LIBERTY STEIN ROE FUNDS INCOME TRUST, 497, 1999-11-02

LIBERTY STEIN ROE FUNDS INCOME TRUST
497, 1999-11-02

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Stein Roe Money Market Fund

Cash Reserves Fund

Prospectus
Nov. 1, 1999

The Securities and Exchange Commission has not approved or
disapproved these securities or determined whether this prospectus
is truthful or complete. Anyone who tells you otherwise is
committing a crime.

<PAGE>

3 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

7 Financial Highlights

8 Your Account
Purchasing Shares
Opening an Account
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Reporting to Shareholders
Dividends and Distributions

14 Other Investments and Risks

14 The Fund's Management
Investment Adviser
Master/Feeder Fund Structure
Year 2000 Readiness

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND

INVESTMENT GOAL Stein Roe Cash Reserves Fund seeks maximum
current income, consistent with capital preservation and the
maintenance of liquidity.

PRINCIPAL INVESTMENT STRATEGY Cash Reserves Fund invests all of
its assets in SR&F Cash Reserves Portfolio as part of a master
fund/feeder fund structure. The Portfolio invests in high-quality
money market securities. Money market funds are subject to strict
rules that require them to buy individual securities that have
remaining maturities of 13 months or less, maintain an average
dollar-weighted portfolio maturity of 90 days or less, and buy
only high-quality, U.S. dollar-denominated obligations. The
Portfolio invests in the following types of money market
securities:

* Securities issued or guaranteed by the U.S. government or by its
agencies.
* Securities issued or guaranteed by the government of any foreign
country that have a long-term rating at time of purchase of A or
better (or equivalent rating) by at least one nationally
recognized bond rating agency.
* Certificates of deposit, bankers' acceptances, time deposits and
other short-term securities issued by domestic or foreign banks
or their subsidiaries or branches.
* Commercial paper of domestic or foreign issuers, including
variable-rate demand notes.
* Short-term debt securities having a long-term rating at time of
purchase of A or better (or equivalent rating) by at least one
nationally recognized bond rating agency.
* Repurchase agreements.
* Other high-quality short-term obligations.

The Portfolio invests more than 25% of its total assets in
securities of issuers in the financial services industry,
including banks and financial companies such as mortgage
companies, investment banks, brokerage companies, special purpose
entities, and personal and business credit institutions

The Fund seeks to preserve the value of your investment at $1 per
share.

The portfolio manager generally makes decisions on buying and
selling portfolio investments based upon her judgment that the
decision will improve the Fund's investment return and further its
investment goal. The portfolio manager may also be required to
sell portfolio investments to fund redemptions.

PRINCIPAL INVESTMENT RISKS The primary risks of investing in the
Fund are described below. These risks could cause you to lose
money by investing in the Fund.

An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by
investing in the Fund. Additionally, the Fund's yield will vary
as the short-term securities in its portfolio mature and the
proceeds are reinvested in securities with different interest
rates.

Market risk is the risk that the price of a security held by the
Fund will fall due to changing market, economic, or political
conditions, or due to the financial condition of the company which
has issued the security. Market risk includes interest rate risk.
Interest rate risk is the risk of change in the price of a
security when interest rates increase or decrease. In general, if
interest rates rise, securities prices fall; and if interest rates
fall, securities prices rise. Changes in the values of securities
usually will not affect the amount of income the Fund receives
from them but will affect the value of the Fund's shares.

Because the Portfolio may invest in debt securities issued by
private entities, including corporate bonds, the Fund is subject
to issuer risk. Issuer risk is the possibility that changes in
the financial condition of the issuer of a security, changes in
general economic conditions, or changes in economic conditions
that affect the issuer may impact the issuer's ability to make
timely payment of interest or principal. This could result in
decreases in the price of the security.

Foreign securities are subject to special risks. The liquidity of
foreign securities may be more limited than domestic securities,
which means that the Portfolio may at times be unable to sell them
at desirable prices. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of an
issuer or its assets.

Because of the policy of investing more than 25% of assets in
securities of issuers in the financial services industry, the Fund
may be affected more adversely than competing funds by changes
affecting that industry.

Financial Services Industry Concentration. The financial services
industries are subject to extensive government regulation which
can limit both the amounts and types of loans and other financial
commitments they can make, and the interest rates and fees they
can charge. Profitability is largely dependent on the
availability and cost of capital funds, and can fluctuate
significantly when interest rates change. Credit losses resulting
from financial difficulties of borrowers can negatively affect the
financial services industries. Insurance companies can be subject
to severe price competition. The financial services industries
are currently undergoing relatively rapid change as existing
distinctions between financial service segments become less clear.
For instance, recent business combinations have included
insurance, finance, and securities brokerage under single
ownership. Some primarily retail corporations have expanded into
securities and insurance industries. Moreover, the federal laws
generally separating commercial and investment banking are
currently being studied by Congress.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Cash Reserves Fund if you:
* want a relatively stable and liquid investment as well the
potential for a competitive yield
* are saving for a short-term investment or creating an emergency
fund
* want the ability to write checks on your account
* are looking to diversify your investment portfolio with cash or
similar types of investments

Cash Reserves Fund is not appropriate for investors who:
* want high return potential
* don't want current income

FUND PERFORMANCE The following charts show the Fund's
performance for the past 10 calendar years through Dec. 31, 1998.
The returns include the reinvestment of dividends and
distributions. As with all mutual funds, past performance is no
guarantee of future results.

Year-by-Year Total Returns

Year-by-year calendar total returns show the Fund's volatility
over a period of time. This chart illustrates performance
differences for each calendar year and provides an indication of
the risks of investing in the Fund.

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
8% 8.86%
7% 7.78%
6%
5% 5.71% 5.44% 5.01% 5.01%
4% 4.86%
3% 3.42% 3.71%
2% 2.58%
0%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
[/bar chart]
[ ] Cash Reserves Fund

The Fund's year-to-date total return through Sept. 30, 1999, was
3.33%.
For period shown on the chart above:

Best quarter: 2nd quarter 1989, +2.28%
Worst quarter: 2nd quarter 1993, +0.63%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We show returns for calendar years to be consistent with
the way other mutual funds report performance in their
prospectuses. This provides an indication of the risks of
investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending Dec. 31, 1998
1 yr 5 yr 10 yr
-------------------------------
Cash Reserves Fund 5.01% 4.80% 5.22%

For current 7-day yield information on the yield, please call 800-
338-2550.
<R/>

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund or the Portfolio
pays fees and other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.49%
Distribution (12b-1) fees None
Other expenses 0.21%
Total annual fund operating expenses 0.70%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% total return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality fund
returns and other expenses change. This example reflects expenses
of both the Fund and the Portfolio. Expenses based on these
assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Cash Reserves Fund $72 $224 $390 $871

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the last five fiscal years. The Fund's fiscal
year runs from July 1 to June 30. The total returns in the table
represent the return that investors earned assuming that they
reinvested all dividends and distributions. Certain information
in the table reflects the financial results for a single Fund
share. Ernst & Young LLP, independent auditors, audits this
information and issues a report that appears in the Fund's annual
report along with the financial statements. To request the annual
report, please call 800-338-2550.

CASH RESERVES FUND
PER SHARE DATA
<TABLE>
<CAPTION>
For years ending June 30,
1999 1998 1997 1996 1995
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income 0.0450 0.050 0.048 0.050 0.048
Dividends (from net investment
income) (0.0450) (0.050) (0.048) (0.050) (0.048)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return 4.64% 5.09% 4.92% 5.07% 4.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $503,686 $493,954 $452,358 $476,840 $498,163
Ratio of net expenses to
average net assets 0.70% 0.75% 0.77% 0.78% 0.76%
Ratio of net investment income
to average net assets 4.58% 4.98% 4.80% 4.98% 4.83%
</TABLE>

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. Your purchases are made at the net asset
value (NAV) next determined after the Fund receives your check,
wire transfer or electronic transfer. If the Fund receives your
check, wire transfer or electronic transfer after the close of
regular trading on the New York Stock Exchange (NYSE)-normally 3
p.m. Central time-your purchase is effective on the next business
day.

Purchases through Third Parties

If you purchase Fund shares through certain broker-dealers, banks
or other intermediaries (intermediaries), they may charge a fee
for their services. They may also place limits on your ability to
use services the Fund offers. There are no charges or limitations
if you purchase shares directly from the Fund, except those fees
described in this prospectus.

If an intermediary is an agent or designee of the Fund, orders are
processed at the NAV next calculated after the intermediary
receives the order. The intermediary must segregate any orders it
receives after the close of regular trading on the NYSE and
transmit those orders separately for execution at the NAV next
determined.

