PUTNAM VARIABLE TRUST, 485BPOS, 1997-05-01

PUTNAM VARIABLE TRUST
485BPOS, 1997-05-01

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As filed with the Securities and Exchange Commission on
April 30, 1997

Registration No. 33-17486
811-5346
- -------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A
----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 14 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 15 / X /
(Check appropriate box or boxes) ----

---------------
PUTNAM VARIABLE TRUST
(Exact name of registrant as specified in charter)

One Post Office Square, Boston, Massachusetts 02109
(Address of principal executive offices)

Registrant's Telephone Number, including Area Code
(617) 292-1000
--------------------

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

----
/ X / immediately upon filing pursuant to paragraph (b)
- ----
----
/ / on (date) pursuant to paragraph (b)
- ----
----
/ / 60 days after filing pursuant to paragraph (a)(1)
- ----
----
/ / on (date) pursuant to paragraph (a)(1)
- ----
----
/ / 75 days after filing pursuant
to paragraph (a)(2)
- ----
----
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
- ----

If appropriate, check the following box:

----
/ / this post-effective amendment designates a new
- ---- effective date for a previously filed post-effective
amendment.
-----------

JOHN R. VERANI, Vice President
PUTNAM VARIABLE TRUST
One Post Office Square
Boston, Massachusetts 02109
(Name and address of agent for service)
---------------
Copy to:
JOHN W. GERSTMAYR, Esquire
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
-------------------

The Registrant has registered an indefinite number or
amount of securities under the Securities Act of 1933 pursuant to
Rule 24f-2. A Rule 24f-2 notice for the fiscal year ended December
31, 1996 is not required because, in accordance with
Instruction B.5 to Form 24F-2, the Registrant sold no shares
pursuant to Rule 24f-2 with respect to which fees are required to
be paid in such fiscal year.<PAGE>
PUTNAM VARIABLE TRUST

CROSS REFERENCE SHEET

(as required by Rule 481(a))

Part A

N-1A Item No. Location

1. Cover Page . . . . . . . . . . Cover page

2. Synopsis . . . . . . . . . . . Omitted

3. Condensed Financial Information . Financial highlights;
How performance is shown

4. General Description of Registrant . The Trust; Investment
objectives and policies;
Common investment
policies and techniques;
Organization and history

5. Management of the Fund. . . . . . How the Trust is
managed;
Organization
and history; About
Putnam Investments, Inc.

5A. Management's Discussion. . . . (Contained in the annual
of Fund Performance report of the
Registrant)

6. Capital Stock and Other
Securities . . . . . . . . . . Cover page; Sales and
redemptions; How a
fund values its
shares; How each
Fund makes
distributions to
shareholders; tax
information;
Organization and history

7. Purchase of Securities Being .
Offered .The Trust; Sales and
redemptions; How a
Fund values its
shares; Organization and
history

8. Redemption or Repurchase . . . Cover page; Sales and
redemptions; How a
Fund values its
shares; Organization and
history

9. Pending Legal Proceedings. . . Not applicable<PAGE>
Part B

N-1A Item No. Location

10. Cover Page . . . . . . . . . . Cover page

11. Table of Contents. . . . . . . Cover page

12. General Information and History . . Organization and history
(Part A)

13. Investment Objectives and
Policies . . . . . . . . . . . Investment objectives
and policies; Investment
restrictions; Portfolio
turnover

14. Management of the Registrant . Management

15. Control Persons and Principal. Management
Holders of Securities

16. Investment Advisory and Other. Management; Custodian;
Services Independent accountants
and financial statements

17. Brokerage Allocation . . . . . Management

18. Capital Stock and Other
Securities . . . . . . . . . . Management;
Determination of net
asset value; Suspension
of redemptions;
Shareholder liability

19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . Sales and redemptions
(Part A); Management;
Determination of net
asset value; Suspension
of redemptions

20. Tax Status . . . . . . . . . . How each Fund
makes . .
distributions to shareholders; tax information (Part A);
Taxes

21. Underwriter. . . . . . . . . . Management
<PAGE>
22. Calculation of Performance Data . How performance is shown
(Part A); Investment
performance of the Trust
(Standard performance
measures)

23. Financial Statements . . . . . . . Independent accountants
and financial statements

Part C

Information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C of the
Registration Statement.

<PAGE>

PUTNAM VARIABLE TRUST
PROSPECTUS -

APRIL 30 , 1997

Putnam Variable Trust (the "Trust") offers shares of beneficial
interest in separate investment portfolios (collectively, the
"funds") for purchase by separate accounts of various insurance
companies. The funds, which have different investment objectives
and policies, offered by this prospectus are: Putnam VT Asia
Pacific Growth Fund, Putnam VT Diversified Income Fund, Putnam VT
Global Asset Allocation Fund, Putnam VT Global Growth Fund,
Putnam VT Growth and Income Fund, Putnam VT High Yield Fund,
Putnam VT International Growth Fund, Putnam VT International
Growth and Income Fund, Putnam VT International New Opportunities
Fund, Putnam VT Money Market Fund, Putnam VT New Opportunities
Fund, Putnam VT New Value Fund, Putnam VT U.S. Government and
High Quality Bond Fund, Putnam VT Utilities Growth and Income
Fund, Putnam VT Vista Fund and Putnam VT Voyager Fund.

An investment in Putnam VT Money Market Fund is neither
insured nor guaranteed by the U.S. government. There can be no
assurance that Putnam VT Money Market Fund will be able to
maintain a stable net asset value of $1.00 per share.

Putnam VT High Yield Fund invests primarily in, and Putnam VT
Diversified Income Fund may invest significantly in, lower-rated
bonds, commonly known as "junk bonds." Investments of this type
are subject to a greater risk of loss of principal and non-
payment of interest. Investors should carefully assess the risks
associated with an investment in either fund.

This prospectus explains concisely what you should know before
investing in the Trust and should be read in conjunction with the
prospectus for the separate account of the variable annuity or
variable life insurance product that accompanies this prospectus.
Please read it carefully and keep it for future reference.
Investors can find more detailed information about the Trust in
the April 30 , 1997, statement of additional information
(the "SAI"), as amended from time to time. For a free copy of
the SAI, call Putnam Investor Services at 1-800-521-0538. The
SAI has been filed with the Securities and Exchange Commission
(the "Commission") and is incorporated into this
prospectus by reference. The Commission maintains a Web site
(http://www.sec.gov) that contains the SAI, material incorporated
by reference into this prospectus and the SAI, and other
information regarding registrants that file electronically with
the Commission.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

SHARES OF THE FUNDS ARE PRESENTLY AVAILABLE AND ARE BEING
MARKETED EXCLUSIVELY AS A POOLED FUNDING VEHICLE FOR VARIABLE
ANNUITY CONTRACT AND VARIABLE LIFE INSURANCE POLICY SEPARATE
ACCOUNTS OF VARIOUS INSURANCE COMPANIES.
<PAGE>

ABOUT THE TRUST

Financial highlights
.................................................................
Study this table to see, among other things, how the funds have
performed each year since their inception.

The Trust
.................................................................
This section explains the Trust's relationship to various
variable annuity and variable life insurance products and advises
prospective investors to read the prospectus issued by the
relevant insurance company for information about the annuity or
insurance product.

Investment objectives and policies of the funds
.................................................................
Each of the funds is managed according to its own specific
investment objective or objectives. Read this section to make
sure a fund's objectives are consistent with your own.

Common investment policies and techniques
.................................................................
Certain investment policies and techniques apply to two or more
of the funds. This section defines, describes, and explains
these policies and techniques.

How performance is shown
.................................................................
This section describes and defines the measures used to assess
fund performance. All data are based on past investment results
and do not predict future performance.

How the Trust is managed
.................................................................
Consult this section for information about the Trust's
management, allocation of its expenses, and how purchases and
sales of securities are made .

Organization and history
.................................................................
In this section, you will learn when the Trust was introduced,
how it is organized, how it may offer shares, and who its
Trustees are.
<PAGE>
ABOUT YOUR INVESTMENT

Sales and redemptions
.................................................................
This section describes the terms under which shares may be
purchased and redeemed by insurance company separate
accounts .

How a fund values its shares
.................................................................
This section explains how a fund determines the value of its
shares.

How a fund makes distributions to shareholders; tax
information
.................................................................
This section describes how fund dividends are paid to
various insurance separate accounts . It also discusses the
tax status of the payments and counsels you to seek specific
advice about your own situation.

Financial information
.................................................................
This section informs you that each year you will receive
semiannual and annual reports of the Trust.

ABOUT PUTNAM INVESTMENTS, INC.
.................................................................
Read this section to learn more about the companies that provide
marketing, investment management, and shareholder account
services to Putnam funds and their shareholders.

APPENDIX
Securities ratings
<PAGE>

About the Trust

FINANCIAL HIGHLIGHTS

The following tables present per share financial information for
the life of each fund. This information has been audited and
reported on by the independent accountants. The "Report of
independent accountants" and financial statements included in the
Trust's annual report to shareholders for the 1996 fiscal
year are incorporated by reference into this prospectus. The
Trust's annual report, which contains additional unaudited
performance information, is available without charge upon
request.

Financial information for Putnam VT International Growth Fund,
Putnam VT International Growth and Income Fund, Putnam VT
International New Opportunities Fund, Putnam VT New Value Fund
and Putnam VT Vista Fund is not included because these
funds had not commenced operations as of December 31 ,
1996.
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights

Investment
Operations Less Distributions:
Net
Realized and
In Excess of
Net Unrealized Total from From Net
From Net RealizedNet Realized
Period endedNet Asset Value, Investment Gain (Loss) on Investment
Investment Gain on Gain on
Beginning of PeriodIncome Investments operations Income Investments
Investments
<S> <C> <C> <C> <C>
<C> <C> <C>
Putnam VT Asia
Pacific Growth Fund
December 31, 1996 $10.23 $.05 $.88 $.93
$(.15) $- $-
December 31, 1995** 10.00 .06(a)(b).17 .2 - - -

Putnam VT Diversified
Income Fund
December 31, 1996 $11.03 $.80(a) $.11 $.91 $(.67)
$- $-
December 31, 1995 9.74 .71 1.09 1.80
(.51) - -
December 31, 1994 10.23 .61 (1.04) (.43)
(.06) - -
December 31, 1993*** 10.00 .06 .17 .23
-
- -

Putnam VT Global Asset
Allocation Fund
December 31, 1996 $16.15 $.43 $1.94 $2.37
$(.44) $(.83) $-
December 31, 1995 13.19 .47 2.74 3.21
(.25) - -
December 31, 1994 14.29 .35 (.71) (.36)
(.29) (.43) (.02)
December 31, 1993 12.92 .30 1.87 2.17
(.55) (.25) -
December 31, 1992 12.77 .35 .41 .76
(.42) (.19) -
December 31, 1991 11.28 .45 1.64 2.09
(.54) (.06) -
December 31, 1990 11.26 .54 (.52) .02
- - -
December 31, 1989 10.68 .56 1.10 1.66
(.88) (.15) -
December 31, 1988**** 10.00 .53(a) .15
.68 -
- -

<PAGE>
Putnam VT Global
Growth Fund
December 31, 1996 $15.18 $.17 $2.35 $2.52
$(.25) $(.57) $-
December 31, 1995 13.48 .20 1.85 2.05
(.11) (.24) -
December 31, 1994 13.68 .13 (.26) (.13)
(.05) (.02) -
December 31, 1993 10.48 .08 3.28 3.36
(.16) - -
December 31, 1992 10.61 .10 (.14) (.04)
(.09) - -
December 31, 1991 9.32 .11 1.28 1.39
(.10) - -
December 31, 1990***** 10.00 .11 (.79)
(.68) -
- -

Putnam VT Growth and
Income Fund
December 31, 1996 $21.47 $.65(a) $3.84 $4.49
$(.51) $(.89) $-
December 31, 1995 16.44 .53 5.31 5.84
(.51) (.30) -
December 31, 1994 17.38 .50 (.48) .02
(.38) (.58) -
December 31, 1993 15.93 .38 1.83 2.21
(.39) (.37) -
December 31, 1992 15.33 .39 1.04 1.43
(.42) (.41) -
December 31, 1991 13.51 .43 2.09 2.52
(.53) (.17) -
December 31, 1990 13.41 .55 (.29) .26
(.05) (.11) -
December 31, 1989 12.00 .45 2.04 2.49
(.60) (.48) -
December 31, 1988**** 10.00 .42(a) 1.58
2.00 -
- -

Putnam VT High
Yield Fund
December 31, 1996 $12.37 $1.18(a) $.32 $1.50
$(.91) $- $-
December 31, 1995 11.46 .91 1.05 1.96
(1.05) - -
December 31, 1994 12.53 1.05 (1.17) (.12)
(.79) (.14) (.02)
December 31, 1993 11.17 .73 1.37 2.10
(.74) - -
December 31, 1992 10.12 1.26 .59 1.85
(.80) - -
December 31, 1991 7.91 .85 2.47 3.32
(1.11) - -
December 31, 1990 9.15 1.30 (2.20) (.90)
(.34) - -
December 31, 1989 10.76 1.12 (1.37) (.25)
(1.36) - -
December 31, 1988**** 10.00 1.04(a)(b) (.28)
.76 -
- -

<PAGE>
Putnam VT Money
Market Fund
December 31, 19961.00 $.0497 $- $.0497 $(.0497)
$- $-
December 31, 1995 1.00 .0533 - .0533
(.0533) - -
December 31, 1994 1.00 .0377 - .0377
(.0377) - -
December 31, 1993 1.00 .0276 - .0276
(.0276) - -
December 31, 1992 1.00 .0352 - .0352
(.0352) - -
December 31, 1991 1.00 .0575 .0001 .0576
(.0575) (.0001) -
December 31, 1990 1.00 .0770 - .0770
(.0770) - -
December 31, 1989 1.00 .0859 - .0859
(.0859) - -
December 31, 1988**** 1.00 .0575
-.0575 (.0575)
- -

