMENT FUND
YIELD CALCULATION
3/31/98

Formula: YIELD = 2[(A-B/C*D+1)^6-1]

A = Investment income earned during the period
B = Expenses accrued for the period (net of reimbursements)
C = The average daily number of shares outstanding during the
period that were entitled to receive dividends
D = The per share price on the last day of the period

A = $3,998,395.91
B = $392,131.32
C = 85,492,786.701
D = $9.46

Yield = 5.41%
<PAGE>
BENHAM SHORT TERM GOVERNMENT FUND
AVERAGE ANNUAL TOTAL RETURN
3/31/98

Formula: T=(ERV/P)^1/N -1

P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
N = Number of years
T = Average annual total return

P ERV N T
-------------------------------------------------------------

One Year $1,000.00 $1,066.60 1.000000 6.66%

Five Year $1,000.00 $1,254.70 5.000000 4.64%

Ten Year $1,000.00 $1,813.60 10.000000 6.13%

Inception * $1,000.00 $2,890.20 15.290897 7.19%

TR = Total return for period TR=(ERV/P)-1 189.02%

*Date of Inception: 12/15/82

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY GOVERNMENT INCOME TRUST AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL
CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA).
IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000773674
<NAME> AMERICAN CENTURY GOVERNMENT INCOME TRUST
<SERIES>
<NUMBER> 1
<NAME> BENHAM GNMA FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 1,324,977,727 <F1>
<INVESTMENTS-AT-VALUE> 1,350,986,243
<RECEIVABLES> 7,610,429
<ASSETS-OTHER> 4,056,029
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,362,652,701
<PAYABLE-FOR-SECURITIES> 72,492,271
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,060,042
<TOTAL-LIABILITIES> 76,552,313
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,284,010,304
<SHARES-COMMON-STOCK> 120,579,109
<SHARES-COMMON-PRIOR> 108,338,176
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (23,990,610)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 26,008,516
<NET-ASSETS> 1,286,100,388
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 84,778,235
<OTHER-INCOME> 0
<EXPENSES-NET> 6,978,947
<NET-INVESTMENT-INCOME> 77,799,288
<REALIZED-GAINS-CURRENT> 1,450,246
<APPREC-INCREASE-CURRENT> 35,274,054
<NET-CHANGE-FROM-OPS> 114,523,588
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 77,799,288
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 46,832,704
<NUMBER-OF-SHARES-REDEEMED> 40,381,529
<SHARES-REINVESTED> 5,789,758
<NET-CHANGE-IN-ASSETS> 166,935,287
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (25,368,678)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,898,043
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,978,947
<AVERAGE-NET-ASSETS> 1,145,618,583
<PER-SHARE-NAV-BEGIN> 10.33<F2>
<PER-SHARE-NII> 0.69<F2>
<PER-SHARE-GAIN-APPREC> 0.34<F2>
<PER-SHARE-DIVIDEND> 0.69<F2>
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.67<F2>
<EXPENSE-RATIO> 0.58<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY GOVERNMENT INCOME TRUST AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL
CLASSES, EXCEPT WHERE SUCH PRESENTATION IF NOT POSSIBLE(SUCH AS PER SHARE DATA).
IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000773674
<NAME> AMERICAN CENTURY GOVERNMENT INCOME TRUST
<SERIES>
<NUMBER> 2
<NAME> BENHAM INTERMEDIATE-TERM TREASURY FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 369,386,390 <F1>
<INVESTMENTS-AT-VALUE> 370,771,636
<RECEIVABLES> 4,706,534
<ASSETS-OTHER> 689,369
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 376,167,539
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,178,743
<TOTAL-LIABILITIES> 1,178,743
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 372,525,397
<SHARES-COMMON-STOCK> 35,497,574
<SHARES-COMMON-PRIOR> 32,666,395
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,078,153
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,385,246
<NET-ASSETS> 374,988,796
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21,299,336
<OTHER-INCOME> 0
<EXPENSES-NET> 1,779,829
<NET-INVESTMENT-INCOME> 19,519,507
<REALIZED-GAINS-CURRENT> 9,644,597
<APPREC-INCREASE-CURRENT> 6,630,430
<NET-CHANGE-FROM-OPS> 35,794,534
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19,519,507
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16,568,779
<NUMBER-OF-SHARES-REDEEMED> 15,351,681
<SHARES-REINVESTED> 1,614,081
<NET-CHANGE-IN-ASSETS> 46,204,598
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (8,441,089)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,520,464
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,779,829
<AVERAGE-NET-ASSETS> 346,771,832
<PER-SHARE-NAV-BEGIN> 10.06<F2>
<PER-SHARE-NII> 0.59<F2>
<PER-SHARE-GAIN-APPREC> 0.50<F2>