Conditions of Purchase

An order to purchase Fund shares is not binding unless and until
an authorized officer, agent or designee of the Fund accepts it.
Once we accept your purchase order, you may not cancel or revoke
it; however, you may redeem your shares. The Fund may reject any
purchase order if it determines that the order is not in the best
interests of the Fund and its investors. The Fund may waive or
lower its investment minimums for any reason. If you participate
in the Stein Roe Counselor [service mark] program or are a client
of Stein Roe Private Capital Management, the minimum initial
investment is determined by those programs.

ACCOUNT MINIMUMS
Minimum to Minimum Minimum
Type of Account Open an Account Addition Balance
- ------------------------------------------------------------
Regular $2,500 $100 $1,000
Custodial (UGMA/UTMA) $1,000 $100 $1,000
Automatic Investment Plan $1,000 $50 -
Roth and Traditional IRA $500 $50 $500
Educational IRA $500 $50* $500

*Maximum $500 contribution per calendar year per child.

Opening an Account

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY MAIL:
Complete the application.
Make check payable to Stein Roe Mutual Funds.

Mail application and check to:
SteinRoe Services Inc.
P.O. Box 8900
Boston, MA 02205

BY WIRE:
Mail your application to the address listed on
the left, then call 800-338-2550 to obtain an
account number. Include your Social Security
Number. To wire funds, use the instructions
below.

Adding to an Account BY MAIL:
Make check payable to Stein Roe Mutual Funds.
Be sure to write your account number on the
check.

Fill out investment slip (stub from your
statement or confirmation) or include a note
indicating the amount of your purchase, your
account number, and the name in which your
account is registered.

Mail check with investment slip or note to the
address above.

BY WIRE:
Wire funds to:
First National Bank of Boston
ABA: 011000390
Attn: SSI, Account No. 560-99696
Fund No. 36; Stein Roe Cash Reserves Fund
Your name (exactly as in the registration).
Fund account number.

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY ELECTRONIC FUNDS TRANSFER:
You cannot open a new account via electronic
transfer.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY;
Contact your financial professional.

Adding to an Account BY ELECTRONIC FUNDS TRANSFER;
Call 800-338-2550 to make your purchase. To
set up prescheduled purchases, be sure to
elect the Automatic Investment Plan (Stein Roe
Asset [SERVICE MARK] Builder) option on your
application.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY:
Contact your financial professional.

All checks must be made payable in U.S. dollars and drawn on U.S.
banks. Money orders and third-party checks will not be accepted.

DETERMINING SHARE PRICE (NAV) The Fund's share price is its NAV
next determined. The Fund attempts to maintain its NAV at $1 per
share. NAV is the difference between the values of the Fund's
assets and liabilities divided by the number of shares
outstanding. We determine NAV twice each business day: at 11
a.m. Central time and at the close of regular trading on the NYSE-
normally 3 p.m. Central time.

To calculate the NAV, we value portfolio securities based on their
amortized cost, which does not take into account unrealized gains
or losses. The extent of any deviation between the NAV based upon
market quotations or equivalents and $1 per share based on
amortized cost will be examined by the Board. If such deviation
were to exceed 1/2 of 1%, the Board would consider what action, if
any, should be taken, including selling portfolio securities,
increasing, reducing, or suspending distributions or redeeming
shares in kind. Assets and securities for which this valuation
method does not produce a fair value are valued at a fair value
determined in good faith by the Board.

The Portfolio's foreign securities may trade on days when the NYSE
is closed. We will not price shares on days that the NYSE is
closed for trading and you may not purchase or redeem shares.

SELLING SHARES You may sell your shares any day the Fund is open
for business. Please follow the instructions below.

SELLING SHARES
BY MAIL: Send a letter of instruction, in English, including
your account number and the dollar value or number
of shares you wish to sell. Sign the request
exactly as the account is registered. Be sure to
include a signature guarantee. All supporting legal
documents as required from executors, trustees,
administrators, or others acting on accounts not
registered in their names, must accompany the
request. We will mail the check to your registered
address.

BY PHONE: This feature is automatically added to your account
unless you decline it on your application. Call
800-338-2550 to redeem an amount of $1,000 or more.
We will mail a check to your registered address.

BY WIRE: Fill out the appropriate areas of the account
application for this feature. Proceeds of $1,000 or
more ($100,000 maximum) may be wired to your
predesignated bank account. Call 800-338-2550 to
give instructions to Stein Roe. There is a $7
charge for wiring redemption proceeds to your bank.

BY ELECTRONIC TRANSFER: Fill out the appropriate areas of the
account application for this feature. To request an
electronic transfer (not less than $50; not more
than $100,000), call 800-338-2550. We will transfer
your sale proceeds electronically to your bank. The
bank must be a member of the Automated Clearing
House.

BY EXCHANGE: Call 800-338-2550 to exchange any portion of your
Fund shares for shares in any other Stein Roe no-
load fund.

BY AUTOMATIC EXCHANGE: Fill out the appropriate areas of the
account application for this feature. Redeem a
fixed amount on a regular basis (not less than $50
per month; not more than $100,000) from the Fund for
investment in another Stein Roe no-load fund.

BY CHECK WRITING: Complete the appropriate section of the account
application for this feature. You may redeem shares
by writing checks (minimum $50) that are drawn
against a special checking account the Fund has with
the First National Bank of Boston.

What You Need to Know When Selling Shares

Once we receive and accept your order to sell shares, you may not
cancel or revoke it. We cannot accept an order to sell that
specifies a particular date or price or any other special
conditions. If you have any questions about the requirements for
selling your shares, please call 800-338-2550 before submitting
your order.

The Fund redeems shares at the NAV next determined after an order
has been accepted. We mail proceeds within seven days after the
sale. The Fund normally pays wire redemption or electronic
transfer proceeds on the next business day.

We will not pay sale proceeds until your shares are paid for. If
you attempt to sell shares purchased by check or electronic
transfer within 15 days of the purchase date, we will delay
sending the sale proceeds until we can verify that those shares
are paid for. You may avoid this delay by purchasing shares by a
federal funds wire.

We use procedures reasonably designed to confirm that telephone
instructions are genuine. These include recording the
conversation, testing the identity of the caller by asking for
account information, and sending prompt written confirmation of
the transaction to the shareholder of record. If these procedures
are followed, the Fund and its service providers will not be
liable for any losses due to unauthorized or fraudulent
instructions.

If the amount you redeem is in excess of the lesser of (1)
$250,000 or (2) 1% of the Fund's assets, the Fund may pay the
redemption "in kind." This is payment in portfolio securities
rather than cash. If this occurs, you may incur transaction costs
when you sell the securities.

Involuntary Redemption

If your account value falls below $1,000, the Fund may redeem your
shares and send the proceeds to the registered address. You will
receive notice 30 days before this happens. If your account falls
below $10, the Fund may redeem your shares without notice to you.

Low Balance Fee

Due to the expense of maintaining accounts with low balances, if
your account balance falls below $2,000 ($800 for custodial
accounts), you will be charged a low balance fee of $5 per
quarter. The low balance fee does not apply to: (1) shareholders
whose accounts in the Stein Roe Funds total $50,000 or more; (2)
Stein Roe IRAs; (3) other Stein Roe prototype retirement plans;
(4) accounts with automatic investment plans (unless regular
investments have been discontinued); or (5) omnibus or nominee
accounts. The Fund can waive the fee, at its discretion, in the
event of significant market corrections.

EXCHANGING SHARES You may exchange Fund shares for shares of
other Stein Roe no-load funds. Call 800-338-2550 to request a
prospectus and application for the fund you wish to exchange into.
Please be sure to read the prospectus carefully before you
exchange your shares.

The account you exchange into must be registered exactly the same
as the account you exchange from. You must meet all investment
minimum requirements for the fund you wish to exchange into before
we can process your exchange transaction.

An exchange is a redemption and purchase of shares for tax
purposes, and you may realize a gain or a loss when you exchange
Fund shares for shares of another fund.

We may change, suspend or eliminate the exchange service after
notification to you.

Generally, we limit you to four telephone exchanges "roundtrips"
per year. A roundtrip is an exchange out of the Fund into another
Stein Roe no-load fund and then back to the Fund.

REPORTING TO SHAREHOLDERS To reduce the volume of mail you
receive, only one copy of certain materials, such as shareholder
reports, will be mailed to your household (same address). Please
call 800-338-2550 if you want to receive additional copies free of
charge. This policy may not apply if you purchase shares through
an intermediary.