Putnam VT New
Opportunities Fund
December 31, 1996$15.63 $(.01) $1.60 $1.59
$- $- $-
December 31, 1995 10.82 - 4.84 4.84
- (.02) -
December 31, 1994****** 10.00 -(b) .82
.82 -
- -

Putnam VT U.S. Government
and High Quality Bond Fund
December 31, 1996 $13.74 $.81 $(.52) $.29
$(.82) $- $-
December 31, 1995 12.22 .81 1.56 2.37
(.85) - -
December 31, 1994 13.53 .81 (1.24) (.43)
(.66) (.22) -
December 31, 1993 12.85 .63 .78 1.41
(.61) (.12) -
December 31, 1992 12.57 .60 .28 .88
(.54) (.06) -
December 31, 1991 11.36 .56 1.31 1.87
(.66) - -
December 31, 1990 10.82 .71 .08 .79
(.22) (.03) -
December 31, 1989 10.28 .62 .78 1.40
(.79) (.07) -
December 31, 1988**** 10.00 .66(a) (.38)
.28 -
- -

Putnam VT Utilities
Growth and Income Fund
December 31, 1996 $13.28 $.54 $1.49 $2.03
$(.51) $- $-
December 31, 1995 10.68 .53 2.65 3.18
(.58) - -
December 31, 1994 12.00 .60 (1.44) (.84)
(.35) (.12) -
December 31, 1993 10.71 .30 1.13 1.43
(.12) (.02) -
December 31, 1992******* 10.00 .15(b) .56
.71 -
- -

Putnam VT Voyager Fund

December 31, 1996 $30.50 $.09 $3.75 $3.84
$(.13) $(1.68) $-
December 31, 1995 22.20 .10 8.76 8.86
(.07) (.49) -
December 31, 1994 22.41 .07 .14 .21
(.05) (.37) -
December 31, 1993 19.21 .04 3.50 3.54
(.07) (.27) -
December 31, 1992 17.94 .07 1.72 1.79
(.08) (.44) -
December 31, 1991 12.58 .11(a) 5.61 5.72
(.12) (.24) -
December 31, 1990 13.00 .18 (.45) (.27)
(.06) (.09) -
December 31, 1989 10.30 .12 3.20 3.32
(.16) (.46) -
December 31, 1988*** * 10.00 .13(a) .17
.30 -
- -

<PAGE>

Total Ratio of Net
Investment Ratio of
Investment
Net AssetReturn at Net Assets Expenses to
Income to Average
Return of Total Value, End Net Asset End of Period Average Net
Average Net Portfolio

Commission
Capital Distributions of Period Value(%)(c)(in thousands) Assets(%)(d)
Assets(%)Turnover(%)Rate
Paid(e)
<C> <C> <C> <C> <C> <C>
<C> <C> <C>

$- $(.15) $11.01 9.10 $130,5481.23 .84 66.10$.0197
- - 10.23 2.30* 25,045 .81(b)*.72(b)*67.72*

$- $(.67) $11.27 8.81 $494,811 .83
7.45 235.53
- (.51) 11.03 19.13 303,721 .85
7.85 297.17
- (.06) 9.74 (4.23) 215,935 .80
7.60 165.17
- - 10.23 2.30 * 80,449 .28 *
1.45* 40.83*

$- $(1.27) $17.25 15.62 $747,734 .83
3.08 165.03
$.0475
- (.25) 16.15 24.71 535,666 .84
3.31 150.88
- (.74) 13.19 (2.50) 414,223 .76
3.19 150.21
- (.80) 14.29 17.48 297,307 .72
3.28 192.48
- (.61) 12.92 6.29 134,667 .79
3.84 141.87
- (.60) 12.77 19.02 82,071 .87
4.55 77.31
- - 11.28 .18 51,792 .88
5.31 52.97
(.05) (1.08) 11.26 16.08 40,200 .88
6.16 95.97
- - 10.68 6.76 * 26,202 1.17 *
5.55* 183.11*

$- $(.82) $16.88 17.20 $1,344,887 .76
1.25 79.18 $.0318
- (.35) 15.18 15.67 831,593 .75 1.49 82.53
- (.07) 13.48 (.96) 669,821 .77 1.21 41.55
- (.16) 13.68 32.40 352,786 .75 1.38 47.00
- (.09) 10.48 (.36) 86,854 .85 1.82 59.68
- (.10) 10.61 15.01 40,183 .99 2.01 48.67
- - 9.32 (6.80) * 13,203 .99 * 2.35* 18.07*

<PAGE>
$- $(1.40) $24.56 21.92 $5,679,100 .54 2.90 39.57 $.0517
- (.81) 21.47 36.71 3,312,306 .57 3.34 50.87
- (.96) 16.44 .35 1,907,380 .62 3.64 46.43
- (.76) 17.38 14.27 1,407,382 .64 3.49 62.63
- (.83) 15.93 9.75 641,508 .69 3.79 39.58
- (.70) 15.33 19.05 325,861 .72 4.37 37.94
- (.16) 13.51 1.96 155,942 .75 5.02 49.39
- (1.08) 13.41 21.30 100,335 .74 5.73 73.40
- - 12.00 19.89 * 26,205 .92 * 4.08*
37.94*

$- $(.91) $12.96 12.81 $769,918 .76 9.57 62.72
- (1.05) 12.37 18.32 498,467 .79 9.42 69.78
- (.95) 11.46 (.94) 327,119 .74 9.79 62.09
- (.74) 12.53 19.57 291,737 .67 9.88 85.59
- (.80) 11.17 18.98 118,804 .71 11.53 84.24
- (1.11) 10.12 44.83 42,823 .92 12.64 104.62
- (.34) 7.91 (9.98) 18,915 .93 13.81 86.05
- (1.36) 9.15 (2.65) 27,511 .84 12.59 65.44
- - 10.76 7.56 * 19,506 .94(b)* 10.99(b)* 64.25*

$- $(.0497) $1.00 5.08 $437,132 .53 4.93 -
- (.0533) 1.00 5.46 263,213 .57 5.43 -
- (.0377) 1.00 3.82 244,064 .55 3.90 -
- (.0276) 1.00 2.79 129,329 .42 2.77 -
- (.0352) 1.00 3.57 105,694 .48 3.49 -
- (.0576) 1.00 5.92 78,568 .50 5.74 -
- (.0770) 1.00 7.98 77,892 .53 7.67 -
- (.0859) 1.00 8.88 24,975 .63 8.62 -
- (.0575) 1.00 5.84 * 14,001 .71 *
6.70* -

$- $- $17.22 10.17 $1,674,197 .72 (.13) 57.94
$.0488
(.01) (.03) 15.63 44.87 515,109 .84 (.03) 30.87
- - 10.82 8.20 * 68,592 .47(b) * .03(b)*
32.77*

<PAGE>
$- $(.82) $13.21 2.42 $778,924 .69 6.48 142.49
- (.85) 13.74 20.44 747,024 .70 6.22 149.18
- (.88) 12.22 (3.23) 640,458 .67 6.24 118.34
- (.73) 13.53 11.28 735,386 .64 6.16 94.01
- (.60) 12.85 7.49 435,906 .70 6.98 45.82
- (.66) 12.57 17.28 229,306 .74 7.57 59.29
- (.25) 11.36 7.51 98,549 .76 8.24 32.70
- (.86) 10.82 14.06 61,765 .76 8.32 27.81
- - 10.28 2.78 * 28,406 .87 * 7.04*
41.41*

$- $(.51) $14.80 15.80 $657,429 .73 4.22 61.94
$.0475
- (.58) 13.28 31.08 530,461 .68 4.72 60.33
- (.48) 10.68 (7.02) 384,169 .68 5.23 84.88
- (.14) 12.00 13.42 443,281 .69 5.02 50.79
- - 10.71 7.10 * 83,522 .64(b) * 3.43(b)* 19.29*

$- $(1.81) $32.53 12.97 $3,281,490 .63 .36 63.87
$.0544
- (.56) 30.50 40.67 2,000,232 .68 .49 57.51
- (.42) 22.20 1.04 1,026,972 .71 .40 62.44
- (.34) 22.41 18.70 675,198 .66 .33 55.85
- (.52) 19.21 10.36 317,225 .75 .56 48.17
- (.36) 17.94 46.09 156,741 .81 .78 55.04
- (.15) 12.58 (2.03) 48,414 .88 1.58 93.65
- (.62) 13.00 32.38 39,998 .82 1.93 91.82
- - 10.30 2.98 * 7,981 1.35* 1.44* 103.99*

<FN>
* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses of Putnam
VT Asia Pacific Growth Fund for the period ended December 31, 1995 reflect a reduction of approximately $0.03
per share, expenses of Putnam VT High Yield Fund for the period ended December 31, 1988 reflect a reduction of
less than $0.01 per share, expenses of Putnam VT New Opportunities Fund for the period ended December 31, 1994
reflect a reduction of approximately $0.02 per share, and expenses of Putnam VT Utilities Growth and Income Fund
for the period ended December 31, 1992 reflect a reduction of approximately $0.01 per share.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.

(d)
The ratio of expenses to average net assets for the periods ended on or after December 31, 1995
includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios exclude
these amounts.
(e)
Certain funds are required to disclose the average commission rate paid per share for fiscal
periods beginning on or after September 1, 1995.
*
* For the period May 1, 1995 (commencement of operations) to December 31, 1995.
** *
For the period September 15, 1993 (commencement of operations) to December 31, 1993.
*** *
For the period February 1, 1988 (commencement of operations) to December 31, 1988.
****
* For the period May 1, 1990 (commencement of operations) to December 31, 1990 .
****** For the period May 2, 1994 (commencement of operations) to December 31, 1994.
******* For the period May 4, 1992 (commencement of operations) to December 31, 1992.

/TABLE
<PAGE>
THE TRUST

The Trust is designed to serve as a funding vehicle for insurance
separate accounts associated with variable annuity contracts and
variable life insurance policies. The Trust presently serves as
the funding vehicle for variable annuity contracts and variable
life insurance policies offered by separate accounts of various
insurance companies. You should consult the prospectus issued by
the relevant insurance company for more information about a
separate account. Shares of the Trust are offered to these
separate accounts through Putnam Mutual Funds Corp. ("Putnam
Mutual Funds"), the principal underwriter for the Trust.

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Each fund of the Trust has its own investment objective or
objectives which it pursues through its own investment policies
as described below. The particular objectives and policies of
the funds can be expected to affect the return of each fund and
the degree of market and financial risk to which each fund is
subject. For more information about the investment strategies
employed by the funds, see "Common investment policies and
techniques." The investment objectives and policies of each fund
may, unless otherwise specifically stated, be changed by the
Trustees without a vote of the shareholders. As a matter of
policy, the Trustees would not materially change the investment
objective or objectives of a fund without shareholder approval.
None of the funds is intended to be a complete investment
program, and there is no assurance that any fund will achieve its
objective or objectives.

Additional portfolios with differing investment objectives and
policies may be created from time to time for use as funding
vehicles for insurance company separate accounts or for other
insurance products. In addition, the Trustees may, subject to
any necessary regulatory approvals, eliminate any fund or divide
any fund into two or more classes of shares with such special or
relative rights and privileges as the Trustees may determine.

Glossary

The following terms are frequently used in this prospectus. Many
of these terms are explained in greater detail under "Common
investment policies and techniques."

"Putnam Management" -- Putnam Investment Management, Inc., the
Trust's investment manager

"S&P" -- Standard & Poor's

"Moody's" -- Moody's Investors Service, Inc.

"U.S. government securities" -- debt securities issued or
guaranteed by the U.S. government, by various of its agencies, or
by various instrumentalities established or sponsored by the U.S.
government. Certain U.S. government securities, including U.S.
Treasury bills, notes and bonds, mortgage participation
certificates guaranteed by Ginnie Mae, and Federal Housing
Administration debentures, are supported by the full faith and
credit of the United States. Other U.S. government securities
issued or guaranteed by federal agencies or government-sponsored
enterprises are not supported by the full faith and credit of the
United States. These securities include obligations supported by
the right of the issuer to borrow from the U.S. Treasury, such as
obligations of Federal Home Loan Banks, and obligations supported
only by the credit of the instrumentality, such as Fannie Mae
bonds.

"CMOs" -- collateralized mortgage obligations

"Ginnie Mae" -- Government National Mortgage Association

"Fannie Mae" -- Federal National Mortgage Association

"Freddie Mac" -- Federal Home Loan Mortgage Corporation

PUTNAM VT ASIA PACIFIC GROWTH FUND

Putnam VT Asia Pacific Growth Fund's investment objective is to
seek capital appreciation. In seeking capital appreciation, the
fund will invest primarily in securities of companies located in
Asia and in the Pacific Basin. The fund's investments will
normally include common stocks, preferred stocks, securities
convertible into common stocks or preferred stocks, and warrants
to purchase common stocks or preferred stocks. The fund may also
invest to a lesser extent in debt securities and other types of
investments if Putnam Management believes they would help achieve
the fund's objective. The fund may hold a portion of its
assets in cash and high-quality money market instruments.

The fund may invest in securities of issuers located in any
country in Asia or the Pacific Basin where Putnam Management
believes there is potential for above-average capital
appreciation. Such countries may include, for example,
Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
New Zealand, the People's Republic of China, the Philippines,
Singapore, Taiwan and Thailand.

It is anticipated that under normal market conditions the fund
will invest at least 85% of its assets in securities of companies
located in Asia and in the Pacific Basin which Putnam Management
believes have potential for capital appreciation. The fund will
consider an issuer of securities to be located in Asia or in the
Pacific Basin if it is organized under the laws of a country in
Asia or the Pacific Basin and has a principal office in a country
in Asia or the Pacific Basin, if it derives 50% or more of its
total revenues from business in Asia or the Pacific Basin, or if
its equity securities are traded principally on a securities
exchange in Asia or the Pacific Basin. It is anticipated that
under normal circumstances the fund will invest at least 65% of
its assets in securities of issuers meeting at least one of the
first two criteria described in the preceding sentence. For a
discussion of the risks associated with foreign investing, see
"Common investment policies and techniques -- Foreign
investments."

