Rule No. 497(e)
File No. 33-02633
STEIN ROE INCOME TRUST
BOND FUNDS
----------
STEIN ROE LIMITED MATURITY INCOME FUND
STEIN ROE GOVERNMENT INCOME FUND
STEIN ROE INTERMEDIATE BOND FUND
STEIN ROE INCOME FUND
THE NOVEMBER 1, 1995 DATE OF THIS PROSPECTUS IS NULL AND VOID.
THE NEW DATE OF THIS PROSPECTUS IS JULY 1, 1996
SUPPLEMENT
NEW AGREEMENTS. On July 1, 1996, the investment advisory
agreement with Stein Roe & Farnham Incorporated (the "Adviser")
relating to each Fund was replaced with an administrative
agreement and a management agreement. The new fee schedules,
which do not result in a fee increase, are stated below at annual
rates as a percentage of average daily net assets (dollar amounts
are in millions):
FUND MANAGEMENT FEE ADMINISTRATIVE FEE TOTAL FEES
- ------------ ---------------- ------------------ -----------------
Income Fund .500% up to $100, .150% up to $100, .650% up to $100,
.475% thereafter .125% thereafter .600% thereafter
Government
Income Fund .450% up to $100, .150% up to $100, .600% up to $100,
.425% thereafter .125% thereafter .550% thereafter
Intermediate
Bond Fund .350% .150% .500%
Limited
Maturity
Income Fund .450% up to $100, .150% up to $100, .600% up to $100,
.425% next $100, .125% next $100, .550% next $100,
.400% thereafter .100% thereafter .500% thereafter
INTERFUND LENDING PROGRAM. On June 18, 1996, each Fund's
shareholders approved changes in the Fund's investment
restrictions regarding borrowing and lending to permit the Fund to
participate in an interfund lending program with other mutual
funds managed by the Adviser. The second paragraph under
Restrictions on the Funds' Investments (pages 25-26 of the
Prospectus) is revised to read as follows:
"No Fund may make loans except that each Fund may (1)
purchase money market instruments and enter into repurchase
agreements; (2) acquire publicly-distributed or privately-
placed debt securities; (3) lend its portfolio securities
under certain conditions; and (4) participate in an interfund
lending program with other Stein Roe Funds. A Fund may not
borrow money, except for non-leveraging, temporary, or
emergency purposes or in connection with participation in the
interfund lending program. Neither a Fund's aggregate
borrowings (including reverse repurchase agreements) nor a
Fund's aggregate loans at any one time may exceed 33 1/3% of
the value of its total assets."
WIRE REDEMPTION PRIVILEGE. The Telephone Redemption by Wire
Privilege permits you to request a redemption from your Fund
account by phone and have the proceeds wired to your account at a
commercial bank, previously designated by you, that is a member of
the Federal Reserve System. The wire fee (currently $3.50 per
transaction) will be deducted from the amount wired. If you also
establish the Electronic Transfer Privilege, the bank account that
you designate for both Privileges must be the same. There is a
$1,000 minimum and a $100,000 maximum amount on each Telephone
Redemption by Wire. The Funds normally intend to pay proceeds of
a Telephone Redemption by Wire on the next business day.
PRINTING ERROR. The paragraph at the bottom of page 26 and
the top of page 27 of the Prospectus should read as follows:
"Limited Maturity Income Fund is appropriate for investors who
seek higher yields than are usually available from money
market instruments with stable prices and shorter maturities,
but who also want less net asset fluctuation than that of a
longer-term fund. Unlike money market funds, however, the
Fund does not seek to maintain a stable net asset value and
may not be able to return dollar-for-dollar the money
invested. Intermediate Bond Fund is appropriate for investors
who seek high income with less net asset value fluctuation
from interest rate changes than that of a longer-term fund,
and who can accept greater levels of credit and other risks
associated with securities that are rated below investment
grade. Government Income Fund is designed for investors who
seek high income with minimum risk other than the risk of
changes in net asset value caused by fluctuations in
prevailing levels of interest rates. Income Fund is designed
for investors who seek a higher level of income and who can
accept greater levels of credit and other risks associated
with securities of medium or lower quality."
FINANCIAL HIGHLIGHTS. The per share data (for a share
outstanding throughout the period) contained in the section
Financial Highlights (pages 8-11 of the Prospectus) is updated by
adding the following unaudited financial information for the six
months ended December 31, 1995:
LIMITED
MATURITY GOVERNMENT INTERMEDIATE
INCOME INCOME BOND INCOME
FUND FUND FUND FUND
-------- ---------- ----------- -------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.70 $ 9.85 $ 8.67 $ 9.79
------ ------ ------ -------
Income from Investment Operations
Net investment income .31 .32 .30 .37
Net realized and unrealized gains
(losses) on investments .06 .32 .27 .29
------ ------ ------ -------
Total from investment operations .37 .64 .57 .66
Distributions from net investment
income (.31) (.32) (.30) (.37)
------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 9.76 $10.17 $ 8.94 $10.08
------ ------ ------ -------
------ ------ ------ -------
Ratio of net expenses to average
net assets (a) *0.52% *1.00% *0.70% *0.82%
Ratio of net investment income to
average net assets (b) *6.10% *6.06% *6.57% *7.24%
Portfolio turnover rate **12% **15% **107% **45%
Total return (b) **3.74% **6.38% **6.54% **6.74%
Net assets, end of period
(000 omitted) $36,670 $36,756 $314,381 $208,398
_______________
*Annualized.
**Not annualized.
(a) If the Funds had paid all of their expenses and there had been
no reimbursement of expenses by the Adviser, for the period
ended December 31, 1995, this ratio would have been 1.23% for
Limited Maturity Income Fund, 1.12% for Government Income
Fund, 0.73% for Intermediate Bond Fund, and 0.88% for Income
Fund.
(b) Computed giving effect to the Adviser's expense limitation
undertaking.
NEW ADDRESS FOR ORDERS. Effective July 5, 1996, orders for
purchases and redemptions of Fund shares should be mailed to
SteinRoe Services Inc. at P.O. Box 8900, Boston, Massachusetts
02205. Participants in the Stein Roe Counselor [service mark]
Program should send orders to SteinRoe Services Inc. at P.O. Box
803938, Chicago, Illinois 60680.
The Statement of Additional Information dated July 1, 1996 and
the most recent financial statements may be obtained without charge
by writing to the Secretary of the Trust at Suite 3200, One South
Wacker Drive, Chicago, Illinois 60606, or by calling 800-338-2550.
NEW INSTRUCTIONS FOR PURCHASES BY WIRE TRANSFER. Effective
July 5, 1996, wire transfers for the purchase of Fund shares
should be addressed as follows:
First National Bank of Boston
Boston, Massachusetts
ABA Routing No. 011000390
Attention: SteinRoe Services Inc.
Fund No. ___; Stein Roe _____ Fund
Account of (exact name(s) in registration)
Shareholder Account No. ________
Fund Numbers:
75 Limited Maturity Income Fund
10 Government Income Fund
35 Intermediate Bond Fund
09 Income Fund
Participants in the Stein Roe Counselor [service mark] program
should should contact their Stein Roe Counselor [service mark]
Account Executive for wire instructions.
This Supplement is Dated July 3, 1996
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