Dividends and Distributions Income dividends are declared daily,
paid monthly, and confirmed at least quarterly. The Fund
distributes, at least once a year, virtually all of its net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses. If the NAV per share were
to decline below $1, the Board might temporarily reduce or suspend
dividends in an effort to maintain NAV at $1 per share.

A capital gain is the increase in value of a security that the
Portfolio holds. The gain is "unrealized" until the security is
sold. Each realized capital gain is either short term or long
term depending on whether the Portfolio held the security for one
year or less or more than one year, regardless of how long you
have held your Fund shares.

When the Fund makes a distribution of income or capital gains, the
distribution is automatically invested in additional shares of the
Fund unless you elect on the account application to have
distributions paid by check.

[callout]
OPTIONS FOR RECEIVING DISTRIBUTION AND REDEMPTION PROCEEDS:
* by check
* by electronic transfer into your bank account
* a purchase of shares of another Stein Roe fund
* a purchase of shares in a Stein Roe fund account of another
person
[end of callout]

If you elect to receive distributions by check and a distribution
check is returned to the Fund as undeliverable, or if you do not
present a distribution check for payment within six months, we
will change the distribution option on your account and reinvest
the proceeds of the check in additional shares of the Fund. You
will not receive any interest on amounts represented by uncashed
distribution or redemption checks.

Tax Consequences

You are subject to federal income tax on both dividends and
capital gains distributions whether you elect to receive them in
cash or reinvest them in additional Fund shares. If the Fund
declares a distribution in December, but does not pay it until
after December 31, you will be taxed as if the distribution were
paid in December. Stein Roe will process your distributions and
send you a statement for tax purposes each year showing the source
of distributions for the preceding year.

TRANSACTION TAX STATUS
- ----------------------------------------------------------------
Income dividend Ordinary income
Short-term capital gain distribution Ordinary income
Long-term capital gain distribution Capital gain
Sale of shares owned one year or less Gain is ordinary income;
loss is subject to special
rules
Sale of shares owned more than one year Capital gain or loss

In addition to the dividends and capital gains distributions made
by the Fund, you may realize a capital gain or loss when selling
and exchanging Fund shares. Such transactions may be subject to
federal income tax.

This tax information provides only a general overview. It does
not apply if you invest in a tax-deferred retirement account such
as an IRA. Please consult your own tax advisor about the tax
consequences of an investment in the Fund.

<PAGE>

OTHER INVESTMENTS AND RISKS

The first portion of this prospectus describes the Fund's
principal investment strategy and principal investment risks. In
seeking to meet its investment goals, the Portfolio also may
invest in other securities and use other investment techniques.
The Portfolio may elect not to buy any of these other securities
or use any of these other investment techniques. The Fund may not
always achieve its investment goal.

The Statement of Additional Information (SAI) contains additional
information about the Fund's securities and investment techniques
(including other securities and techniques) and the risks
associated with them. Such risks could cause you to lose money by
investing in the Fund or could cause the Fund's total return or
yield to decrease. The SAI also contains the Fund's fundamental
and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

The Fund and Portfolio may lend money to and borrow money from
other funds advised by Stein Roe. They will do so when Stein Roe
believes such lending or borrowing is necessary and appropriate.
Borrowing costs will be the same as or lower than the costs of a
bank loan.

<PAGE>

THE FUND'S MANAGEMENT

INVESTMENT ADVISER Stein Roe & Farnham Incorporated (Stein Roe),
One South Wacker Drive, Chicago, IL 60606, manages the day-to-day
operations of the Fund and Portfolio. Stein Roe (and its
predecessor) has advised and managed mutual funds since 1949. For
the fiscal year ended June 30, 1999, the Fund paid to Stein Roe
aggregate fees of 0.49% of average net assets.

Stein Roe's mutual funds and institutional investment advisory
businesses are part of a larger business unit known as Liberty
Funds Group (LFG) that includes several separate legal entities.
LFG includes certain affiliates of Stein Roe, including Colonial
Management Associates, Inc. (Colonial). The LFG business unit is
managed by a single management team. Colonial and other LFG
entities also share personnel, facilities, and systems with Stein
Roe that may be used in providing administrative or operational
services to the Fund. Colonial is a registered investment
adviser. Stein Roe also has a wealth management business that is
not part of LFG and is managed by a different team. Stein Roe
and the other entities that make up LFG are subsidiaries of
Liberty Financial Companies, Inc.

MASTER/FEEDER FUND STRUCTURE Unlike mutual funds that directly
acquire and manage their own portfolios of securities, the Fund is
a "feeder" fund in a "master/feeder" structure. This means that
the Fund invests its assets in a larger "master" portfolio of
securities (the Portfolio) that has an investment objective and
policies substantially identical to those of the Fund. The
investment performance of the Fund depends upon the investment
performance of the Portfolio. If the investment policies of the
Fund and the Portfolio became inconsistent, the Board of Trustees
of the Fund can decide what actions to take. Actions the Board of
Trustees may recommend include withdrawal of the Fund's assets
from the Portfolio. For more information on the master/feeder
fund structure, see the SAI.

YEAR 2000 READINESS Like other investment companies, financial
and business organizations and individuals around the world, the
Fund could be adversely affected if the computer systems used by
Stein Roe, other service providers and the issuers in which the
Portfolio invests do not properly process and calculate date-
related information and data from and after Jan. 1, 2000. This is
commonly known as the "Year 2000 problem." The Fund's service
providers are taking steps that they believe are reasonably
designed to address the Year 2000 problem, including communicating
with vendors who furnish services, software and systems to the
Fund to provide that date-related information and data can be
properly processed after Jan. 1, 2000. Many Fund service
providers and vendors, including the Fund's service providers, are
in the process of making Year 2000 modifications to their software
and systems and believe that such modifications will be completed
on a timely basis prior to Jan. 1, 2000. In addition, Year 2000
readiness is one of the factors considered by Stein Roe in its
ongoing assessment of issuers in which the Portfolio invests, to
the extent that information is readily available. However, no
assurances can be given that the Fund will not be adversely
affected by these matters.

<PAGE>

FOR MORE INFORMATION

You can obtain more information about the Fund's investments in
its semiannual and annual reports to investors. These reports
discuss the market conditions and investment strategies that
affected the Fund's performance over the past six months and year.

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One South Wacker Drive
Suite 3200
Chicago, IL 60606
800-338-2550
www.steinroe.com

Text-only versions of all Fund documents can be viewed online or
downloaded from the SEC at www.sec.gov. You can also obtain
copies by visiting the SEC's Public Reference Room in Washington,
DC, by calling 800-SEC-0330, or by sending your request and the
appropriate fee to the SEC's public reference section, Washington,
DC 20549-6009.

Investment Company Act file number of Liberty-Stein Roe Funds
Income Trust: 811-4552

LIBERTY FUNDS DISTRIBUTOR, INC.

- -----------------------------------------------------------------

Stein Roe Taxable Bond Funds

Intermediate Bond Fund
Income Fund
High Yield Fund

Prospectus
Nov. 1, 1999

<PAGE>

Each fund section contains the following information specific to
that fund: investment goal; principal investment strategy;
principal investment risks; fund performance; and your expenses.

Please keep this prospectus as your reference manual.

3 Intermediate Bond Fund

8 Income Fund

13 High Yield Fund

17 Financial Highlights

20 Your Account
Purchasing Shares
Opening an Account
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Reporting to Shareholders
Dividends and Distributions

26 Other Investments and Risks
Hedging Strategies
Mortgage-Backed Securities and Asset-Backed Securities
When-Issued Securities and Forward Commitments
Zero Coupon Securities
PIK Bonds
Illiquid Investments
Portfolio Turnover
Temporary Defensive Positions
Interfund Lending Program

29 The Funds' Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure
Year 2000 Readiness

<PAGE>

THE FUNDS
INTERMEDIATE BOND FUND

INVESTMENT GOAL Stein Roe Intermediate Bond Fund seeks its total
return by pursuing current income and opportunities for capital
appreciation.

PRINCIPAL INVESTMENT STRATEGY Intermediate Bond Fund invests all
of its assets in SR&F Intermediate Bond Portfolio as part of a
master fund/feeder fund structure. The Portfolio invests at least
65% of its total assets in:

* debt securities issued by the U.S. government-these include U.S.
Treasury securities and agency securities; agency securities
include certain mortgage-backed securities, which represent
interests in pools of mortgages,
* debt securities of U.S. corporations, and
* mortgage-backed securities and asset-backed securities issued by
private (non-governmental) entities.

The Portfolio will invest at least 60% of its total assets in
securities are higher-quality debt securities rated at the time of
purchase:

* at least A by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.,
* at least A2 by Moody's Investors Service, Inc., or
* with a comparable rating by another nationally recognized rating
agency.