The fund will not limit its investments to any particular type of
company. The fund may invest in companies, large or small, whose
earnings are believed to be in a relatively strong growth trend,
or in companies in which significant further growth is not
anticipated but whose securities are thought to be undervalued.
It may invest in small and relatively less well-known companies.
These companies, which typically have equity market
capitalizations below $1 billion, may present greater
opportunities for capital appreciation, but may also involve
greater risk. They may have limited product lines, markets or
financial resources, or may depend on a limited management group.
Their securities may trade less frequently and in limited volume,
and only in the over-the-counter market or on a regional
securities exchange. As a result, these securities may fluctuate
in value more than those of larger, more established
companies.

Debt securities in which the fund may invest will generally be
rated at least Baa or BBB by a nationally-
recognized securities rating agency, such as Moody's or S&P,
and in any event the fund will not invest in debt securities
rated less than Baa or BBB by each rating
agency rating such security, or in unrated securities
that Putnam Management determines are of comparable
quality , if as a result, more than 5% of the fund's
assets would be invested in such securities. Debt securities
rated Baa or BBB have speculative characteristics and adverse
economic conditions may lead to a weakened capacity to pay
interest and repay principal. The foregoing
investment limitations will be measured at the time of
purchase and, to the extent that a security is assigned a
different rating by one or more of the various rating
agencies, Putnam Management will use the highest rating
assigned by any agency.

In addition to engaging in the options and futures transactions
described under "Common investment policies and techniques
- --Futures and options," the fund may purchase warrants, issued by
banks and other financial institutions, whose values are based on
the values of one or more stock indices.

The fund may engage in defensive strategies when Putnam
Management judges that conditions in the securities markets make
pursuing the fund's basic investment strategy inconsistent with
the best interests of its shareholders. When pursuing
such defensive strategies, the fund may invest without limit in
securities primarily traded in U.S. markets or in other markets
outside Asia or the Pacific Basin. See "Common investment
policies and techniques" below for a discussion of these
strategies. The fund may also engage in foreign currency
exchange transactions and in transactions in futures and options,
enter into repurchase agreements, loan its portfolio securities
and purchase securities for future delivery. See "Common
investment policies and techniques" below for a discussion of
these securities and types of transactions and the risks
associated with them.

Putnam VT Asia Pacific Growth Fund will generally be managed in a
style similar to that of Putnam Asia Pacific Growth Fund.

PUTNAM VT DIVERSIFIED INCOME FUND

Putnam VT Diversified Income Fund seeks high current income
consistent with capital preservation. The fund pursues its
investment objective by allocating its investments among the
following three sectors of the fixed-income securities markets:

* a U.S. Government Sector, consisting primarily of debt
obligations of the U.S. government, its agencies and
instrumentalities;

* a High Yield Sector, consisting of high-yielding, lower-rated,
higher - risk U.S. and foreign fixed-income securities
(commonly known as "junk bonds"); and

* an International Sector, consisting of obligations of foreign
governments, their agencies and instrumentalities, and other
fixed-income securities denominated in foreign currencies.

Putnam Management believes that diversifying the fund's
investments among these sectors, as opposed to investing
exclusively in any one sector, will better enable the fund to
preserve capital while pursuing its objective of high current
income. Historically, the markets for U.S. government
securities, high yielding corporate fixed-income securities, and
debt securities of foreign issuers have tended to behave
independently and have at times moved in opposite directions.
For example, U.S. government securities have generally been
affected negatively by inflationary concerns resulting from
increased economic activity. High-yield corporate fixed-income
securities, on the other hand, have generally benefitted from
increased economic activity due to improvements in the
credit quality of corporate issuers. The reverse has generally
been true during periods of economic decline. Similarly, U.S.
government securities have often been negatively affected by a
decline in the value of the dollar against foreign currencies,
while the bonds of foreign issuers held by U.S. investors have
generally benefitted from such decline. Putnam Management
believes that, when financial markets exhibit such a lack of
correlation, a pooling of investments among these markets may
produce greater preservation of capital over the long term than
would be obtained by investing exclusively in any one of the
markets.

Putnam Management will determine the amount of assets to be
allocated to each of the three market sectors in which the fund
will invest based on its assessment of the returns that can be
achieved from a portfolio which is invested in all three sectors.
In making this determination, Putnam Management will rely in part
on quantitative analytical techniques that measure relative risks
and opportunities of each market sector based on current and
historical market data for each sector, as well as on its own
assessment of economic and market conditions. Although there
are no fixed limits on allocations among sectors, including
investments in the High Yield Sector, Putnam Management will
continuously review this allocation of assets and make such
adjustments as it deems appropriate . Because of the
importance of sector diversification to the fund's investment
policies, Putnam Management expects that a substantial portion of
the fund's assets will normally be invested in each of the three
market sectors. The fund's assets allocated to each of these
market sectors will be managed in accordance with particular
investment policies, which are summarized below.

The fund may invest in premium securities, engage in foreign
currency exchange transactions, transactions in futures and
options, enter into repurchase agreements, loan its portfolio
securities and purchase securities for future delivery. See
"Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The fund may also hold a portion of
its assets in cash and money market instruments.

Putnam VT Diversified Income Fund will generally be managed in a
style similar to that of Putnam Diversified Income Trust.
<PAGE>
U.S. Government Sector

The fund will invest assets allocated to the U.S. Government
Sector primarily in U.S. government securities. In purchasing
securities for the U.S. Government Sector, Putnam Management may
take full advantage of the entire range of maturities of U.S.
government securities and may adjust the average maturity of the
investments held in the portfolio from time to time, depending on
its assessment of relative yields of securities of different
maturities and its expectations of future changes in interest
rates. Under normal market conditions, the fund will invest at
least 20% of its net assets in U.S. government securities ,
and at least 65% of the assets allocated to the U.S. Government
Sector will be invested in U.S. government securities.

The fund may invest assets allocated to the U.S. Government
Sector in a variety of debt securities, including asset-backed
and mortgage-backed securities, such as CMOs and certain stripped
mortgage-backed securities, that are issued by private U.S.
issuers. For a description of these securities, and the risks
associated with them, see "Common investment policies and
techniques -- Mortgage-backed and asset-backed securities."

With respect to assets allocated to the U.S. Government Sector,
the fund will only invest in privately issued debt securities
that are rated at least A by a nationally recognized
securities rating agency such as S&P or Moody's , or in
unrated securities that Putnam Management determines are of
comparable quality. The fund will not necessarily dispose of a
security if its rating is reduced below its rating at the time
of purchase. However, Putnam Management will consider
such reduction in its determination of whether the fund
should continue to hold the security in its portfolio.
The foregoing investment limitations will be measured at
the time of purchase and, to the extent that a security is
assigned a different rating by one or more of the various rating
agencies, Putnam Management will use the highest rating assigned
by any agency .

Risk factors. U.S. government securities are considered among
the safest of fixed-income investments , but their values,
like those of other debt securities, will fluctuate with changes
in interest rates. Changes in the value of portfolio securities
will not affect interest income from those securities, but
will be reflected in the fund's net asset value. Thus, a
decrease in interest rates will generally result in an increase
in the value of fund shares . Conversely, during periods of
rising interest rates, the value of fund shares will
generally decline. The magnitude of these fluctuations will
generally be greater for securities with longer maturities ,
and the fund expects that its portfolio will normally be weighted
towards longer maturities . Because of their added safety,
the yields available from U.S. government securities are
generally lower than the yields available from comparable
corporate debt securities .

While certain U.S. government securities, such as U.S. Treasury
obligations and Ginnie Mae certificates, are backed by the full
faith and credit of the U.S. government, other securities in
which the fund may invest are subject to varying degrees of risk
of default . These risk factors include the creditworthiness
of the issuer and , in the case of mortgage-backed and
asset-backed securities, the ability of the underlying
mortgagors or other borrowers to meet their
obligations.

High Yield Sector

The fund will invest assets allocated to the High Yield Sector
primarily in high yielding, lower-rated, higher risk U.S. and
foreign corporate fixed-income securities, including debt
securities, convertible securities and preferred stocks. As
discussed below, however, under certain circumstances the fund
may invest all or any part of the High Yield Sector portfolio in
higher-rated and unrated fixed-income securities. The fund will
not necessarily invest in the highest yielding securities
available if in Putnam Management's opinion the differences in
yield are not sufficient to justify the higher risks involved.

The High Yield Sector may invest in any security which is
rated at least Caa or CCC by a nationally recognized
securities rating agency, such as Moody's or S&P or in any
unrated security that Putnam Management determines is of
comparable quality . In addition, the High Yield Sector may
invest up to 5% of its net assets in
securities rated below Caa or CCC by each rating
agency rating such security , or in unrated securities
that Putnam Management determines are of comparable
quality. Securities rated below Caa or CCC are
of poor standing and may be in default.

The fund will not necessarily dispose of a security
when its rating is reduced below its rating at the time of
purchase . However, Putnam Management will consider such
reduction in its determination of whether the fund should
continue to hold the security in its portfolio. The
foregoing investment limitations will be measured at the
time of purchase and, to the extent that a security is assigned a
different rating by one or more of the various rating agencies,
Putnam Management will use the highest rating assigned by any
agency . The rating services' descriptions of these rating
categories, including the speculative characteristics of the
lower categories, are included in the Appendix to this
prospectus.

The table below shows the percentages of fund assets invested
during fiscal 1996 in securities assigned to the various
rating categories by S&P, or, if unrated by S&P, assigned to
comparable rating categories by another rating agency , and
in unrated securities determined by Putnam Management to be of
comparable quality.

Rated securities, Unrated securities of
as percentage of comparable quality, as
Rating net assets percentage of net assets
- ------ ------------- ------------------------
"AAA" 44.98% 0.65%
"AA" 8.93% 0.34%
"A" 0.91% 0.01%
"BBB" 0.94% 0.01%
"BB" 12.26% 0.82%
"B" 17.25% 3.75%
"CCC" 2.88% 0.14%
"D" 0.09% --
------ -----
88.24% 5.72%
====== =====

For a description of the risks associated with investments in
fixed-income securities, including lower-rated fixed-income
securities, see "Common investment policies and techniques --
Lower-rated and other fixed-income securities."

The fund may invest assets allocated to the High Yield Sector in
participations and assignments of fixed and floating rate loans
made by financial institutions to governmental or corporate
borrowers. In addition to the more general investment
considerations applicable to fixed-income investments,
participations and assignments involve the risk that the
institution's insolvency could delay or prevent the flow of
payments on the underlying loan to the fund. The fund may have
limited rights to enforce the terms of the underlying loan, and
the liquidity of loan participations and assignments may be
limited.

The fund may also invest assets allocated to the High Yield
Sector in lower-rated securities of foreign corporate and
governmental issuers denominated either in U.S. dollars or in
foreign currencies. For a discussion of the risks associated
with foreign investing, see "Common investment policies and
techniques -- Foreign investments."

The fund may invest in securities of issuers in emerging
markets, as well as more developed markets. Investing in
emerging markets generally involves more risk than investing in
developed markets.
<PAGE>
International Sector

The fund will invest the assets allocated to the International
Sector in debt obligations and other fixed-income securities
denominated in non-U.S. currencies. These securities include:

* debt obligations issued or guaranteed by foreign national,
provincial, state, or other governments with taxing
authority, or by their agencies or instrumentalities;

* debt obligations of supranational entities (described below);
and

* debt obligations and other fixed-income securities of foreign
and U.S. corporate issuers.

When investing in the International Sector, the fund will
purchase only debt securities rated at least A by a
nationally recognized securities rating agency or unrated
securities that Putnam Management determines are of comparable
quality. The fund may, however, make investments in
international debt securities rated below A with respect to
assets allocated to the High Yield Sector. The foregoing
investment limitations will be measured at the time of purchase
and, to the extent that a security is assigned a different rating
by one or more of the various rating agencies, Putnam Management
will use the highest rating assigned by any agency.

In the past, yields available from securities denominated in
foreign currencies have often been higher than those of
securities denominated in U.S. dollars. Although the fund has
the flexibility to invest in any country where Putnam Management
sees potential for high income, it presently expects to invest
primarily in securities of issuers in industrialized Western
European countries (including Scandinavian countries) and in
Canada, Japan, Australia, and New Zealand. Putnam Management
will consider expected changes in foreign currency exchange rates
in determining the anticipated returns of securities denominated
in foreign currencies.

The obligations of foreign governmental entities, including
supranational issuers, have various kinds of government support.
Obligations of foreign governmental entities include obligations
issued or guaranteed by national, provincial, state or other
governments with taxing power or by their agencies. These
obligations may or may not be supported by the full faith and
credit of a foreign government.

Supranational entities include international organizations
designated or supported by governmental entities to promote
economic reconstruction or development and international banking
institutions and related government agencies. Examples include
the International Bank for Reconstruction and Development (the
World Bank), the European Steel and Coal Community, the Asian
Development Bank, and the Inter-American Development Bank. The
governmental members or "stockholders" usually make initial
capital contributions to the supranational entity and in many
cases are committed to make additional capital contributions if
the supranational entity is unable to repay its borrowing. Each
supranational entity's lending activities are limited to a
percentage of its total capital (including "callable capital"
contributed by members at the entity's call), reserves, and net
income.

For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments."

PUTNAM VT GLOBAL ASSET ALLOCATION FUND

The investment objective of Putnam VT Global Asset Allocation
Fund is to seek a high level of long-term total return consistent
with preservation of capital. By seeking total return, the fund
seeks to increase the value of the shareholder's investment
through both capital appreciation and investment income. "Total
return" includes interest and dividend income, net of expenses,
and realized and unrealized capital gains and losses on
securities. The fund invests in a wide variety of equity and
fixed-income securities both of U.S. and foreign issuers. The
fund's portfolio may include securities in the following four
investment categories, which in the judgment of Putnam Management
represent large, well-differentiated classes of securities with
distinctive investment characteristics:

U.S. Equities
International Equities
U.S. Fixed Income
International Fixed Income

The amount of fund assets assigned to each investment category
will be reevaluated by Putnam Management at least quarterly based
on Putnam Management's assessment of the relative market
opportunities and risks of each investment category taking into
account various economic and market factors.