<PER-SHARE-DIVIDEND> 0.59<F2>
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.06<F2>
<EXPENSE-RATIO> 0.51<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY GOVERNMENT INCOME TRUST AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000773674
<NAME> AMERICAN CENTURY GOVERNMENT INCOME TRUST
<SERIES>
<NUMBER> 3
<NAME> BENHAM GOVERNMENT AGENCY MONEY MARKET FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 488,381,297
<INVESTMENTS-AT-VALUE> 488,381,297
<RECEIVABLES> 2,823,532
<ASSETS-OTHER> 760,463
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 491,965,292
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,173,945
<TOTAL-LIABILITIES> 4,173,945
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 487,813,820
<SHARES-COMMON-STOCK> 487,813,820
<SHARES-COMMON-PRIOR> 470,758,812
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (22,473)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 487,813,820
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 25,911,849
<OTHER-INCOME> 0
<EXPENSES-NET> 2,376,958
<NET-INVESTMENT-INCOME> 23,534,891
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 23,512,418
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 23,534,891
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 329,750,417
<NUMBER-OF-SHARES-REDEEMED> 398,276,839
<SHARES-REINVESTED> 22,581,430
<NET-CHANGE-IN-ASSETS> 17,032,535
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,929,073
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,376,958
<AVERAGE-NET-ASSETS> 469,187,073
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY GOVERNMENT INCOME TRUST AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000773674
<NAME> AMERICAN CENTURY GOVERNMENT INCOME TRUST
<SERIES>
<NUMBER> 4
<NAME> BENHAM SHORT-TERM GOVERNMENT FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 823,560
<INVESTMENTS-AT-VALUE> 823,112
<RECEIVABLES> 6,195
<ASSETS-OTHER> 1,848
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 831,155
<PAYABLE-FOR-SECURITIES> 20,064
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,627
<TOTAL-LIABILITIES> 22,691
<SENIOR-EQUITY> 855
<PAID-IN-CAPITAL-COMMON> 888,181
<SHARES-COMMON-STOCK> 85,460
<SHARES-COMMON-PRIOR> 54,730
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (80,124)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (448)
<NET-ASSETS> 808,464
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16,508
<OTHER-INCOME> 0
<EXPENSES-NET> 1,623
<NET-INVESTMENT-INCOME> 14,878
<REALIZED-GAINS-CURRENT> 731
<APPREC-INCREASE-CURRENT> (4,232)
<NET-CHANGE-FROM-OPS> 11,377
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14,878
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,286
<NUMBER-OF-SHARES-REDEEMED> 9,950
<SHARES-REINVESTED> 1,394
<NET-CHANGE-IN-ASSETS> 289,132
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (80,542)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,623
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,630
<AVERAGE-NET-ASSETS> 662,520
<PER-SHARE-NAV-BEGIN> 9.49
<PER-SHARE-NII> 0.21
<PER-SHARE-GAIN-APPREC> (0.03)
<PER-SHARE-DIVIDEND> 0.21
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.46
<EXPENSE-RATIO> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 41,601,991 <F1>
<INVESTMENTS-AT-VALUE> 41,770,222
<RECEIVABLES> 633,923
<ASSETS-OTHER> 189,480
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 42,593,625
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 258,896
<TOTAL-LIABILITIES> 258,896
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 42,356,571
<SHARES-COMMON-STOCK> 4,320,297
<SHARES-COMMON-PRIOR> 3,703,962
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (190,073)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 168,231
<NET-ASSETS> 42,334,729
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,330,971
<OTHER-INCOME> 0
<EXPENSES-NET> 169,057
<NET-INVESTMENT-INCOME> 2,115,925
<REALIZED-GAINS-CURRENT> 65,744
<APPREC-INCREASE-CURRENT> 378,595
<NET-CHANGE-FROM-OPS> 2,560,264
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,115,925
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,793,015
<NUMBER-OF-SHARES-REDEEMED> 2,343,675
<SHARES-REINVESTED> 166,995
<NET-CHANGE-IN-ASSETS> 6,480,452
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (255,817)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 169,057
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 230,291
<AVERAGE-NET-ASSETS> 38,882,155
<PER-SHARE-NAV-BEGIN> 9.68<F2>
<PER-SHARE-NII> 0.53<F2>
<PER-SHARE-GAIN-APPREC> 0.12<F2>
<PER-SHARE-DIVIDEND> 0.53<F2>
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.80<F2>