The Portfolio may invest up to 40% of its total assets in
securities rated at the time of purchase:

* BBB and below by Standard & Poor's,
* Baa and below by Moody's Investors Service, Inc., or
* with a comparable rating by another nationally recognized rating
agency.

The Portfolio may invest up to 20% of its total assets in lower-
rated debt securities. These securities are sometimes referred to
as "junk bonds" and are rated at the time of purchase:

* below BBB by Standard & Poor's,
* below Baa by Moody's Investors Service, Inc., or
* with a comparable rating by another nationally recognized rating
agency.

Normally, the Portfolio expects to maintain a dollar-weighted
average effective maturity of three to 10 years.

The Portfolio seeks to achieve capital appreciation through
purchasing bonds that increase in market value. In addition, to a
limited extent, the Portfolio may seek capital appreciation by
using hedging techniques such as futures and options.

To a limited extent, the Portfolio may invest in foreign
securities.

The portfolio manager has wide flexibility to vary the allocation
among different types of debt securities based on his judgment of
which types of securities will outperform the others. In
determining whether to buy or sell securities, the portfolio
manager evaluates relative values of the various types of
securities in which the Fund can invest (e.g., the relative value
of corporate debt securities versus mortgage-backed securities
under prevailing market conditions), relative values of various
rating categories (e.g., relative values of higher-rated
securities versus lower-rated securities under prevailing market
conditions), and individual issuer characteristics. The portfolio
manager may be required to sell portfolio investments to fund
redemptions.

PRINCIPAL INVESTMENT RISKS The primary risks of investing in the
Fund are described below. These risks could cause you to lose
money by investing in the Fund.

The price of the Fund's shares-its net asset value per share
(NAV)-can fluctuate daily in response to changes in the market
value of the bonds it owns.

Market risk is the risk that the price of a security held by the
Portfolio will fall due to changing market, economic, or political
conditions. Market risk includes interest rate risk. Interest
rate risk is the risk of a change in the price of a bond when
interest rates increase or decrease. In general, if interest
rates rise, bond prices fall; and if interest rates fall, bond
prices rise. Changes in the values of bonds usually will not
affect the amount of income the Fund receives from them but will
affect the value of the Fund's shares. Interest rate risk is
generally greater for bonds having longer maturities.

Structure risk is the risk that an event will occur (such as a
security being prepaid or called) that alters the security's cash
flows. Prepayment risk is a particular type of structure risk
that is present in the Fund because of its investments in
mortgage-backed securities. Prepayment risk is the possibility
that, as interest rates fall, homeowners are more likely to
refinance their home mortgages. When mortgages are refinanced,
the principal on mortgage-backed securities is paid earlier than
expected. In an environment of declining interest rates,
mortgage-backed securities may offer less potential for gain than
other debt securities. During periods of rising interest rates,
mortgage-backed securities have a high risk of declining in price
because the declining prepayment rates effectively increase the
maturity of the securities. In addition, the potential impact of
prepayment on the price of a mortgage-backed security may be
difficult to predict and result in greater volatility.

Because the Portfolio may invest in debt securities issued by
private entities, including corporate bonds and privately issued
mortgage-backed and asset-backed securities, the Fund is subject
to issuer risk. Issuer risk is the possibility that changes in
the financial condition of the issuer of a security, changes in
general economic conditions, or changes in economic conditions
that affect the issuer may impact the issuer's ability to make
timely payments of interest or principal. This could result in
decreases in the price of the security.

Lower-rated debt securities are sometimes referred to as "junk
bonds." Lower-rated debt securities involve greater risk of loss
due to issuer risk and are less liquid, especially during periods
of economic uncertainty or change, than higher-quality debt
securities. Medium-quality debt securities (securities rated BBB
or Baa by S&P or Moody's), although considered investment grade,
may have some speculative characteristics.

Because the Fund seeks to achieve capital appreciation, you could
receive capital gains distributions. (See "Tax Consequences.")

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Intermediate Bond Fund if you:
* are looking for a higher level of return potential than
generally offered by short-term money market securities in
exchange for an increased level of risk
* want a mix of government bonds, corporate bonds, and asset-
backed securities that the portfolio manager believes offers a
balance of current income and total return
* are a long-term investor looking to diversify your investment
portfolio by investing in fixed-income securities

Intermediate Bond Fund is not appropriate for investors who:
* want to avoid volatility or possible losses
* are not interested in generating taxable current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS

YEAR-BY-YEAR TOTAL RETURNS
15% 15.10% 16.84%
13%
11% 12.60%
9% 9.17% 9.29%
7% 7.09% 7.69%
5% 6.42%
3% 4.52%
0%
- -3% -2.55%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
[/bar chart]
[ ] Intermediate Bond Fund

The Fund's year-to-date total return through Sept. 30, 1999, was
1.28%.
For period shown on the chart above:

Best quarter: 2nd quarter 1989, +7.32%
Worst quarter: 1st quarter 1994, -2.19%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the Lehman
Brothers Intermediate Government/Corporate Bond Index. We show
returns for calendar years to be consistent with the way other
mutual funds report performance in their prospectuses. This
provides an indication of the risks of investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending Dec. 31, 1998
1 yr 5 yr 10 yr
---------------------------
Intermediate Bond Fund 6.42% 6.72% 8.49%
Lehman Brothers Inter-
mediate Government/
Corporate Bond Index* 8.44% 6.60% 8.52%

*The Lehman Brothers Intermediate Government/Corporate Bond Index
is an unmanaged group of securities that differs from the Fund's
composition; it is not available for direct investment.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.50%
Distribution (12b-1) None
Other expenses 0.22%
Total annual fund operating expenses 0.72%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% total return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Intermediate Bond Fund $73 $229 $399 $891

<PAGE>

THE FUNDS
INCOME FUND

INVESTMENT GOAL Stein Roe Income Fund seeks its total return by
investing for a high level of current income and, to a lesser
extent, capital appreciation.

PRINCIPAL INVESTMENT STRATEGY Income Fund invests all of its
assets in SR&F Income Portfolio as part of a master fund/feeder
fund structure. The Portfolio invests primarily in:

* debt securities issued by the U.S. government; these include
U.S. Treasury securities and agency securities; agency
securities include certain mortgage-backed securities, which
represent interests in pools of mortgages,
* debt securities of U.S. corporations,
* mortgage-backed securities and asset-backed securities issued by
private (non-governmental) entities, and
* dollar-denominated debt securities issued by foreign governments
and corporations.

At least 60% of total assets are medium- or higher-quality
securities rated at the time of purchase:

* at least BBB by Standard & Poor's,
* at least Baa by Moody's Investors Service, Inc., or
* with a comparable rating by another nationally recognized rating
agency.

The Portfolio may invest up to 40% of its total assets in lower-
rated or unrated debt securities. These securities are sometimes
referred to as "junk bonds" and are rated at the time of purchase:

* below BBB by Standard & Poor's,
* below Baa by Moody's Investors Service, Inc., or
* with a comparable rating by another nationally recognized rating
agency.

PRINCIPAL INVESTMENT RISKS The primary risks of investing in the
Fund are described below. These risks could cause you to lose
money by investing in the Fund.

The price of the Fund's shares-its net asset value per share
(NAV)-can fluctuate daily in response to changes in the market
value of the bonds it owns.

Market risk is the risk that the price of a security held by the
Portfolio will fall due to changing market, economic, or political
conditions. Market risk includes interest rate risk. Interest
rate risk is the risk of changes in the price of a bond when
interest rates increase or decrease. In general, if interest
rates rise, bond prices fall; and if interest rates fall, bond
prices rise. Changes in the values of bonds usually will not
affect the amount of income the Fund receives from them but will
affect the value of the Fund's shares. Interest rate risk is
generally greater for bonds having longer maturities.

Lower-rated debt securities are sometimes referred to as "junk
bonds." Lower-rated debt securities involve greater risk of loss
due to issuer risk and are less liquid, especially during periods
of economic uncertainty or change, than higher-quality debt.
Medium-quality debt securities (securities rated BBB or Baa by S&P
or Moody's), although considered investment grade, may have some
speculative characteristics.

An economic downturn could severely disrupt the high-yield market
and adversely affect the value of outstanding bonds and the
ability of the issuers to repay principal and interest. In
addition, lower-quality bonds are less sensitive to interest rate
changes than higher-quality instruments and generally are more
sensitive to adverse economic changes or individual corporate
developments. During a period of adverse economic changes,
including a period of rising interest rates, issuers of such bonds
may experience difficulty in servicing their principal and
interest payment obligations.

Because the Fund seeks to achieve capital appreciation, you could
receive capital gains distributions. (See "Tax Consequences.")