The fund may engage in defensive strategies when Putnam
Management judges that conditions in the securities markets make
pursuing the fund's basic investment strategy inconsistent with
the best interests of its shareholders. When pursuing
such defensive strategies, the fund may invest without limit in
securities primarily traded in U.S. markets. See "Common
investment policies and techniques" below for a discussion of
these strategies. The fund may invest in premium securities,
engage in foreign currency exchange transactions and transactions
in futures and options, enter into repurchase agreements, loan
its portfolio securities and purchase securities for future
delivery. See "Common investment policies and techniques" below
for a discussion of these securities and types of transactions
and the risks associated with them. The fund may also hold a
portion of its assets in cash and money market instruments.

The portion of the fund's assets invested in each investment
category will be managed as a separate investment portfolio in
accordance with that category's particular investment objectives
and policies, independently of the fund's overall objective. The
following is a description of the investment objectives and
policies of each investment category:

U.S. Equities. The objective of the U.S. Equities category is to
seek both capital growth and, to a lesser extent, current income
through equity securities. This category's portfolio will
include equity securities selected primarily to provide one or
more of the following factors: growth in value, capital
protection and dependable income. Investments will be made in
companies, large or small, whose earnings are believed to be in a
relatively strong growth trend or whose securities are thought to
be undervalued. The fund may invest in small and relatively less
well-known companies. Investing in these companies may present
greater opportunities for capital appreciation, but also may
involve greater risk. They may have limited product lines,
markets or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and
in limited volume, and only in the over-the-counter market or on
a regional securities exchange. As a result, these securities
may fluctuate in value more than securities of larger, more
established companies.

International Equities. The objective of the International
Equities category is to seek capital appreciation. This
category's portfolio will be invested in securities principally
traded in foreign securities markets. These securities will
primarily be common stocks or securities convertible into common
stocks. Investments will be made in companies, large or small,
whose earnings are believed to be in a relatively strong growth
trend or whose securities are thought to be undervalued. The
fund may invest in small and relatively less well-known
companies. Investing in these companies may present greater
opportunities for capital appreciation, but also may involve
greater risk. They may have limited product lines, markets or
financial resources, or may depend on a limited management group.
Their securities may trade less frequently and in limited volume.
As a result, these securities may fluctuate in value more than
securities of larger, more established companies. For a
discussion of the risks associated with foreign investments, see
"Common investment policies and techniques -- Foreign
investments."

U.S. Fixed Income. The objective of the U.S. Fixed Income
category is to seek high current income through a portfolio of
fixed-income securities which in the judgment of Putnam
Management does not involve undue risk to principal or income.
The U.S. Fixed Income category may invest in any fixed-income
securities Putnam Management considers appropriate, including
U.S. government securities, debt securities, mortgage-backed and
asset-backed securities, convertible securities and preferred
stocks of non-governmental issuers.

Whereas certain U.S. government securities in which the fund may
invest, such as U.S. Treasury obligations and Ginnie Mae
certificates, are supported by the full faith and credit of the
United States, other fixed-income securities in which the fund
may invest are subject to varying degrees of risk of default
depending upon, among other factors, the creditworthiness of the
issuer and the ability of the borrower, or, in the case of
mortgage-backed securities, the mortgagor, to meet its
obligations. While the credit risks presented by differing types
of fixed-income securities vary, the values of all fixed-income
securities change as interest rates fluctuate.

For a description of the risks associated with investments in
mortgage-backed and asset-backed securities, see "Common
investment policies and techniques -- Mortgage-backed and asset-
backed securities."

International Fixed Income. The investment objective of the
International Fixed Income category is to seek high current
income by investing principally in debt securities denominated in
foreign currencies which are issued by foreign governments and
governmental or supranational agencies. This category may also
invest in other privately issued debt securities, convertible
securities and preferred stocks principally traded in foreign
securities markets. For a discussion of the risks associated
with foreign investments, see "Common investment policies and
techniques -- Foreign investments."

General. Putnam Management will adjust the percentage of the
fund's assets in each investment category from time to time based
upon its market outlook and its analysis of longer-term trends.
The fund may from time to time invest in all or any one of the
investment categories as Putnam Management may consider
appropriate in response to changing market conditions.

The fund will not purchase fixed-income securities rated
below Caa or CCC by each nationally recognized
securities rating agency, such as S&P or Moody's, rating such
security or, if unrated, determined by Putnam Management to
be of comparable quality, if, as a result more than 5% of the
fund's total assets would be invested in securities of that
quality. In addition, the fund will not purchase fixed-income
securities rated at the time of purchase below Baa or BBB
by each rating agency rating such security , or, if
unrated, determined to be of comparable quality by Putnam
Management, if, as a result, more than 35% of the fund's total
assets would be invested in securities of that quality.

For a description of the risks of investing in fixed-income
securities, including lower-rated fixed-income securities
(commonly known as "junk bonds"), see "Common investment policies
and techniques -- Lower-rated and other fixed-income securities."

PUTNAM VT GLOBAL GROWTH FUND

Putnam VT Global Growth Fund seeks capital appreciation. The
fund is designed for investors seeking above-average capital
growth potential through a globally diversified portfolio of
common stocks. Dividend and interest income is only an
incidental consideration. In seeking capital appreciation, the
fund follows a global investment strategy of investing primarily
in common stocks traded in securities markets located in a number
of foreign countries and in the United States. The fund may at
times invest up to 100% of its assets in securities principally
traded in securities markets outside the United States, and will
under normal market conditions invest at least 65% of its assets
in at least three different countries, one of which may be the
United States. The fund may hold a portion of its assets in cash
and money market instruments.

The fund will not limit its investments to any particular type of
company. It may invest in companies, large or small, whose
earnings are believed to be in a relatively strong growth trend,
or in companies in which significant further growth is not
anticipated but the securities of which are thought to be
undervalued. It may invest in small and relatively less well-
known companies. Investing in these companies may present
greater opportunities for capital appreciation, but may also
involve greater risk. They may have limited product lines,
markets or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and
in limited volume, and only in the over-the-counter market or on
a regional securities exchange. As a result, these securities
may fluctuate in value more than securities of larger, more
established companies.

Putnam Management believes that the securities markets of many
nations move relatively independently of one another, because
business cycles and other economic or political events that
influence one country's securities markets may have little effect
on securities markets in other countries. By investing in a
globally diversified portfolio, Putnam Management attempts to
reduce the risks associated with investing in the economy of only
one country. The countries which Putnam Management believes
offer attractive opportunities for investment may change from
time to time.

Foreign investments can involve risks that may not be present in
domestic securities. For a discussion of the risks associated
with foreign investments, see "Common investment policies and
techniques -- Foreign investments."

The fund may also engage in foreign currency exchange
transactions and transactions in futures and options, enter into
repurchase agreements, loan its portfolio securities and purchase
securities for future delivery. See "Common investment policies
and techniques" below for a discussion of these securities and
types of transactions and the risks associated with them. The
fund may engage in defensive strategies when Putnam Management
judges that conditions in the securities markets make pursuing
the fund's basic investment strategy inconsistent with the best
interests of its shareholders. When pursuing such
defensive strategies, the fund may invest without limit in
securities primarily traded in U.S. markets. See "Common
investment policies and techniques" below for a discussion of
these strategies.

Putnam VT Global Growth Fund will generally be managed in a style
similar to that of Putnam Global Growth Fund.

PUTNAM VT GROWTH AND INCOME FUND

Putnam VT Growth and Income Fund seeks capital growth and current
income as its investment objectives. The fund invests primarily
in common stocks that offer potential for capital growth, current
income, or both. The fund may also purchase corporate bonds,
notes and debentures, preferred stocks , convertible
securities (both debt securities and preferred stocks) or U.S.
government securities, if Putnam Management determines that their
purchase would help further the fund's investment objectives.
The types of securities held by the fund may vary from time to
time in light of the fund's investment objectives, changes in
interest rates, and economic and other factors. The fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the fund's
basic investment strategy inconsistent with the best interests of
the fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

The fund may invest up to 20% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments." The fund may
invest in both higher-rated and lower-rated fixed-income
securities. The risks associated with fixed-income securities,
including lower-rated fixed-income securities (commonly known as
"junk bonds"), are discussed below under "Common investment
policies and techniques -- Lower-rated and other fixed-income
securities."

The fund may hold a portion of its assets in cash and money
market instruments. The fund may also engage in foreign currency
exchange transactions and transactions in futures and options,
enter into repurchase agreements, loan its portfolio securities
and purchase securities for future delivery. See "Common
investment policies and techniques" below for a discussion of
these securities and types of transactions and the risks
associated with them.

Putnam VT Growth and Income Fund will generally be managed in a
style similar to that of The Putnam Fund for Growth and Income.

PUTNAM VT HIGH YIELD FUND

The primary investment objective of Putnam VT High Yield Fund is
to seek high current income. Capital growth is a secondary
objective when consistent with high current income.

The fund seeks high current income by investing primarily in
high-yielding, lower-rated fixed-income securities (commonly
known as "junk bonds"), constituting a portfolio which Putnam
Management believes does not involve undue risk to income or
principal. Normally, at least 80% of the fund's assets will be
invested in debt securities, convertible securities or preferred
stocks that are consistent with its primary investment objective
of high current income. The fund's remaining assets may be held
in cash or money market instruments, or invested in common stocks
and other equity securities when these types of investments
are consistent with the objective of high current income .
The fund may invest up to 20% of its assets in foreign
securities. For a discussion of the risks associated with
foreign investments, see "Common investment policies and
techniques -- Foreign investments." The fund may also invest in
premium securities, engage in foreign currency exchange
transactions, enter into repurchase agreements, loan its
portfolio securities and purchase securities for future delivery.
See "Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The fund may engage in defensive
strategies when Putnam Management judges that conditions in the
securities markets make pursuing the fund's basic investment
strategy inconsistent with the best interests of the fund's
shareholders. See "Common investment policies and techniques"
below for a discussion of these strategies.

The fund seeks its secondary objective of capital growth, when
consistent with its primary objective of high current income, by
investing in securities which may be expected to appreciate in
value as a result of declines in long-term interest rates or as a
result of favorable developments affecting the business or
prospects of the issuer which may improve the issuer's financial
condition and credit rating. Putnam Management believes that
such opportunities for capital appreciation often exist in the
securities of smaller capitalization companies which have the
potential for significant growth. These securities may
involve greater risks than the securities of larger, more
established issuers.

The fund may generally invest in any security which is
rated at least Caa or CCC by a nationally
recognized securities rating agency, such as S&P or Moody's ,
or in any unrated security which Putnam Management determines is
of comparable quality. The fund will not necessarily dispose of
a security when its rating is reduced below its rating at the
time of purchase . However, Putnam Management will
consider such reduction in its determination of whether
the fund should continue to hold the security in its
portfolio . Securities rated below Baa or BBB
are considered to be of poor standing and predominantly
speculative. The fund may invest up to 15% of its assets in
securities rated below Caa or CCC by each rating
agency rating such security , including securities in the
lowest rating category of each rating agency, or in unrated
securities Putnam Management determines are of comparable
quality. Such securities may be in default and are generally
regarded by the rating agencies as having extremely poor
prospects of ever attaining any real investment standing. For a
discussion of the risks associated with investments in fixed-
income securities, including lower-rated fixed-income securities,
see "Common investment policies and techniques --Lower-rated and
other fixed-income securities." The foregoing investment
limitations will be measured at the time of purchase and, to the
extent that a security is assigned a different rating by one or
more of the various rating agencies, Putnam Management will use
the highest rating assigned by any agency.

Rated securities, Unrated securities of
as percentage of comparable quality, as
Rating net assets percentage of net assets
- ------ ----------------- ------------------------
"AAA" -- --
"AA" -- --
"A" 0.23% --
"BBB" 1.76% --
"BB" 26.66% 0.99%
"B" 41.85% 12.30%
"CCC" 5.62% 0.22%
"CC" -- --
"C" -- --
----- -----
76.12% 13.51%
===== =====

The fund may invest in participations and assignments of fixed
and floating rate loans made by financial institutions to
governmental or corporate borrowers. In addition to the more
general investment considerations applicable to fixed-income
investments, participations and assignments involve the risk that
the institution's insolvency could delay or prevent the flow of
payments on the underlying loan to the fund. The fund may have
limited rights to enforce the terms of the underlying loan, and
the liquidity of loan participations and assignments may be
limited.

Putnam VT High Yield Fund will generally be managed in a style
similar to that of Putnam High Yield Advantage Fund.

PUTNAM VT INTERNATIONAL GROWTH FUND

Putnam VT International Growth Fund seeks capital appreciation.

The fund seeks its objective by investing primarily in equity
securities of companies located in a country other than the
United States. The fund's investments will normally include
common stocks, preferred stocks, securities convertible into
common or preferred stocks, and warrants to purchase common or
preferred stocks. The fund may also invest to a lesser extent in
debt securities and other types of investments if Putnam
Management believes purchasing them would help achieve the fund's
objective. The fund will , under normal
circumstances , invest at least 65% of its total assets
in securities of issuers located in at least three different
countries other than the United States. The fund may hold a
portion of its assets in cash or money market instruments.

The fund will consider an issuer of securities to be "located in
a country other than the United States" if it is organized under
the laws of a country other than the United States and has
a principal office outside the United States, or if it derives
50% or more of its total revenues from business outside
the United States.

Smaller companies may present greater opportunities for capital
appreciation, but may also involve greater risks. They may have
limited product lines, markets for financial resources, or may
depend on a limited management group. Their securities may trade
less frequently and in limited volume. As a result, the prices of
these securities may fluctuate more than prices of securities of
larger, more established companies.

The fund may invest in securities of issuers in
emerging markets, as well as more developed markets. Investing in
emerging markets generally involves more risk than investing
in developed markets .