<EXPENSE-RATIO> 0.55<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 92,408,417 <F1>
<INVESTMENTS-AT-VALUE> 102,231,372
<RECEIVABLES> 1,688,619
<ASSETS-OTHER> 225,700
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 104,145,691
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 546,365
<TOTAL-LIABILITIES> 546,365
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 92,236,977
<SHARES-COMMON-STOCK> 9,795,492
<SHARES-COMMON-PRIOR> 13,580,394
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,539,394
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,822,955
<NET-ASSETS> 103,599,326
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,125,299
<OTHER-INCOME> 0
<EXPENSES-NET> 676,349
<NET-INVESTMENT-INCOME> 7,448,950
<REALIZED-GAINS-CURRENT> 4,166,419
<APPREC-INCREASE-CURRENT> 12,123,302
<NET-CHANGE-FROM-OPS> 23,738,671
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,448,950
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,629,317
<NUMBER-OF-SHARES-REDEEMED> 14,077,909
<SHARES-REINVESTED> 663,690
<NET-CHANGE-IN-ASSETS> (22,970,517)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (2,627,025)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 592,017
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 676,349
<AVERAGE-NET-ASSETS> 124,196,302
<PER-SHARE-NAV-BEGIN> 9.32
<PER-SHARE-NII> 0.61
<PER-SHARE-GAIN-APPREC> 1.26
<PER-SHARE-DIVIDEND> 0.61
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.58
<EXPENSE-RATIO> 0.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY GOVERNMENT INCOME TRUST AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000773674
<NAME> AMERICAN CENTURY GOVERNMENT INCOME TRUST
<SERIES>
<NUMBER> 7
<NAME> BENHAM INFLATION-ADJUSTED TREASURY FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 5,283,212
<INVESTMENTS-AT-VALUE> 5,230,990
<RECEIVABLES> 38,666
<ASSETS-OTHER> 34,632
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,304,288
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24,910
<TOTAL-LIABILITIES> 24,910
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,832,173
<SHARES-COMMON-STOCK> 548,332
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (50,573)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (52,222)
<NET-ASSETS> 5,279,378
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 203,892
<OTHER-INCOME> 0
<EXPENSES-NET> 20,264
<NET-INVESTMENT-INCOME> 183,628
<REALIZED-GAINS-CURRENT> (57,487)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 126,141
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 183,628
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 539,728
<NUMBER-OF-SHARES-REDEEMED> 242,312
<SHARES-REINVESTED> 17,153
<NET-CHANGE-IN-ASSETS> 3,002,002
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 17,894
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40,767
<AVERAGE-NET-ASSETS> 4,128,824
<PER-SHARE-NAV-BEGIN> 9.74
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> (0.11)
<PER-SHARE-DIVIDEND> 0.44
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.63
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY GOVERNMENT INCOME TRUST AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000773674
<NAME> AMERICAN CENTURY GOVERNMENT INCOME TRUST
<SERIES>
<NUMBER> 8
<NAME> BENHAM CAPITAL PRESERVATION FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 2,634,381,446
<INVESTMENTS-AT-VALUE> 2,634,381,446
<RECEIVABLES> 684,014,235
<ASSETS-OTHER> 5,604,878
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,324,000,559
<PAYABLE-FOR-SECURITIES> 152,659,350
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26,757,602
<TOTAL-LIABILITIES> 179,416,952
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,144,640,390
<SHARES-COMMON-STOCK> 3,144,640,390
<SHARES-COMMON-PRIOR> 2,977,972,397
<ACCUMULATED-NII-CURRENT> (56,783)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,144,583,607
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 164,225,471
<OTHER-INCOME> 0
<EXPENSES-NET> 14,837,300
<NET-INVESTMENT-INCOME> 149,388,171
<REALIZED-GAINS-CURRENT> 1,225,909
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 150,614,080
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 149,514,002
<DISTRIBUTIONS-OF-GAINS> 1,199,172
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,687,140,573
<NUMBER-OF-SHARES-REDEEMED> 2,664,029,704
<SHARES-REINVESTED> 143,557,124
<NET-CHANGE-IN-ASSETS> 166,568,899
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 11,994,029
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,837,300
<AVERAGE-NET-ASSETS> 3,048,219,446
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.49
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>