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Income Fund if you:
* want the higher return and income potential offered by high-
yield bonds, but want to balance their greater risk with a
substantial portion of the Fund invested in investment-grade
bonds
* want a balance between return potential and capital preservation
* are a long-term investor looking to diversify your portfolio by
investing in fixed-income securities

Income Fund is not appropriate for investors who:
* are saving for a short-term investment
* want to avoid volatility or possible losses
* are not interested in generating taxable current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
20%
15% 17.18% 19.74%
10% 13.38%
5% 7.14% 6.08% 9.11% 9.58%
0% 4.82% 4.00%
- -5% -3.83%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
[/bar chart]
[ ] Income Fund
The Fund's year-to-date total return through Sept. 30, 1999, was
0.37%.
For period shown on the chart above:
Best quarter: 2nd quarter 1995, +6.52%
Worst quarter: 1st quarter 1994, -3.18%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the Lehman
Brothers Intermediate Corporate Bond Index. We show returns for
calendar years to be consistent with the way other mutual funds
report performance in their prospectuses. This provides an
indication of the risks of investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending Dec. 31, 1998
1 yr 5 yr 10 yr
-----------------------------
Income Fund 4.00% 6.59% 8.53%
Lehman Brothers Intermediate
Corporate Bond Index* 8.29% 7.16% 9.19%

*The Lehman Brothers Intermediate Corporate Bond Index is an
unmanaged group of securities that differs from the Fund's
composition; it is not available for direct investment.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.60%
Distribution (12b-1) fees None
Other expenses 0.24%
Total annual fund operating expenses 0.84%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% total return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Income Fund $85 $267 $463 $1,032

<PAGE>

THE FUNDS
HIGH YIELD FUND

INVESTMENT GOAL Stein Roe High Yield Fund seeks its total return
by investing for a high level of current income and capital
appreciation.

PRINCIPAL INVESTMENT STRATEGY High Yield Fund invests all of its
assets in SR&F High Yield Portfolio as part of a master
fund/feeder fund structure. The Portfolio invests at least 65% of
total assets in high-yield, high-risk debt securities. These
securities are rated at the time of purchase:

* below BBB by Standard & Poor's,
* below Baa by Moody's Investors Service, Inc.,
* with a comparable rating by another nationally recognized rating
agency, or
* unrated securities that Stein Roe believes to be of comparable
quality.

The Portfolio may invest in any type of debt securities, including
corporate bonds and mortgage-backed and asset-backed securities.

In determining whether to buy or sell securities, the portfolio
manager evaluates relative values of the various types of
securities in which the Fund can invest (e.g., the relative value
of corporate debt securities versus mortgage-backed securities
under prevailing market conditions), relative values of various
rating categories (e.g., relative values of higher-rated
securities versus lower-rated securities under prevailing market
conditions), and individual issuer characteristics. The portfolio
manager may be required to sell portfolio investments to fund
redemptions. The Portfolio may invest in securities of any
maturity.

PRINCIPAL INVESTMENT RISKS The primary risks of investing in the
Fund are described below. These risks could cause you to lose
money by investing in the Fund.

The price of the Fund's shares-its net asset value per share
(NAV)-can fluctuate daily in response to changes in the market
value of the bonds it owns.

Market risk is the risk that the price of a security held by the
Portfolio will fall due to changing market, economic, or political
conditions, or due to the financial condition of the issuer of the
security. Market risk includes interest rate risk. Interest rate
risk is the risk of change in the price of a bond when interest
rates change. In general, if interest rates rise, bond prices
fall; and if interest rates fall, bond prices rise. Changes in
the values of bonds usually will not affect the amount of income
the Fund receives from them but will affect the value of the
Fund's shares. Interest rate risk is generally greater for bonds
with longer maturities.

High-yield, high-risk debt securities are sometimes referred to as
"junk bonds." High-yield, high-risk debt securities involve
greater risk of loss due to issuer risk and are less liquid,
especially during periods of economic uncertainty or change, than
higher-quality debt securities.

Because the Fund seeks to achieve capital appreciation, you could
receive capital gains distributions. (See "Tax Consequences.")

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in High Yield Fund if you:
* want the high return potential associated with investing in
lower-rated bonds and can tolerate the high level of risk
associated with such securities
* are a long-term investor looking to diversify your investment
portfolio with high-yield, high-risk fixed-income securities

High Yield Fund is not appropriate for investors who:
* are saving for a short-term investment
* want a relatively low-risk fixed-income investment
* want to avoid volatility or possible losses
* are not interested in generating taxable current income

FUND PERFORMANCE The following charts show the Fund's
performance for calendar years through Dec. 31, 1998. The returns
include the reinvestment of dividends and distributions. As with
all mutual funds, past performance is no guarantee of future
results.

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
15% 15.85%
10%
5%
0% 4.32%
1997 1998
[/bar chart]
[ ] High Yield Fund

The Fund's year-to-date total return through Sept. 30, 1999, was
3.79%.
For period shown on the chart above:

Best quarter: 2nd quarter 1997, +6.38%
Worst quarter: 3rd quarter 1998, -6.38%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the Merrill
Lynch High Yield Master II Index. We show returns for calendar
years to be consistent with the way other mutual funds report
performance in their prospectuses. This provides an indication of
the risks of investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending Dec. 31, 1998
1 yr Since Inception
(Nov. 1, 1996)
-----------------------------
High Yield Fund 4.32% 10.50%
Merrill Lynch High
Yield Master II Index* 3.66% 8.87%

*The Merrill Lynch High Yield Master II Index is an unmanaged
group of securities that differs from the Fund's composition; it
is not available for direct investment.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.65%
Distribution (12b-1) fees None
Other expenses 0.57%
Total annual fund operating expenses (d) 1.22%
Expense reimbursement (0.22%)
Net expenses 1.00%

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Annual fund operating expenses consist of Fund expenses plus
the Fund's share of the expenses of the Portfolio. Fund
expenses include management fees and administrative costs such
as furnishing the Fund with offices and providing tax and
compliance services.
(c) Management fees include both the management fee and the
administrative fee charged to the Fund.
(d) Stein Roe will reimburse the Fund if its annual ordinary
operating expenses exceed 1% of average daily net assets.
This commitment expires on Oct. 31, 2000. After
reimbursement, management fees will be 0.12%. A reimbursement
lowers the expense ratio and increases overall return to
investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% total return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality fund
returns and other expenses change. This example reflects expenses
of both the Fund and the Portfolio. Expense reimbursements are in
effect for the first year in the periods below. Expenses based on
these assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
High Yield Fund $102 $365 $649 $1,458

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights tables explain the Funds' financial
performance. Consistent with other mutual funds, we show
information for the last five fiscal years or for the period of a
Fund's operations (if shorter). Each Fund's fiscal year runs from
July 1 to June 30. The total returns in the tables represent the
return that investors earned assuming that they reinvested all
dividends and distributions. Certain information in the tables
reflects the financial results for a single Fund share. Ernst &
Young LLP, independent auditors, audits this information and
issues a report that appears in the Funds' annual report along
with the financial statements. To request the annual report,
please call 800-338-2550.

INTERMEDIATE BOND FUND
PER SHARE DATA
<TABLE>
<CAPTION>
For years ending June 30,
1999 1998 1997 1996 1995
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 8.97 $ 8.74 $ 8.58 $ 8.67 $ 8.44
Income from investment operations
Net investment income .56 .58 .60 .59 .58
Net gains (losses) on securities
(both realized and unrealized) (.33) .23 .17 (.10) .23
Total income from investment
operations .23 .81 .77 .49 .81
Less distributions
Dividends (from net investment
income) (.57) (.58) (.61) (.58) (.58)
Net asset value, end of period $ 8.63 $ 8.97 $ 8.74 $ 8.58 $ 8.67
Total return (a) 2.60% 9.51% 9.31% 5.76% 10.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $431,123 $437,456 $328,784 $298,112 $301,733
Ratio of net expenses to average
net assets(b) 0.72% 0.72% 0.73% 0.70% 0.70%
Ratio of net investment income
to average net assets(a) 6.31% 6.51% 6.97% 6.79% 6.94%