Putnam VT International Growth Fund will generally be managed in
a style similar to that of Putnam International Growth Fund.
<PAGE>
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND

Putnam VT International Growth and Income Fund seeks capital
growth. Current income is a secondary objective.

The fund will invest primarily in common stocks that offer
potential for capital growth, and may, consistent with its
investment objectives, invest in stocks that offer potential for
current income. Under normal market conditions, the fund expects
to invest substantially all of its assets in securities
principally traded on markets outside the United States. The
fund will normally diversify its investments among a
number of different countries and, except when investing
for defensive purposes, will invest at least 65% of its total
assets in at least three countries other than the United States.
The fund may invest in securities of issuers in emerging market
countries, as well as securities of issuers in more developed
countries. Investing in emerging market countries involves
special risks. For a discussion of the risks of foreign
investments, see "Common investment policies and techniques -
- - Foreign investments."

The fund may also purchase corporate bonds, notes and debentures,
preferred stocks, securities convertible into common stock or
other equity securities, or U.S. or foreign government securities
if Putnam Management determines that their purchase would help
further the fund's investment objectives.

The types of securities held by the fund may vary from time to
time in light of the fund's investment objectives, changes in
interest rates, and economic and other factors. When selecting
portfolio securities for the fund that have the potential for
capital growth, Putnam Management will seek to identify
securities that are significantly undervalued in relation to
underlying asset values or earnings potential. The fund may also
hold a portion of its assets in cash or high-quality money market
instruments.

The fund may invest a portion of its assets in securities of
small-capitalization companies (defined for these purposes as
companies with equity market capitalizations of less than $1
billion). These securities may involve certain special risks.
Such companies may have limited product lines, markets or
financial resources, and may be dependent on a limited management
group. Such securities may trade less frequently and in smaller
volume than more widely held securities. The values of these
securities may fluctuate more sharply than those of other
securities, and the fund may experience some difficultly in
establishing or closing out positions in these securities at
prevailing market prices. There may be less publicly available
information about the issuers of these securities or less market
interest in such securities than in the case of larger companies,
and it may take a longer period of time for the prices of such
securities to reflect the full value of their issuers' underlying
earnings potential or assets.

The fund may invest in fixed-income securities rated at least
C by a nationally recognized securities rating agency, such as
S&P or Moody's , and in unrated securities which Putnam
Management determines to be of comparable quality. The risks
associated with fixed-income securities, including lower-rated
fixed-income securities (commonly known as "junk bonds"), are
discussed below under "Common investment policies and techniques
- -- Lower-rated and other fixed-income securities." The fund
will not necessarily dispose of a security when its rating is
reduced below its rating at the time of purchase. However, Putnam
Management will consider such reduction in its determination of
whether the fund should continue to hold the security in its
portfolio . The foregoing investment limitations will
be measured at the time of purchase and, to the extent that a
security is assigned a different rating by one or more of the
various rating agencies, Putnam Management will use the
highest rating assigned by any agency.

Putnam VT International Growth and Income Fund will generally be
managed in a style similar to that of Putnam International Growth
and Income Fund.

PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND

Putnam VT International New Opportunities Fund seeks long-term
capital appreciation.
<PAGE>
The fund seeks to invest in companies that have above-average
growth prospects due to the fundamental growth of their market
sector. Under normal market conditions, the fund expects to
invest substantially all of its total assets, other than cash or
short-term investments held pending investment , in common
stocks, preferred stocks, convertible preferred stocks,
convertible bonds and other equity securities principally traded
in securities markets outside the United States. The fund will
normally diversify its investments among a number of different
countries and, except when investing for defensive purposes, will
invest at least 65% of its assets in at least three different
countries other than the United States.

Putnam Management believes that different market sectors in
different countries will experience different rates of growth
depending on the state of economic development of each country.
As a result, Putnam Management seeks to identify those market
sectors which will experience above-average growth in three broad
categories of economies: less developed economies, developing
economies that have experienced sustained growth over the recent
past, and mature economies. Within the identified growth sectors
of each type of economy, Putnam Management seeks to invest in
particular companies that offer above-average growth prospects.
The sectors in which the fund will invest are likely to change
over time and may include a variety of industries. Subject to
the fund's investment restrictions, the fund may invest up to
one-half of its assets in any one sector. The fund's emphasis on
particular sectors may make the value of the fund's shares more
susceptible to any single economic, political or regulatory
development than the shares of an investment company which is
more widely diversified. As a result, the value of the fund's
shares may fluctuate more than the value of the shares of such an
investment company. The fund may also invest a portion of its
assets in market sectors other than those that Putnam Management
believes will experience above-average growth if Putnam
Management believes that such investments are consistent with the
fund's investment objective of long-term capital appreciation.

Companies in the fund's portfolio may include small, rapidly
growing companies with equity market capitalizations of less than
$1 billion. These companies may present greater opportunities
for capital appreciation, but may also involve greater risk.
They may have limited product lines, markets or financial
resources, or may depend on a limited management group. Their
securities may trade less frequently and in limited volume, and
only in the over-the-counter market or on a regional securities
exchange. As a result, these securities may fluctuate in value
more than those of larger, more established companies.

Because Putnam Management evaluates securities for the fund based
on their long-term potential for capital appreciation, the fund's
investments may not appreciate or yield significant income over
the shorter term, and, as a result, the fund's total return over
certain periods may be less than that of other equity mutual
funds.

The fund invests primarily in common stocks and other equity
securities, but may also invest up to 10% of its total assets in
non-convertible debt securities if Putnam Management believes
they would help achieve the fund's objective of long-term capital
appreciation. The fund may invest in securities in the lower-
rated categories. Securities in the lower-rated categories are
considered to be predominantly speculative and may be in default.
See "Common investment policies and techniques -- Lower-rated and
other fixed-income securities." The fund may also hold a portion
of its assets in cash or high-quality money market instruments.

The securities markets of less developed economies and of many
developing economies are sometimes referred to as "emerging
securities markets." Although the amount of the fund's assets
invested in emerging securities markets will vary over time,
Putnam Management currently expects that a substantial portion of
the fund's assets will be invested in emerging securities
markets. These markets are generally characterized by limited
trading volume and greater volatility and, as a result, the fund
may be subject to greater risks to the extent of its investments
in such markets.

Putnam VT International New Opportunities Fund will generally be
managed in a style similar to that of Putnam International New
Opportunities Fund.
<PAGE>
PUTNAM VT MONEY MARKET FUND

Putnam VT Money Market Fund seeks as high a rate of current
income as Putnam Management believes is consistent with
preservation of capital and maintenance of liquidity. It is
designed for investors seeking current income with stability of
principal.

The fund invests in a portfolio of high-quality money market
instruments. Examples of these instruments include:

* bank certificates of deposit (CDs): negotiable certificates
issued against funds deposited in a commercial bank for a
definite period of time and earning a specified return.

* bankers' acceptances: negotiable drafts or bills of
exchange, which have been "accepted" by a bank, meaning, in
effect, that the bank has unconditionally agreed to pay the
face value of the instrument on maturity.

* prime commercial paper: high-grade, short-term obligations
issued by banks, corporations and other issuers.

* corporate obligations: high-grade, short-term corporate
obligations other than prime commercial paper.

* municipal obligations: high-grade, short-term municipal
obligations.

* U.S. government securities: marketable securities issued or
guaranteed as to principal and interest by the U.S.
government or by its agencies or instrumentalities.

* repurchase agreements: contracts under which the fund
acquires U.S. Treasury or U.S. government agency
obligations for a relatively short period subject to the
agreement of the seller to repurchase and the fund to resell
such obligations at a fixed time and price (representing the
fund's cost plus interest) .

The fund will invest only in high-quality securities that Putnam
Management believes present minimal credit risk. High-quality
securities are securities rated at the time of acquisition in one
of the two highest categories by at least two nationally
recognized rating services (or, if only one rating service has
rated the security, by that service) or if the security is
unrated, judged to be of equivalent quality by Putnam Management.
The fund will maintain a dollar-weighted average maturity of 90
days or less and will not invest in securities with remaining
maturities of more than 397 days. The fund may invest in
variable or floating rate securities which bear interest at rates
subject to periodic adjustment or which provide for periodic
recovery of principal on demand. Under certain conditions, these
securities may be deemed to have remaining maturities equal to
the time remaining until the next interest adjustment date or the
date on which principal can be recovered on demand.

The fund may invest in bank certificates of deposit and bankers'
acceptances issued by banks having deposits in excess of $2
billion (or the foreign currency equivalent) at the close of the
last calendar year. Should the Trustees decide to reduce this
minimum deposit requirement, shareholders will be notified and
this prospectus supplemented.

Considerations of liquidity and preservation of capital mean that
the fund may not necessarily invest in money market instruments
paying the highest available yield at a particular time.
Consistent with its investment objective, the fund will attempt
to maximize yields by portfolio trading and by buying and selling
portfolio investments in anticipation of or in response to
changing economic and money market conditions and trends. The
fund will also invest to take advantage of what Putnam Management
believes to be temporary disparities in yields of different
segments of the high-grade money market or among particular
instruments within the same segment of the market. These
policies, as well as the relatively short maturity of obligations
purchased by the fund, may result in frequent changes in the
fund's portfolio. Portfolio turnover may give rise to capital
gains. The fund does not usually pay brokerage commissions
in connection with the purchase or sale of portfolio securities.
See "Management -- Portfolio Transactions -- Brokerage and
research services" in the SAI for a discussion of underwriters'
commissions and dealers' spreads involved in the purchase and
sale of portfolio securities.

The value of the securities in the fund's portfolio can
be expected to vary inversely to changes in prevailing interest
rates. Although the fund's investment policies are designed to
minimize these changes and maintain a net asset value of $1.00
per share, there is no assurance that these policies will be
successful. Withdrawals by shareholders could require the sale
of portfolio investments at a time when such a sale might not
otherwise be desirable.

The fund may invest without limit in the banking industry and in
commercial paper and short-term corporate obligations of issuers
in the personal credit institution and business credit
institution industries when, in the opinion of Putnam Management,
the yield, marketability and availability of investments meeting
the fund's quality standards in those industries justify any
additional risks associated with the concentration of the fund's
assets in those industries. The fund, however, will invest more
than 25% of its assets in the personal credit institution or
business credit institution industries only when, to Putnam
Management's knowledge, the yields then available on securities
issued by companies in such industries and otherwise suitable for
investment by the fund exceed the yields then available on
securities issued by companies in the banking industry and
otherwise suitable for investment by the fund.

The fund may invest without limit in U.S. dollar-denominated
commercial paper of foreign issuers and in bank certificates of
deposits and bankers' acceptances payable in U.S. dollars and
issued by foreign banks (including U.S. branches of foreign
banks) or by foreign branches of U.S. banks. These investments
subject the fund to investment risks different from those
associated with domestic investments. For a discussion of the
risks associated with foreign investments, See "Common
investment policies and techniques -- Foreign investments."

The fund may also lend its portfolio securities. For a
discussion of this strategy and the risks associated with it, see
"Common investment policies and techniques" below.

Insurance

The fund, along with four other Putnam money market funds, has
purchased insurance, which, among other things, will insure the
fund against a decrease in the value of a security held by it due
to the issuer's default or bankruptcy. Most securities and
instruments in which the funds invest, other than U.S. Government
securities, are covered by this insurance. Although the
insurance, which is subject to certain conditions, may provide
the fund with some protection in the event of a decrease in value
of certain of its portfolio securities due to default or
bankruptcy, the policy does not insure or guarantee that the fund
will maintain a stable net asset value of $1.00 per share.

The maximum amount of total coverage under the policy is $30
million, subject to a deductible in respect of each loss equal to
the lesser of $1 million or 0.30% of the fund's net assets. As
of March 31, 1997, the fund's net assets totaled $2.994 billion.
Each of the money market funds that has purchased the insurance
has access to the full amount of insurance under the policy,
subject to the deductible. Accordingly, depending upon the
circumstances, the fund may not be entitled to recover under the
policy, even though it has experienced a loss that would
otherwise be insurable. The annual cost to the fund of
purchasing the insurance is expected to equal approximately 0.02%
of the fund's average net assets. This amount is reflected in
the expense information shown below under the heading "How the
Trust is managed."

Putnam VT Money Market Fund will generally be managed in a style
similar to that of Putnam Money Market Fund.

PUTNAM VT NEW OPPORTUNITIES FUND

Putnam VT New Opportunities Fund seeks long-term capital
appreciation. The fund seeks its objective by investing
principally in common stocks of companies in sectors of the
economy which Putnam Management believes possess above-average
long-term growth potential. The fund will generally invest in
companies which Putnam Management identifies as offering the best
prospects for long-term growth within a particular sector.
Current dividend income is only an incidental consideration. The
fund invests primarily in common stocks, but may also purchase
convertible bonds, convertible preferred stocks, warrants,
preferred stocks and debt securities if Putnam Management
believes they would help achieve the fund's objective of capital
appreciation. The fund may invest up to 20% of its assets in
foreign securities. For a discussion of the risks associated
with foreign investing, see "Common investment policies and
techniques -- Foreign investments." The fund may also engage in
foreign currency exchange transactions and transactions in
futures and options, enter into repurchase agreements, loan its
portfolio securities and purchase securities for future delivery.
See "Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The fund may also hold a portion of
its assets in cash and money market instruments. The fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the fund's
basic investment strategy inconsistent with the best interests of
the fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

The sectors of the economy which offer above-average growth
potential will change over time. At present, Putnam Management
has identified the following sectors of the economy, and examples
of industries within these sectors , as having an above-
average growth potential over the next three to five years:

Personal Communications - long distance telephone, competitive
local exchange carriers, cellular telephone, paging, personal
communication networks;

Media/Entertainment - cable television system operators, cable
television network programmers, casino operators, film
entertainment providers, theme park operators, radio and
television stations, billboard advertising providers ;

Medical Technology/Cost-Containment - home and outpatient care,
medical device companies, biotechnology, health care
information services, physician practice management, managed
care providers;
<PAGE>
Environmental Services - solid waste disposal, hazardous waste
disposal, remediation services, environmental testing;

Applied/Advanced Technology - database software, application
software, entertainment software, networking software, computer
systems integrators, information services companies,
semiconductors;

Personal Financial Services - specialty insurance companies,
credit card issuers, and other consumer-oriented financial
services companies; and

Value-oriented Consuming - retailers, restaurants, hotel
chains, travel companies and other consumer product or
service companies able to provide quality products or services
at lower prices or offering greater perceived value than
competitors.

In addition, the fund may also invest a portion of its assets in
securities of companies that, although not in any of the sectors
described above, are expected to experience above-average growth.

The sectors described above represent Putnam Management's current
judgment of the sectors of the economy which offer the most
attractive growth opportunities. The fund will not necessarily
be invested in each of the seven market sectors at all times.
Such sectors are likely to change over time and may include a
variety of industries. Subject to the fund's investment
restrictions, the fund may invest up to one-half of its assets in
any one sector.

The fund seeks to invest in companies that offer above-average
growth prospects in their particular sector of the economy,
without regard to a company's size. Companies in the fund's
portfolio will range from small, rapidly growing companies to
larger, well-established firms. It may invest in small and
relatively less well-known companies. Investing in these
companies may present greater opportunities for capital
appreciation, but also may involve greater risk. They may have
limited product lines, markets or financial resources, or may
depend on a limited management group. Their securities may trade
less frequently and in limited volume, and only in the over-the-
counter market or on a regional securities exchange. As a
result, these securities may fluctuate in value more than
securities of larger, more established companies.

The fund will normally emphasize investments in particular
economic sectors. Although the fund will not invest more than 25%
of its assets in any one industry, the fund's emphasis on
particular sectors of the economy may make the value of the
fund's shares more susceptible to any single economic, political
or regulatory development than the shares of an investment
company which is more widely diversified. As a result, the value
of the fund's shares may fluctuate more than the value of
the shares of a more diversified investment company.

Putnam VT New Opportunities Fund will generally be managed in a
style similar to that of Putnam New Opportunities Fund.

PUTNAM VT NEW VALUE FUND

Putnam VT New Value Fund seeks long-term capital appreciation.

The fund will invest primarily in common stocks that Putnam
Management believes are undervalued at the time of purchase and
have the potential for long-term capital appreciation. The fund
is unlike most equity mutual funds in that its investments will
be comprised of a relatively small number of issuers (currently
expected to be approximately 40 to 50). Because Putnam
Management evaluates securities for the fund based on their long-
term potential for capital appreciation, the fund's investments
may not appreciate over the shorter term, and as a result
the fund's total return over certain periods may be less than
that of other equity mutual funds. Putnam Management's
investment decisions for the fund may be contrary to those of
most other investors.

In selecting common stocks for the fund, Putnam Management will
consider, among other things, an issuer's financial strength,
current and projected dividend rates, competitive position
and current and projected future earnings. The fund's
investments may include widely-traded common stocks of larger
companies as well as common stocks of small companies with equity
market capitalizations below $1 billion. Small companies
may present greater opportunities for capital appreciation, but
may also involve greater risk. They may have limited product
lines, markets or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and
in limited volume, and only in the over-the-counter market or on
a regional securities exchange. As a result, these securities
may fluctuate in value more than those of larger, more
established companies.

Common stocks and other equity securities are normally the fund's
main investments. However, the fund may purchase preferred
stocks, debt securities and convertible securities (both bonds
and preferred stocks) if Putnam Management believes they would
help achieve the fund's objective of long-term capital
appreciation. The fund may also hold a portion of its assets in
cash or high-quality money market instruments and may invest up
to 20% of its assets in foreign securities. For a discussion of
the risks associated with foreign investments, see "Common
investment policies and techniques -- Foreign investments.

The fund may invest in both higher-rated and lower-rated fixed-
income securities, and is not subject to any restrictions based
on credit ratings. See "Common investment policies and
techniques -- Lower-rated and other fixed-income securities.

Putnam VT New Value Fund will generally be managed in a style
similar to that of Putnam New Value Fund.

PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY BOND FUND

Putnam VT U.S. Government and High Quality Bond Fund seeks
current income consistent with preservation of capital. The fund
invests primarily in U.S. government securities and in other debt
obligations rated at least A by a nationally recognized
securities rating agency, such as S&P or Moody's , or, if not
rated, determined by Putnam Management to be of comparable
quality. For a more detailed description of security ratings,
see the Appendix to this prospectus. The fund will not
necessarily dispose of a security when its rating is
reduced below its rating at the time of purchase . However,
Putnam Management will consider such reduction in its
determination of whether the fund should continue to hold
the security in its portfolio. The foregoing
investment limitations will be measured at the time of
purchase and, to the extent that a security is assigned a
different rating by one or more of the various rating agencies,
Putnam Management will use the highest rating assigned by any
agency.

Putnam Management will allocate the fund's assets between U.S.
government securities and other high quality bonds, depending on
its assessment of market conditions and the relative investment
returns available from such securities. The fund will not,
however, make any investment, if, as a result, less than 25% of
the value of its assets would be invested in U.S. government
securities. The fund may also invest up to 10% of its assets in
foreign securities. For a discussion of the risks associated
with foreign investments, see "Common investment policies and
techniques -- Foreign investments." The fund may also invest in
premium securities, engage in foreign currency exchange
transactions and transactions in futures and options, enter into
repurchase agreements, loan its portfolio securities and purchase
securities for future delivery. See "Common investment policies
and techniques" below for a discussion of these strategies and
the risks associated with them. The fund may also hold a portion
of its assets in cash and money market instruments. The fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the fund's
basic investment strategy inconsistent with the best interests of
its shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

Putnam Management may take full advantage of the entire range of
maturities of U.S. government securities and other high quality
bonds and may adjust the average maturity of the fund's portfolio
from time to time, depending on its assessment of relative yields
on securities of different maturities and expectations of future
changes in interest rates. Thus, at certain times the average
maturity of the portfolio may be relatively short (less than one
year to five years, for example) and at other times may be
relatively long (more than 10 years, for example).

The fund may also invest in high quality mortgage-backed and
asset-backed securities. For a description of these securities,
and the risks associated with them, see "Common investment
policies and techniques -- Mortgage-backed and asset-backed
securities."

U.S. government securities and other high quality bonds do not
involve the degree of credit risk associated with investments in
lower quality fixed-income securities, although, as a result, the
yields available from U.S. government securities and other high
quality bonds are generally lower than the yields available from
many other fixed-income securities. Like other fixed-income
securities, however, the values of U.S. government securities and
other high quality bonds change as interest rates fluctuate.
Fluctuations in the value of the fund's securities will not
affect interest income on securities already held by the fund,
but will be reflected in the fund's net asset value. Since the
magnitude of these fluctuations generally will be greater at
times when the fund's average maturity is longer, under certain
market conditions the fund may invest in short-term investments
yielding lower current income rather than investing in higher
yielding longer-term securities.

PUTNAM VT UTILITIES GROWTH AND INCOME FUND

The investment objective of Putnam VT Utilities Growth and Income
Fund is to seek capital growth and current income. The fund
concentrates its investments in securities issued by companies in
the public utilities industries.

The fund will seek its objective by investing under normal
circumstances at least 65% of its total assets in equity and debt
securities of companies in the public utilities industries.
Equity securities in which the fund may invest include common
stocks, preferred stocks, securities convertible into common
stocks or preferred stocks, and warrants to purchase common or
preferred stocks. Debt securities in which the fund may invest
will be rated at least Baa or BBB by a
nationally recognized securities rating agency, such as S&P or
Moody's, or will be of comparable quality as determined by
Putnam Management. The foregoing investment limitations will
be measured at the time of purchase and, to the extent that a
security is assigned a different rating by one or more of the
various rating agencies, Putnam Management will use the highest
rating assigned by any agency. The fund may invest in debt
and equity securities of issuers in other industries if Putnam
Management believes they will help achieve the fund's objective.

Companies in the public utilities industries include
companies engaged in the manufacture, production, generation,
transmission, sale or distribution of electric or gas energy or
other types of energy and companies engaged in
telecommunications, including telephone, telegraph, satellite,
microwave and other communications media (but not companies
engaged in public broadcasting or cable television). Putnam
Management deems a particular company to be in the public
utilities industries if at the time of investment Putnam
Management determines that at least 50% of the company's assets,
revenues or profits are derived from one or more of those
industries.

The portion of the fund's assets invested in equity securities
and in debt securities will vary from time to time in light of
the fund's investment objective, changes in interest rates, and
economic and other factors. Although the fund expects that in
the near term it will invest substantial portions of its assets
in both equity securities and in debt securities, the fund may
invest all of its assets in either equity or debt securities.
The fund may hold a portion of its assets in cash and money
market instruments.

Since the fund's investments are concentrated in the utilities
industries, the value of its shares can be expected to change in
response to factors affecting those industries, and may
fluctuate more widely than the value of shares of a portfolio
that invests in a broader range of industries. Many utility
companies, especially electric, gas and other energy-related
utility companies, have historically been subject to risks of
increase in fuel and other operating costs, changes in interest
rates on borrowings for capital improvement programs, changes in
applicable laws and regulations, changes in technology which may
render existing plants, equipment or products obsolete, the
effects of energy conservation and operating constraints, and
increased costs and delays associated with compliance with
environmental regulations. In particular, regulatory changes
with respect to nuclear and conventionally-fueled power
generating facilities could increase costs or impair the ability
of utility companies to operate such facilities or obtain
adequate return on invested capital. Generally, prices charged
by utilities are regulated in the United States and in foreign
countries with the intention of protecting the public while
ensuring that utility companies earn a return sufficient to allow
them to attract capital in order to grow and continue to provide
appropriate services. There can be no assurance that such
pricing policies or rates of return will continue in the future.

In recent years, regulatory changes in the United States have
increasingly allowed utility companies to provide services and
products outside their traditional geographic areas and lines of
business, creating new areas of competition within the utilities
industries. This trend toward deregulation and the emergence of
new entrants have caused non-regulated providers of utility
services to become a significant part of the utilities
industries. Putnam Management believes that the emergence of
competition and deregulation will result in certain utility
companies being able to earn more than their traditional
regulated rates of return, while others may be forced to defend
their core business from increased competition and may be less
profitable. Although Putnam Management seeks to take advantage
of favorable investment opportunities that may arise from these
structural changes, there can be no assurance that the fund will
benefit from any such changes.

Investments in securities rated BBB or Baa have speculative
characteristics, and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of
the issuer to make principal and interest payments than would
likely be the case with investments in securities with higher
credit ratings. The fund will not necessarily dispose of a
security when its rating is reduced below its rating at the time
of purchase, although Putnam Management will monitor the
investment to determine whether continued investment in the
security would serve the fund's investment objective.

The fund is "non-diversified." This means that it may invest its
assets in a limited number of issuers. In order to qualify as a
"regulated investment company" under the Internal Revenue Code
(see "How the Trust makes distributions to shareholders; tax
information" below), the fund generally may not invest more than
25% of its total assets in obligations of any one issuer other
than U.S. government securities and, with respect to 50% of its
total assets, the fund may not invest more than 5% of its total
assets in the securities of any one issuer (except U.S.
government securities). Thus the fund may invest up to 25% of
its total assets in the securities of each of any two issuers.
Because of the limited number of issuers in the public utilities
industries, the fund is more likely to invest a higher percentage
of its assets in the securities of a single issuer than an
investment company which invests in a broad range of industries.
This practice involves an increased risk of loss to the fund if
the issuer is unable to make interest or principal payments or if
the market value of such securities were to decline.

Putnam VT Utilities Growth and Income Fund will generally be
managed in a style similar to that of Putnam Utilities Growth and
Income Fund. Because the latter fund is "diversified,"
however, Putnam VT Utilities Growth and Income Fund's portfolio
may consist of securities of a smaller number of issuers than the
portfolio of that fund.

PUTNAM VT VISTA FUND

Putnam VT Vista Fund seeks capital appreciation. It is designed
for investors seeking above-average capital growth potential,
which involves certain risks.

The fund invests in a diversified portfolio of common stocks
which Putnam Management believes have the potential for
above-average capital appreciation. These may include widely-
traded common stocks of larger companies as well as common stocks
of smaller, less well known companies. In selecting common
stocks for the fund, Putnam Management will consider, among other
things, an issuer's financial strength, competitive position,
projected future earnings and dividends, and other investment
criteria. Current income will be only an incidental
consideration in the selection of investments.

Investment opportunities may be sought among securities of large,
widely traded companies as well as securities of smaller, less
well - known companies. Smaller companies may present
greater opportunities for capital appreciation, but may also
involve greater risks. They may have limited product lines,
markets or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and
in limited volume. As a result, the prices of these securities
may fluctuate more than prices of securities of larger, more
established companies.

The fund may invest principally in the common stocks of medium-
sized companies, with market capitalizations from $300 million to
$5 billion, often referred to as "midcap stocks." While midcap
stocks usually involve less risk than the stocks of smaller
capitalization companies, midcap stocks usually involve greater
risk than the stocks of larger, more mature companies. At times
markets may favor both the relative safety of larger
capitalization stocks and the greater growth potential of smaller
capitalization stocks over midcap stocks.

The fund may at times invest a portion of its assets in common
stocks Putnam Management believes are significantly undervalued.
In selecting such common stocks, Putnam Management will focus on
industries and issuers it considers to have particular
possibilities for long-term capital appreciation due to potential
growth of earnings which, in the judgment of Putnam Management,
is not fully reflected in current market prices. In selecting
undervalued securities, Putnam Management may make investment
judgments contrary to those of most investors.