Portfolio turnover rate (c) 253% 138%(c) 210% 202% 162%

</TABLE>

<PAGE>

INCOME FUND
PER SHARE DATA
<TABLE>
<CAPTION>
For years ending June 30,
1999 1998 1997 1996 1995
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 10.03 $ 9.88 $ 9.63 $ 9.79 $ 9.36
Income from investment operations
Net investment income .67 .69 .70 .71 .71
Net gains (losses) on securities
(both realized and unrealized) (.62) .15 .24 (.16) .43
Total income from investment
operations .05 .84 .95 .55 1.14
Less distributions
Dividends (from net investment
income) (.67) (.69) (.70) (.71) (.71)
Distributions (from capital gains)
Total distributions (.67) (.69) (.70) (.71) (.71)
Net asset value, end of period $ 9.41 $ 10.03 $ 9.88 $ 9.63 $ 9.79
Total return (a) .52% 8.72% 10.34% 5.70% 12.79%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $294,640 $448,403 $375,272 $309,564 $174,327
Ratio of net expenses to average
net assets(b) 0.84% 0.83% 0.84% 0.82% 0.82%
Ratio of net investment income
to average net assets(a) 6.91% 6.89% 7.26% 7.26% 7.55%

Portfolio turnover rate (c) 203% 59%(c) 138% 135% 64%

</TABLE>

<PAGE>

HIGH YIELD FUND
PER SHARE DATA
<TABLE>
<CAPTION>
For years ending Period ending
June 30, June 30,
1999 1998 1997(d)
-----------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 11.00 $ 10.54 $ 10.00
Income from investment operations
Net investment income .85 .85 .52
Net gains on securities (both realized and unrealized) (.53) .61 .54
Total income from investment operations .32 1.46 1.06
Less distributions
Dividends (from net investment income) (.85) (.85) (.52)
Distributions (from capital gains) (.32) (.15) -
Total distributions (1.17) (1.00) (.52)
Net asset value, end of period $ 10.15 $ 11.00 $ 10.54
Total return (a) 3.50% 14.38% 10.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $32,766 $ 41,471 $ 13,482
Ratio of net expenses to average net assets (b) 1.00% 1.00% 1.00%(e)
Ratio of net investment income to average net assets (a) 8.23% 7.79% 8.05%(e)

Portfolio turnover rate (c) 296% 426% 168%

</TABLE>

(a) Computed with the effect of Stein Roe's expense reimbursement.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement of expenses by Stein Roe, this ratio would have
been 0.75%, 0.75% and 0.71% for the years ended June 30, 1997,
1996 and 1995, respectively, for Intermediate Bond Fund;
0.85%, 0.88% and 0.85% for the years ended June 30, 1997, 1996
and 1995, respectively, for Income Fund; and 1.22% for the
year ended June 30, 1999, 1.32% for the year ended June 30,
1998, and 2.29% for the period ended June 30, 1997, for High
Yield Fund.

(c) For fiscal years from 1995 through 1998, this represents
portfolio turnover of Intermediate Bond Fund and Income Fund
prior to commencement of operations of the Portfolios. For
the period from the commencement of operations of the
Portfolios, February 2, 1998, to June 30, 1998, the portfolio
turnover for Intermediate Bond Portfolio and Income Portfolio
was 86% and 77%. For 1999, this represents the portfolio
turnover rate for the Portfolios.

(d) From commencement of operations on Nov. 1, 1996, for High
Yield Fund.
(e) These percentages are for periods of less than one year. They
have been converted to an annual basis making it easier to
compare to complete years.

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. Your purchases are made at the NAV next
determined after the Fund receives your check, wire transfer or
electronic transfer. If a Fund receives your check, wire transfer
or electronic transfer after the close of regular trading on the
New York Stock Exchange (NYSE)-normally 3 p.m. Central time-your
purchase is effective on the next business day.

Purchases through Third Parties

If you purchase Fund shares through certain broker-dealers, banks
or other intermediaries (intermediaries), they may charge a fee
for their services. They may also place limits on your ability to
use services the Funds offer. There are no charges or limitations
if you purchase shares directly from a Fund, except those fees
described in this prospectus.

If an intermediary is an agent or designee of the Funds, orders
are processed at the NAV next calculated after the intermediary
receives the order. The intermediary must segregate any orders it
receives after the close of regular trading on the NYSE and
transmit those orders separately for execution at the NAV next
determined.

Conditions of Purchase

An order to purchase Fund shares is not binding unless and until
an authorized officer, agent or designee of the Fund accepts it.
Once we accept your purchase order, you may not cancel or revoke
it; however, you may redeem your shares. A Fund may reject any
purchase order if it determines that the order is not in the best
interests of the Fund and its investors. A Fund may waive or
lower its investment minimums for any reason. If you participate
in the Stein Roe Counselor [service mark] program or are a client
of Stein Roe Private Capital Management, the minimum initial
investment is determined by those programs.

*Maximum $500 contribution per calendar year per child.

Opening an Account

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY MAIL:
Complete the application.
Make check payable to Stein Roe Mutual Funds.

Mail application and check to:
SteinRoe Services Inc.
P.O. Box 8900
Boston, MA 02205

BY WIRE:
Mail your application to the address listed on
the left, then call 800-338-2550 to obtain an
account number. Include your Social Security
Number. To wire funds, use the instructions
below.

Adding to an Account BY MAIL:
Make check payable to Stein Roe Mutual Funds.
Be sure to write your account number on the
check.

Fill out investment slip (stub from your
statement or confirmation) or include a note
indicating the amount of your purchase, your
account number, and the name in which your
account is registered.

Mail check with investment slip or note to the
address above.

BY WIRE:
Wire funds to:
First National Bank of Boston
ABA: 011000390
Attn: SSI, Account No. 560-99696
Fund No. __; Stein Roe ____ Fund
Your name (exactly as in the registration).
Fund account number.

Fund Numbers:
35-Intermediate Bond Fund
09-Income Fund
15-High Yield Fund

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY ELECTRONIC FUNDS TRANSFER:
You cannot open a new account via electronic
transfer.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY;
Contact your financial professional.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY:
Contact your financial professional.

All checks must be made payable in U.S. dollars and drawn on U.S.
banks. Money orders and third-party checks will not be accepted.

DETERMINING SHARE PRICE (NAV) A Fund's share price is its NAV
next determined. NAV is the difference between the values of a
Fund's assets and liabilities divided by the number of shares
outstanding. We determine NAV at the close of regular trading on
the NYSE-normally 3 p.m. Central time. If you place an order
after that time, you receive the share price determined on the
next business day.

Securities for which market quotations are readily available at
the time of valuation are valued on that basis. We value long-
term straight-debt securities for which market quotations are not
readily available at fair value. Pricing services provide the
Funds with the value of the securities. Short-term debt
securities with remaining maturities of 60 days or less are valued
at their amortized cost, which does not take into account
unrealized gains or losses. The Board believes that the amortized
cost represents a fair value for such securities. Short-term debt
securities with remaining maturities of more than 60 days for
which market quotations are not readily available are valued by
use of a matrix prepared by Stein Roe based on quotations for
comparable securities. When the price of a security is not
available, including days when we determine that the sale or bid
price of the security does not reflect that security's market
value, we value the security at a fair value determined in good
faith under procedures established by the Board of Trustees.

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. A
Portfolio's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

SELLING SHARES You may sell your shares any day the Funds are
open for business. Please follow the instructions below.

BY EXCHANGE: Call 800-338-2550 to exchange any portion of your
Fund shares for shares in any other Stein Roe no-
load fund.

BY AUTOMATIC EXCHANGE: Fill out the appropriate areas of the
account application for this feature. Redeem a
fixed amount on a regular basis (not less than $50
per month; not more than $100,000) from a Fund for
investment in another Stein Roe no-load fund.

What You Need to Know When Selling Shares

A Fund redeems shares at the NAV next determined after an order
has been accepted. We mail proceeds within seven days after the
sale. The Funds normally pay wire redemption or electronic
transfer proceeds on the next business day.

Involuntary Redemption

Low Balance Fee

Due to the expense of maintaining accounts with low balances, if
your account balance falls below $2,000 ($800 for custodial
accounts), you will be charged a low balance fee of $5 per
quarter. The low balance fee does not apply to: (1) shareholders
whose accounts in the Stein Roe Funds total $50,000 or more; (2)
Stein Roe IRAs; (3) other Stein Roe prototype retirement plans;
(4) accounts with automatic investment plans (unless regular
investments have been discontinued); or (5) omnibus or nominee
accounts. A Fund can waive the fee, at its discretion, in the
event of significant market corrections.

An exchange is a redemption and purchase of shares for tax
purposes, and you may realize a gain or a loss when you exchange
Fund shares for shares of another fund.

We may change, suspend or eliminate the exchange service after
notification to you.

Generally, we limit you to four telephone exchanges "roundtrips"
per year. A roundtrip is an exchange out of a Fund into another
Stein Roe no-load fund and then back to that Fund.