Although common stocks are normally the fund's main
investments , the fund may purchase preferred stocks, debt
securities, convertible securities (both bonds and preferred
stocks) and warrants if Putnam Management believes they would
help achieve the fund's objective of capital appreciation. The
fund may purchase debt securities rated at the time of purchase
at least C by a nationally recognized securities rating
agency, such as S&P or Moody's, and unrated securities
determined by Putnam Management to be of comparable quality.
Securities in the lower-rated categories are considered to be
primarily speculative and may be in default. The risks
associated with fixed-income securities, including lower-rated
fixed-income securities (commonly known as "junk bonds"), are
discussed below under "Common investment policies and techniques
- -- Lower-rated and other fixed-income securities." The
foregoing investment limitations will be measured at the time
of purchase and, to the extent that a security is assigned a
different rating by one or more of the various rating agencies,
Putnam Management will use the highest rating assigned by any
agency. The fund may also hold a portion of its assets in
cash or money market instruments and may invest up to 20% of its
assets in foreign securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques --Foreign investments."

The fund may also engage in foreign currency exchange
transactions and transactions in futures and options, enter into
repurchase agreements, loan its portfolio securities and purchase
securities for future delivery. See "Common investment policies
and techniques" below for a discussion of these securities and
types of transactions and the risks associated with them. The
fund may engage in defensive strategies when Putnam Management
judges that conditions in the securities markets make pursuing
the fund's basic investment strategy inconsistent with the best
interests of the fund's shareholders. When pursuing such
defensive strategies, the fund may invest without limit in
securities primarily traded in U.S. markets. See "Common
investment policies and techniques" below for a discussion of
these strategies.

Putnam VT Vista Fund will generally be managed in a style similar
to Putnam Vista Fund.

PUTNAM VT VOYAGER FUND

Putnam VT Voyager Fund seeks capital appreciation. It is
designed for investors willing to assume above-average risk in
return for above-average capital growth potential. The fund
invests primarily in common stocks of companies that Putnam
Management believes have potential for capital appreciation that
is significantly greater than that of market averages. The fund
may also purchase convertible bonds, convertible preferred
stocks, warrants, preferred stocks and debt securities if Putnam
Management believes they would help achieve the fund's objective.
The fund may also hold a portion of its assets in cash and money
market instruments and may invest up to 20% of its assets in
foreign securities. For a discussion of the risks associated
with foreign investments, see "Common investment policies and
techniques -- Foreign investments." The fund may also engage in
foreign currency exchange transactions and transactions in
futures and options, enter into repurchase agreements, loan its
portfolio securities and purchase securities for future delivery.
See "Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The fund may engage in defensive
strategies when Putnam Management judges that conditions in the
securities markets make pursuing the fund's basic investment
strategy inconsistent with the best interests of the fund's
shareholders. See "Common investment policies and techniques"
below for a discussion of these strategies.
<PAGE>
The fund's investments may include widely-traded common stocks of
larger companies as well as common stocks of smaller, less well-
known issuers. The fund generally invests a portion of its
assets in the securities of small- to medium-sized companies with
equity market capitalizations of less than $3 billion. Investing
in these companies may present greater opportunities for capital
appreciation, but may also involve greater risk. They may have
limited product lines, markets or financial resources, or may
depend on a limited management group. Their securities may trade
less frequently and in limited volume and only in the over-the-
counter market or on a regional securities exchange. As a
result, these securities may fluctuate in value more than
securities of larger, more established companies.

Putnam VT Voyager Fund will generally be managed in a style
similar to Putnam Voyager Fund.

GENERAL

As indicated above, certain of the funds are generally managed in
styles similar to other open-end investment companies which are
managed by Putnam Management and whose shares are generally
offered to the public. These other Putnam funds may, however,
employ different investment practices and may invest in
securities different from those in which their counterpart funds
invest, and consequently will not have identical portfolios or
experience identical investment results.

COMMON INVESTMENT POLICIES AND TECHNIQUES

Diversification policies

Each fund (other than Putnam Diversified Income Fund) is a
"diversified" investment company under the Investment Company Act
of 1940. This means that with respect to 75% of its total assets
a fund may not invest more than 5% of its total assets in the
securities of any one issuer (except U.S. government securities).
The remaining 25% of its total assets is not subject to this
restriction. To the extent a fund invests a significant portion
of its assets in the securities of a particular issuer, it will
be subject to an increased risk of loss if the market value of
such issuer's securities declines.

Limiting investment risk

Specific investment restrictions help to limit investment risks
for each fund's shareholders. These restrictions prohibit a fund
with respect to 75% of its total assets (with respect to 50% of
its total assets in the case of Putnam VT Utilities Growth and
Income Fund,) more than 10% of the voting securities of any one
issuer.* They also prohibit a fund from investing more than:

(a) (with respect to 75% of total assets for all funds other than
Putnam VT Utilities Growth and Income Fund and with respect to
50% of its total assets for Putnam VT Utilities Growth and Income
Fund) 5% of its total assets in securities of any one issuer
other than the U.S. government;*

(b) 25% of its total assets in any one industry (other than
securities of the U.S. government, its agencies or
instrumentalities); except that Putnam VT Utilities Growth and
Income Fund may invest more than 25% of its assets in any of the
public utilities industries; and except that Putnam VT Money
Market Fund may invest more than 25% of its assets in (i) the
banking industry, (ii) the personal credit institution or
business credit institution industries or (iii) any combination
of the above, when, in the opinion of Putnam Management yield
differentials make such investments desirable.*

(c) 15% of its net assets in any combination of securities that
are not readily marketable, in securities restricted as to resale
(excluding securities determined by the Trustees (or the person
designated by the Trustees to make such determinations) to be
readily marketable), and in repurchase agreements maturing in
more than seven days.

Restrictions marked with an asterisk (*) above are summaries of
fundamental policies. See the SAI for the full text of these
policies and other fundamental policies. Except for investment
policies designated as fundamental in this prospectus or the SAI,
the investment policies described in this prospectus and in the
SAI are not fundamental policies. The Trustees may change any
non-fundamental investment policy without shareholder approval.
As a matter of policy, the Trustees would not materially change
the fund's investment objective without shareholder approval.

Defensive strategies

At times, Putnam Management may judge that conditions in the
securities markets make pursuing a fund's basic investment
strategy inconsistent with the best interests of its
shareholders. At such times, Putnam Management may temporarily
use alternative strategies , primarily designed to reduce
fluctuations in the value of fund assets.

In implementing these defensive strategies, a fund may invest
without limit in cash or cash equivalents, money-market
instruments, short-term bank obligations, high-rated fixed-income
securities or preferred stocks or in any other securities
Putnam Management considers consistent with such defensive
strategies.

It is impossible to predict when, or for how long, these
alternative strategies would be used.

Portfolio turnover

The length of time a fund has held a particular security is not
generally a consideration in investment decisions. A change in
the securities held by a fund is known as "portfolio turnover."
As a result of a fund's investment policies, under certain market
conditions its portfolio turnover rate may be higher than that of
other mutual funds.

Portfolio turnover generally involves some expense, including
brokerage commissions or dealer markups and other transaction
costs on the sale of securities and reinvestment in other
securities. These transactions may result in realization of
taxable capital gains. Portfolio turnover rates for the life of
each fund (other than Putnam VT International Growth Fund, Putnam
VT International Growth and Income Fund, Putnam VT International
New Opportunities Fund, Putnam VT New Value Fund and Putnam VT
Vista Fund, each of which commenced operations after January 1,
1997) are shown in the section "Financial highlights." While it
is impossible to predict a fund's portfolio turnover rate, Putnam
Management, based on its experience, believes that such rate will
not exceed 100% for Putnam VT International Growth Fund, 150% for
Putnam VT International Growth and Income Fund, 200% for Putnam
VT International New Opportunities Fund, 200% for Putnam VT New
Value Fund and 100% for Putnam VT Vista Fund.

Investments in premium securities

To the extent described above, certain of the funds may invest in
securities bearing coupon rates higher than prevailing market
rates. Such "premium" securities are typically purchased at
prices greater than the principal amounts payable on maturity.

A fund does not amortize the premium paid for these securities in
calculating its net investment income. As a result, the purchase
of premium securities provides a higher level of investment
income distributable to shareholders on a current basis than if
the fund purchased securities bearing current market rates of
interest. Because the value of premium securities tends to
approach the principal amount as they approach maturity (or call
price in the case of securities approaching their first call
date), the purchase of such securities may increase the fund's
risk of capital loss if such securities are held to maturity (or
first call date).

During a period of declining interest rates, many of a fund's
portfolio investments will likely bear coupon rates that are
higher than current market rates, regardless of whether such
securities were originally purchased at a premium. These
securities would generally carry premium market values that would
be reflected in the net asset value of fund shares. As a result,
an investor who purchases fund shares during such periods would
initially receive higher taxable monthly distributions (derived
from the higher coupon rates payable on a fund's investments)
than might be available from alternative investments bearing
current market interest rates, but the investor may face an
increased risk of capital loss as these higher coupon securities
approach maturity (or first call date). In evaluating the
potential performance of an investment in a fund, investors may
find it useful to compare the fund's current dividend rate with
its "yield," which is computed on a yield-to-maturity basis in
accordance with SEC regulations and which reflects amortization
of market premiums. See "How performance is shown."

Foreign investments

Each fund may invest in securities of foreign issuers
that are not actively traded in U.S. markets.
These foreign investments involve certain special risks
described below.

Investments in foreign securities may subject a fund to other
risks as well. For example, there may be less information
publicly available about a foreign issuer than about a
U.S. issuer, and foreign issuers are not generally
subject to accounting, auditing and financial reporting
standards and practices comparable to those in the United
States. The securities of some foreign issuers
are less liquid and at times more volatile than securities of
comparable U.S. issuers . Foreign brokerage commissions
and other fees are also generally higher than in the
United States. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in payment
or delivery of securities or in the recovery of the fund's
assets held abroad) and expenses not present in the settlement of
investments in U.S. markets .

In addition, a fund's investments in foreign securities may be
subject to the risk of nationalization or expropriation of
assets, imposition of currency exchange controls or
restrictions on the repatriation of foreign currency ,
confiscatory taxation, political or financial instability and
diplomatic developments which could affect the value of
the fund's investments in certain foreign countries.
Dividends or interest on, or proceeds from the sale of,
foreign securities may be subject to foreign withholding taxes,
and special U.S. tax considerations may apply.

Legal remedies available to investors in certain foreign
countries may be more limited than those available with
respect to investments in the United States or in other foreign
countries . The laws of some foreign countries may limit a
fund's ability to invest in securities of certain issuers
organized under the laws of those foreign countries.

The risks described above are typically increased in
connection with investments in less developed and developing
nations, which are sometimes referred to as "emerging
markets." For example, political and economic structures
in these countries may be in their infancy and developing
rapidly, causing instability. High rates of inflation or
currency devaluations may adversely affect the
economies and securities markets of such countries.
Investments in emerging markets may be considered speculative.

Each fund expects that its investments in foreign
securities generally will not exceed the percentage of its total
assets indicated above in its relevant section, although its
investments in foreign securities may exceed this
amount from time to time. Certain of the foregoing risks may
also apply to some extent to securities of U.S. issuers that are
denominated in foreign currencies or that are traded in foreign
markets, or securities of U.S. issuers having significant
foreign operations.

For more information about foreign securities and the risks
associated with investment in such securities, see
the SAI.

Foreign currency exchange transactions

To the extent described above, certain of the funds may engage in
foreign currency exchange transactions to protect against
uncertainty in the level of future exchange rates. Putnam
Management may engage in foreign currency exchange
transactions in connection with the purchase and sale of
portfolio securities ("transaction hedging") and to
protect against changes in the value of specific portfolio
positions ("position hedging").

A fund may engage in transaction hedging to protect against a
change in foreign currency exchange rates between the date on
which the fund contracts to purchase or sell a security and the
settlement date, or to "lock in" the U.S. dollar equivalent of a
dividend or interest payment in a foreign currency. A fund may
also purchase or sell a foreign currency on a spot (or cash)
basis at the prevailing spot rate in connection with the
settlement of transactions in portfolio securities denominated in
that foreign currency.

If conditions warrant, for transaction hedging purposes, a fund
may also enter into contracts to purchase or sell foreign
currencies at a future date ("forward contracts") and may
purchase and sell foreign currency futures contracts. A foreign
currency forward contract is a negotiated agreement to exchange
currency at a future time at a rate or rates that may be higher
or lower than the spot rate. Foreign currency futures contracts
are standardized exchange-traded contracts and have margin
requirements. In addition, for transaction hedging purposes, a
fund may also purchase or sell exchange-listed and over-the-
counter call and put options on foreign currency futures
contracts and on foreign currencies.

A fund may engage in position hedging to protect against a
decline in the value relative to the U.S. dollar of the
currencies in which its portfolio securities are denominated or
quoted (or an increase in the value of the currency in which
securities the fund intends to buy are denominated, when the fund
holds cash or short-term investments). For position hedging
purposes, a fund may purchase or sell foreign currency futures
contracts, foreign currency forward contracts and options on
foreign currency futures contracts and on foreign currencies on
exchanges or in over-the-counter markets. In connection with
position hedging, a fund may also purchase or sell foreign
currency on a spot basis.

A fund's currency hedging transactions may call for the delivery
of one foreign currency in exchange for another foreign currency
and may at times not involve currencies in which its portfolio
securities are then denominated. Putnam Management will engage
in such "cross hedging" activities when it believes that such
transactions provide significant hedging opportunities for a
fund. Cross hedging transactions by a fund involve the risk of
imperfect correlation between changes in the values of the
currencies to which such transactions relate and changes in the
value of the currency or other asset or liability which is the
subject of the hedge.

The decision as to whether and to what extent a fund will engage
in foreign currency exchange transactions will depend on a number
of factors, including prevailing market conditions, the
composition of a fund's portfolio and the availability of
suitable transactions. Accordingly, there can be no assurance
that a fund will engage in foreign currency exchange transactions
at any given time or from time to time. See the SAI.

For a further discussion of the risks associated with
purchasing and selling futures contracts and
options, see "Futures and options." The SAI also contains
additional information concerning a fund's use of
foreign currency exchange transactions .