Dividends and Distributions Income dividends are declared each
business day, paid monthly, and confirmed at least quarterly.
Each Fund distributes, at least once a year, virtually all of its
net realized capital gains.

A dividend from net investment income represents the income a Fund
earns from dividends and interest paid on its investments, after
payment of the Fund's expenses.

When a Fund makes a distribution of income or capital gains, the
distribution is automatically invested in additional shares of
that Fund unless you elect on the account application to have
distributions paid by check.

If you elect to receive distributions by check and a distribution
check is returned to a Fund as undeliverable, or if you do not
present a distribution check for payment within six months, we
will change the distribution option on your account and reinvest
the proceeds of the check in additional shares of that Fund. You
will not receive any interest on amounts represented by uncashed
distribution or redemption checks.

Tax Consequences

You are subject to federal income tax on both dividends and
capital gains distributions whether you elect to receive them in
cash or reinvest them in additional Fund shares. If a Fund
declares a distribution in December, but does not pay it until
after December 31, you will be taxed as if the distribution were
paid in December. Stein Roe will process your distributions and
send you a statement for tax purposes each year showing the source
of distributions for the preceding year.

In addition to the dividends and capital gains distributions made
by a Fund, you may realize a capital gain or loss when selling and
exchanging Fund shares. Such transactions may be subject to
federal income tax.

<PAGE>

OTHER INVESTMENTS AND RISKS

The first portion of this prospectus describes each Fund's
principal investment strategy and principal investment risks. In
seeking to meet its investment goals, a Portfolio also may invest
in other securities and use other investment techniques. A
Portfolio may elect not to buy any of these other securities or
use any of these other investment techniques. A Fund may not
always achieve its investment goal.

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about a Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in a Fund or could cause the
Fund's total return or yield to decrease. The SAI also contains a
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change a Fund's investment objective
without shareholder approval.

HEDGING STRATEGIES Intermediate Bond Portfolio may enter into a
number of hedging strategies, including those that employ futures
and options, to gain or reduce exposure to particular securities
or markets. These strategies, which are commonly referred to as
derivatives, involve the use of financial instruments whose values
depend on, or are derived from, the value of an underlying
security or an index. The Portfolio may use these strategies to
adjust its sensitivity to changes in interest rates or for other
hedging purposes (attempting to offset a potential loss in one
position by establishing an interest in an opposite position).
Derivative strategies involve the risk that they may exaggerate a
loss, potentially losing more money than the actual cost of the
derivative, or limit a potential gain. Also, with some derivative
strategies there is the risk that the other party to the
transaction may fail to honor its contract terms, causing a loss
to the Portfolio.

Mortgage-Backed Securities and Asset-Backed Securities Each
Portfolio may invest in mortgage-backed securities, which are
securities that represent ownership interests in large,
diversified pools of mortgage loans. Sponsors pool together
mortgages of similar rates and terms and offer them as a security
to investors.

Most mortgage securities are pooled together and structured as
pass-throughs. Monthly payments of principal and interest from
the underlying mortgage loans backing the pool are collected by a
service and "passed through" regularly to the investor. Pass-
throughs can have a fixed or an adjustable rate. The majority of
pass-through securities are issued by three agencies: Ginnie Mae,
Fannie Mae, and Freddie Mac.

Commercial mortgage-backed securities are secured by loans to
commercial properties such as office buildings, multi-family
apartment buildings, and shopping centers. These loans usually
contain prepayment penalties that provide protection from
refinancing in a declining interest rate environment.

Real estate mortgage investment conduits (REMICs) are multiclass
securities that qualify for special tax treatment under the
Internal Revenue Code. REMICs invest in certain mortgages that
are secured principally by interests in real property such as
single family homes.

Asset-backed securities are securities backed by various types of
loans such as credit card, auto, and home-equity loans. The
Portfolios generally invest in "mortgage-related" asset-backed
securities, which are backed by residential first and second lien
home equity, home improvement, and manufactured housing loans.

WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS When-issued
securities and forward commitments are securities that are
purchased prior to the date they are actually issued or delivered.
These securities involve the risk that they may fall in value by
the time they are actually issued or that the other party may fail
to honor the contract terms.

ZERO COUPON SECURITIES Intermediate Bond Portfolio and High
Yield Portfolio may invest in zero coupon securities. These
securities do not pay interest in cash on a current basis, but
instead accrue over the life of the bond. As a result, these
securities are issued at a deep discount. The value of these
securities may fluctuate more than similar securities that pay
interest periodically. Although these securities pay no interest
to holders prior to maturity, interest on these securities is
reported as income to the Fund and distributed to its
shareholders.

PIK BONDS High Yield Portfolio may invest in payable-in-kind
bonds (PIK bonds) which are bonds that pay interest in the form of
additional securities. These bonds are subject to greater price
volatility than bonds that pay cash interest on a current basis.

ILLIQUID INVESTMENTS Each Portfolio may invest up to 15% of its
net assets in illiquid investments. An illiquid investment is a
security or other position that cannot be disposed of quickly in
the normal course of business. For example, some securities are
not registered under U.S. securities laws and cannot be sold to
the U.S. public because of SEC regulations (these are known as
"restricted securities"). Under procedures adopted by the Funds'
Trustees, certain restricted securities may be deemed liquid and
will not be counted toward this 15% limit.

PORTFOLIO TURNOVER There are no limits on turnover. Turnover
may vary significantly from year to year. Portfolio turnover
typically produces capital gains or losses resulting in tax
consequences for Fund investors. It also increases transaction
expenses, which reduce a Fund's return.

TEMPORARY DEFENSIVE POSITIONS When Stein Roe believes that a
temporary defensive position is necessary, a Portfolio may invest,
without limit, in high-quality debt securities or hold assets in
cash and cash equivalents. Stein Roe is not required to take a
temporary defensive position, and market conditions may prevent
such an action. A Fund may not achieve its investment objective
if it or its Portfolio takes a temporary defensive position.

INTERFUND LENDING PROGRAM The Funds and Portfolios may lend
money to and borrow money from other funds advised by Stein Roe.
They will do so when Stein Roe believes such lending or borrowing
is necessary and appropriate. Borrowing costs will be the same as
or lower than the costs of a bank loan.

<PAGE>

THE FUNDS' MANAGEMENT

INVESTMENT ADVISER Stein Roe & Farnham Incorporated (Stein Roe),
One South Wacker Drive, Chicago, IL 60606, manages the day-to-day
operations of the Funds and Portfolios. Stein Roe (and its
predecessor) has advised and managed mutual funds since 1949. For
the fiscal year ended June 30, 1999, the Funds paid to Stein Roe
the following aggregate fees (as a percent of average net assets):

Fund Fee
---------------------- ------
Intermediate Bond Fund 0.50%
Income Fund 0.60%
High Yield Fund 0.34%

Stein Roe's mutual funds and institutional investment advisory
businesses are part of a larger business unit known as Liberty
Funds Group (LFG) that includes several separate legal entities.
LFG includes certain affiliates of Stein Roe, including Colonial
Management Associates, Inc. (Colonial). The LFG business unit is
managed by a single management team. Colonial and other LFG
entities also share personnel, facilities, and systems with Stein
Roe that may be used in providing administrative or operational
services to the Funds. Colonial is a registered investment
adviser. Stein Roe also has a wealth management business that is
not part of LFG and is managed by a different team. Stein Roe
and the other entities that make up LFG are subsidiaries of
Liberty Financial Companies, Inc.

PORTFOLIO MANAGERS

Intermediate Bond Fund

Michael T. Kennedy has been portfolio manager of Intermediate Bond
Portfolio since its inception in 1998 and had been portfolio
manager of Intermediate Bond Fund from 1988 to January 1998. He
joined Stein Roe in 1987 and is a senior vice president. A
chartered financial analyst and a chartered investment counselor,
he received his B.S. degree from Marquette University and his M.M.
degree from Northwestern University. Mr. Kennedy managed $432
million in mutual fund net assets as of June 30, 1999.

Income Fund and High Yield Fund

Stephen F. Lockman has been manager of High Yield Portfolio since
1997 and of Income Portfolio since its inception in 1998. He was
portfolio manager of Income Fund from 1997 to January 1988,
associate manager of Income Fund from 1995 to 1997, and associate
manager of High Yield Portfolio from November 1996 to February
1997. Mr. Lockman was a senior research analyst for Stein Roe's
fixed income department from 1994, when he joined SteinRoe, to
1997. He served as portfolio manager for the Illinois State Board
of Investment from 1987 to 1994. A chartered financial analyst,
Mr. Lockman earned a bachelor's degree from the University of
Illinois and a master's degree from DePaul University. As of June
30, 1999, Mr. Lockman managed $383 million in mutual fund net
assets.

MASTER/FEEDER FUND STRUCTURE Unlike mutual funds that directly
acquire and manage their own portfolios of securities, the Funds
are "feeder" funds in a "master/feeder" structure. This means
that the Fund invests its assets in a larger "master" portfolio of
securities (the Fund's corresponding Portfolio) that has an
investment objective and policies substantially identical to those
of the Fund. The investment performance of a Fund depends upon
the investment performance of its Portfolio. If the investment
policies of a Fund and its Portfolio became inconsistent, the
Board of Trustees of the Fund can decide what actions to take.
Actions the Board of Trustees may recommend include withdrawal of
the Fund's assets from the Portfolio. For more information on the
master/feeder fund structure, see the SAI.

YEAR 2000 READINESS Like other investment companies, financial
and business organizations and individuals around the world, the
Funds could be adversely affected if the computer systems used by
Stein Roe, other service providers and the issuers in which the
Portfolios invest do not properly process and calculate date-
related information and data from and after Jan. 1, 2000. This is
commonly known as the "Year 2000 problem." The Funds' service
providers are taking steps that they believe are reasonably
designed to address the Year 2000 problem, including communicating
with vendors who furnish services, software and systems to the
Funds to provide that date-related information and data can be
properly processed after Jan. 1, 2000. Many Fund service
providers and vendors, including the Funds' service providers, are
in the process of making Year 2000 modifications to their software
and systems and believe that such modifications will be completed
on a timely basis prior to Jan. 1, 2000. In addition, Year 2000
readiness is one of the factors considered by Stein Roe in its
ongoing assessment of issuers in which the Portfolios invest, to
the extent that information is readily available. However, no
assurances can be given that the Funds will not be adversely
affected by these matters.

<PAGE>

FOR MORE INFORMATION

You can obtain more information about the Funds' investments in
their semiannual and annual reports to investors. These reports
discuss the market conditions and investment strategies that
affected the Funds' performance over the past six months and year.

You may wish to read the Funds' SAI for more information. The SAI
is incorporated into this prospectus by reference, which means
that it is considered to be part of this prospectus and you are
deemed to have been told of its contents.

To obtain free copies of the Funds' semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Funds, write or call:

Stein Roe Mutual Funds
One South Wacker Drive
Suite 3200
Chicago, IL 60606
800-338-2550
www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Income Trust: 811-4552

LIBERTY FUNDS DISTRIBUTOR, INC.

- ---------------------------------------------------------

[STEIN ROE MUTUAL FUNDS LOGO]

Stein Roe Cash Reserves Fund

Defined Contribution Plans Prospectus
Nov. 1, 1999

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Master/Feeder Fund Structure
Year 2000 Readiness

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND

INVESTMENT GOAL Stein Roe Cash Reserves Fund seeks maximum
current income, consistent with capital preservation and the
maintenance of liquidity.

Under normal market conditions the Portfolio invests more than 25%
of its total assets in securities of issuers in the financial
services industry, including banks and financial companies such as
brokerage companies.

The Fund seeks to preserve the value of your investment at $1 per
share.

PRINCIPAL INVESTMENT RISKS The primary risks of investing in the
Fund are described below. These risks could cause you to lose
money by investing in the Fund.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

Cash Reserves Fund is not appropriate for investors who:
* want high return potential
* don't want current income

Year-by-Year Total Returns

YEAR-BY-YEAR TOTAL RETURNS
8% 8.86%
7% 7.78%
6%
5% 5.71% 5.44% 5.01% 5.01%
4% 4.86%
3% 3.42% 3.71%
2% 2.58%
0%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
[ ] Cash Reserves Fund

The Fund's year-to-date total return through Sept. 30, 1999, was
3.33%.
For period shown on the chart above:

Best quarter: 2nd quarter 1989, +2.28%
Worst quarter: 2nd quarter 1993, +0.63%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending Dec. 31, 1998
1 yr 5 yr 10 yr
-------------------------------
Cash Reserves Fund 5.01% 4.80% 5.22%

For current seven-day yield information on the yield, please call
800-338-2550.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares. However, you pay
various other indirect expenses because the Fund or the Portfolio
pays fees and other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees(b) 0.49%
Distribution (12b-1) fees None
Other expenses 0.21%
Total annual fund operating expenses 0.70%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% total return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Cash Reserves Fund $72 $224 $390 $871

<PAGE>

FINANCIAL HIGHLIGHTS

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. All shares must be purchased through your
employer's defined contribution plan. For more information about
how to purchase Fund shares through your employer or limitations
on the amount that may be purchased, please consult your employer.
Shares are sold to eligible defined contribution plans at the NAV
next determined after the Fund receives your payment. Each
purchase of shares through a broker-dealer, bank or other
intermediary that is an authorized agent or designee of the Fund
for the receipt of orders is made at the NAV next determined after
receipt of the order by the intermediary. The intermediary must
segregate any orders it receives after the close of regular
trading on the New York Stock Exchange (NYSE) and transmit those
orders separately for execution at the NAV next determined.

The Portfolio's foreign securities may trade on days when the NYSE
is closed. We will not price shares on days that the NYSE is
closed for trading and you may not purchase or redeem shares.

SELLING SHARES Subject to restrictions imposed by your
employer's plan, Fund shares may be redeemed any day the NYSE is
open. For more information about how to redeem your Fund shares
through your employer's plan, including any charges that may be
imposed by the plan, please consult with your employer. The Fund
redeems shares at the NAV next determined after an order has been
accepted.

EXCHANGING SHARES Subject to your plan's restrictions, you may
redeem all or any portion of your Fund shares and use the proceeds
to purchase shares of any other no-load Stein Roe Fund available
through your employer's defined contribution plan. (An exchange
is commonly referred to as a "transfer.") Please be sure to read
the prospectus of the fund you wish to exchange into before using
the Exchange Privilege. Contact your plan administrator for
instructions on how to exchange your shares or to obtain
prospectuses of other no-load Stein Roe Funds available through
your plan. We may change, suspend or eliminate the exchange
service after notification to you. An exchange is a redemption
and purchase of shares for tax purposes, and you may realize a
gain or a loss when you exchange Fund shares for shares of another
fund.

The terms of your plan will govern how you may receive
distributions from the Fund. Generally, dividend and capital
gains distributions will be reinvested in additional Fund shares.

Tax Consequences

The Fund intends to qualify as a "regulated investment company"
for federal income tax purposes and to meet all other requirements
that are necessary for it to be relieved of federal taxes on
income and gain it distributes. The Fund will distribute
substantially all of its ordinary income and net capital gains on
a current basis. Generally, Fund distributions are taxable as
ordinary income, except that any distributions of net long-term
capital gains will be taxed as such. However, distributions by
the Fund to employer-sponsored defined contribution plans that
qualify for tax-exempt treatment under federal income tax laws
will not be taxable. Special tax rules apply to investments
through such plans. You should consult your tax advisor to
determine the suitability of the Fund as an investment through
such a plan and the tax treatment of distributions (including
distributions of amounts attributable through an investment in the
Fund) from such a plan. This section is not intended to be a full
discussion of income tax laws and their effect on shareholders.

<PAGE>

OTHER INVESTMENTS AND RISKS

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe's mutual funds and institutional investment advisory
businesses are part of a larger business unit known as Liberty
Funds Group (LFG) that includes several separate legal entities.
LFG includes certain affiliates of Stein Roe, including Colonial
Management Associates, Inc. (Colonial). The LFG business unit is
managed by a single management team. Colonial and other LFG
entities also share personnel, facilities, and systems with Stein
Roe that may be used in providing administrative or operational
services to the Fund. Colonial is a registered investment
adviser. Stein Roe also has a wealth management business that is
not part of LFG and is managed by a different team. Stein Roe and
the other entities that make up LFG are subsidiaries of Liberty
Financial Companies, Inc.

<PAGE>

FOR MORE INFORMATION

You may wish to read the Fund's SAI for more information. The SAI
is incorporated into this prospectus by reference, which means
that it is considered to be part of this prospectus and you are
deemed to have been told of its contents. The Statement of
Additional Information contains information relating to other
series of Stein Roe Income Trust that may not be available as
investment vehicles for your defined contribution plan.

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One South Wacker Drive
Suite 3200
Chicago, IL 60606
800-338-2550
www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Income Trust: 811-4552

LIBERTY FUNDS DISTRIBUTOR, INC.

- ----------------------------------------------------------------

[STEIN ROE MUTUAL FUNDS LOGO]

Stein Roe Intermediate Bond Fund

Defined Contribution Plans Prospectus
Nov. 1, 1999

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

11 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure
Year 2000 Readiness