Futures and options

Futures and options on futures. To the extent described above,
each fund may buy and sell stock index futures
contracts ("index futures"). An "index future" is a contract to
buy or sell units of a particular stock index at an agreed price
on a specified future date. Depending on the change in value of
the index between the time a fund enters into and terminates an
index futures transaction, the fund realizes a gain or loss.
A fund may also, to the extent consistent with its
investment objectives and policies, buy and sell call
and put options on index futures or stock indexes. A
fund may engage in index futures and options transactions for
hedging purposes and for nonhedging purposes, such as to adjust
its exposure to relevant markets or as a substitute for direct
investment. In addition, if a fund's investment policies permit
it to invest in foreign securities, such fund may invest in
futures and options on foreign securities, for hedging purposes
and for nonhedging purposes. The use of index futures and
related options involves certain special risks. Futures and
options transactions involve costs and may result in losses.

To the extent described above, each fund may also buy and sell
futures contracts and related options with respect to U.S.
government securities and options directly on U.S. government
securities. Putnam Management believes that, under certain market
conditions, price movements in U.S. government securities futures
and related options may correlate closely with securities in
which such funds may invest and may, as a result, provide hedging
opportunities for the funds. Such funds may engage in
U.S. government securities futures and related options
transactions for hedging purposes and for nonhedging purposes,
such as to substitute for direct investment or to manage their
effective duration. Duration is a commonly used measure of the
longevity of debt instruments.

Options. As described above, certain of the funds may, to the
extent consistent with their investment objectives and policies,
seek to increase current return by writing covered call and put
options on securities such funds own or in which they may invest.
A fund receives a premium from writing a call or put option,
which increases the return if the option expires unexercised or
is closed out at a net profit.

When a fund writes a call option, it gives up the opportunity to
profit from any increase in the price of a security above the
exercise price of the option; when it writes a put option,
it takes the risk that it will be required to purchase a
security from the option holder at a price above the current
market price of the security. A fund may terminate an
option that it has written prior to its expiration by entering
into a closing purchase transaction in which it purchases an
option having the same terms as the option written.

A fund may also, to the extent consistent with its
investment objectives and policies, buy and sell put and call
options , including combinations of put and call options
on the same underlying security . The aggregate value of
the securities underlying the options may not exceed 25% of
fund assets. The use of these strategies may be limited
by applicable law.

Risks related to options and futures strategies

Options and futures transactions involve costs and may result in
losses. The effective use of options and futures strategies
depends on a fund's ability to terminate its options and futures
positions at times when Putnam Management deems it desirable to
do so. Although a fund will enter into an option or futures
contract position only if Putnam Management believes that a
liquid secondary market exists for such option or futures
contract, there is no assurance that the fund will be able to
effect closing transactions at any particular time or at an
acceptable price. Options on certain U.S. government securities
are traded in significant volume on securities exchanges.
However, other options which a fund may purchase or sell are
traded in the "over-the-counter" market rather than on an
exchange. This means that a fund will enter into such option
contracts with particular securities dealers who make markets in
these options. A fund's ability to terminate options positions
established in the over-the-counter market may be more
limited than for exchange-traded options and may also involve the
risk that securities dealers participating in such transactions
would fail to meet their obligations to the fund.
Certain provisions of the Internal Revenue Code and certain
regulatory requirements may limit the use of index futures and
options transactions.

The use of options and futures strategies also involves the risk
of imperfect correlation among movements in the values of the
securities, currencies or indexes underlying the futures and
options purchased and sold by a fund, of the option or futures
contract itself, and of the securities or currencies which are
the subject of a hedge. The successful use of these strategies
further depends on the ability of Putnam Management to forecast
interest rates and market movements correctly.

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the SAI.

Lower-rated and other fixed-income securities

As described above, certain of the funds may invest in lower-
rated fixed-income securities (commonly known as "junk bonds").
Differing yields on fixed-income securities of the same maturity
are a function of several factors, including the relative
financial strength of the issuers. Higher yields are generally
available from securities in the lower rating categories of a
nationally recognized rating agency (below Baa or BBB)
or from unrated securities of comparable quality. Securities
rated below Baa or BBB are considered to be of poor
standing and predominantly speculative. The rating services'
descriptions of securities in the lower rating categories,
including their speculative characteristics, are set forth in the
Appendix to this prospectus.

Securities ratings are based largely on the issuer's historical
financial condition and the rating agencies' investment analysis
at the time of rating. Consequently, the rating assigned to any
particular security is not necessarily a reflection of the
issuer's current financial condition, which may be better or
worse than the rating would indicate. Although Putnam Management
considers security ratings when making investment decisions, it
performs its own investment analysis and does not rely
principally on the ratings assigned by the rating services.
Putnam Management's analysis may include consideration of the
issuer's experience and managerial strength, changing financial
condition, borrowing requirements or debt maturity schedules, and
its responsiveness to changes in business conditions and interest
rates. It also considers relative values based on anticipated
cash flow, interest or dividend coverage, asset coverage and
earning prospects.

At times, a substantial portion of fund assets may be invested in
securities as to which the fund, by itself or together with other
funds and accounts managed by Putnam Management and its
affiliates, holds all or a major portion. Under adverse market
or economic conditions or in the event of adverse changes in the
financial condition of the issuer, it may be more
difficult to sell these securities when Putnam Management
believes it advisable to do so , or a fund may be
able to sell the securities only at prices lower than if they
were more widely held. Under these circumstances, it may also be
more difficult to determine the fair value of such securities for
purposes of computing a fund's net asset value.

In order to enforce its rights in the event of a default of these
securities, a fund may be required to participate in various
legal proceedings or take possession of and manage assets
securing the issuer's obligations on the securities. This could
increase fund operating expenses and adversely affect
its net asset value.

The values of fixed-income securities
fluctuate in response to changes in interest rates. A
decrease in interest rates will generally result in an increase
in the value of fund assets. Conversely, during periods
of rising interest rates, the value of fund assets will
generally decline. The magnitude of these fluctuations
generally is greater for securities with longer
maturities . However, the yields on such securities are also
generally higher. In addition, the values of fixed-income
securities are affected by changes in general economic
and business conditions affecting the specific industries
of their issuers.
<PAGE>
Changes by recognized rating services in their ratings of
a fixed-income security and changes in the ability
of an issuer to make payments of interest and principal may also
affect the value of these investments. Changes in the value of
portfolio securities generally will not affect income derived
from these securities, but will affect a fund's net asset
value.

Investors should carefully consider their ability to assume the
risks of owning shares of a mutual fund which invests in
lower-rated securities before allocating a portion of their
insurance investment to a fund that invests in such
securities.

The lower ratings of certain securities held by a fund
reflect a greater possibility that adverse changes in the
financial condition of the issuer or in general economic
conditions, or both, or an unanticipated rise in interest rates,
may impair the ability of the issuer to make payments of interest
and principal.

The inability (or perceived inability) of issuers to make
timely payments of interest and principal would likely make the
values of securities held by a fund more volatile and could limit
the fund's ability to sell its securities at prices approximating
the values placed on such securities. In the absence of
a liquid trading market for its portfolio securities
, a fund at times may be unable to
establish the fair value of such securities.

The rating assigned to a security by a nationally
recognized securities rating agency, such as Moody's or S&P
does not reflect an assessment of the volatility of the
security's market value or of the liquidity of an investment in
the security.

Putnam Management seeks to minimize the risks of investing in
lower-rated securities through careful investment analysis. When
a fund invests in securities in the lower rating categories, the
achievement of the fund's goals is more dependent on Putnam
Management's ability than would be the case if the fund were
investing in securities in the higher rating categories.

A fund will not necessarily dispose of a security when its
rating is reduced below its rating at the time of purchase.
However, Putnam Management will monitor the investment to
determine whether continued investment in the security will
assist in meeting a fund's investment objective.

At times, a substantial portion of fund assets may be invested in
securities as to which a fund, by itself or together with other
funds and accounts managed by Putnam Management or its
affiliates, holds all or a major portion. Under adverse market
or economic conditions or in the event of adverse changes in the
financial condition of the issuer, it may be more difficult to
sell these securities when Putnam Management believes it
advisable to do so or the fund may be able to sell the securities
only at prices lower than if they were more widely held. Under
these circumstances, it may also be more difficult to determine
the fair value of such securities for purposes of computing the
fund's net asset value.

Certain securities held by a fund may permit the issuer at its
option to "call," or redeem, its securities. If an issuer were
to redeem securities held by a fund during a time of declining
interest rates, the fund may not be able to reinvest the proceeds
in securities providing the same investment return as the
securities redeemed.

A fund at times may invest in so-called "zero-
coupon" bonds and "payment-in-kind" bonds. Zero-coupon bonds are
issued at a significant discount from their principal amount and
pay interest only at maturity rather than at intervals during the
life of the security. Payment-in-kind bonds allow the issuer, at
its option, to make current interest payments on the bonds either
in cash or in additional bonds. Both zero-coupon bonds and
payment-in-kind bonds allow an issuer to avoid the need to
generate cash to meet current interest payments. Accordingly,
such bonds may involve greater credit risks than bonds that pay
interest in cash currently. The values of zero-coupon bonds
and payment-in-kind bonds are subject to greater fluctuation in
response to changes in market interest rates than bonds which pay
interest in cash currently.

Even though such bonds do not pay current interest in
cash, a fund is nonetheless required to accrue interest income on
these investments and to distribute the interest
income on a current basis . Thus, a fund could be
required at times to liquidate other investments in order
to satisfy its distribution requirements.

Certain investment grade securities in which a fund may invest
share some of the risk factors discussed above with respect to
lower-rated securities.

Each fund (other than Putnam VT Money Market Fund) may invest up
to 15% of its assets in illiquid securities. Putnam Management
believes that opportunities to earn high yields may exist from
time to time in securities which are illiquid and which may be
considered speculative. The sale of these securities is usually
restricted under federal securities laws. As a result of
illiquidity, the fund may not be able to sell these securities
when Putnam Management considers it desirable to do so or may
have to sell them at less than fair market value.

Mortgage-backed and asset-backed securities

As described above, certain of the funds may invest in asset-
backed and mortgage-backed securities, such as CMOs and certain
stripped mortgage-backed securities. CMOs and other mortgage-
backed securities represent participations in, or are secured by,
mortgage loans and include:

- - Certain securities issued or guaranteed by the U.S. government
or one of its agencies or instrumentalities;

- - Securities issued by private issuers that represent an interest
in or are secured by mortgage-backed securities issued or
guaranteed by the U.S. government or one of its agencies or
instrumentalities; and

- - Securities issued by private issuers that represent an interest
in or are secured by mortgage loans or mortgage-backed
securities without a government guarantee but usually having
some form of private credit enhancement.

Stripped mortgage-backed securities are usually structured with
two classes that receive different portions of the interest and
principal distributions on a pool of mortgage loans. A fund may
invest in both the interest-only or "IO" class and the
principal-only or "PO" class.

Each fund may also invest in asset-backed securities. Asset-
backed securities are structured like mortgage-backed securities,
but instead of mortgage loans or interests in mortgage loans, the
underlying assets may include such items as motor vehicle
installment sales or installment loan contracts, leases of
various types of real and personal property, and receivables from
credit card agreements. The ability of an issuer of asset-backed
securities to enforce its security interest in the underlying
assets may be limited.

Mortgage-backed and asset-backed securities have yield and
maturity characteristics corresponding to the underlying assets.
Unlike traditional debt securities, which may pay a fixed rate of
interest until maturity when the entire principal amount comes
due, payments on certain mortgage-backed and asset-backed
securities include both interest and a partial payment of
principal. Besides the scheduled repayment of principal,
payments of principal may result from the voluntary prepayment,
refinancing, or foreclosure of the underlying mortgage loans or
other assets.

Mortgage-backed and asset-backed securities are less effective
than other types of securities as a means of "locking in"
attractive long-term interest rates. One reason is the need to
reinvest prepayments of principal; another is the possibility of
significant unscheduled prepayments resulting from declines in
interest rates. These prepayments would have to be reinvested at
lower rates. As a result, these securities may have less
potential for capital appreciation during periods of declining
interest rates than other securities of comparable maturities,
although they may have a similar risk of decline in market value
during periods of rising interest rates. Prepayments may also
significantly shorten the effective maturities of these
securities, especially during periods of declining interest
rates. Conversely, during periods of rising interest rates, a
reduction in prepayments may increase the effective maturities of
these securities, subjecting them to a greater risk of decline in
market value in response to rising interest rates than
traditional debt securities, and, therefore, potentially
increasing the volatility of a fund.

Prepayments may cause losses on securities purchased at a
premium. At times, some of the mortgage-backed and asset-backed
securities in which a fund may invest will have higher than
market interest rates and therefore will be purchased at a
premium above their par value. Unscheduled prepayments, which
are made at par, will cause a fund to experience a loss equal to
any unamortized premium.

CMOs are issued with a number of classes or series that have
different maturities and that may represent interests in some or
all of the interest or principal on the underlying collateral.
Payment of interest or principal on some classes or series of
CMOs may be subject to contingencies or some classes or series
may bear some or all of the risk of default on the underlying
mortgages. CMOs of different classes or series are generally
retired in sequence as the underlying mortgage loans in the
mortgage pool are repaid. If enough mortgages are repaid ahead
of schedule, the classes or series of a CMO with the earliest
maturities generally will be retired prior to their maturities.
Thus, the early retirement of particular classes or series of a
CMO would have the same effect as the prepayment of mortgages
underlying other mortgage-backed securities. Conversely, slower
than anticipated prepayments can extend the effective maturities
of CMOs, subjecting them to a greater risk of decline in market
value in response to rising interest rates than traditional debt
securities, and, therefore, potentially increasing the volatility
of a fund.

The yield to maturity on an IO or PO class of stripped mortgage-
backed securities is extremely sensitive not only to changes in
prevailing interest rates but also to the rate of principal
payments (including prepayments) on the underlying assets. A
rapid rate of principal prepayments may have a measurably adverse
effect on a fund's yield to maturity to the extent it invests in
IOs. If the assets underlying the IOs experience greater
than anticipated prepayments of principal, a fund may fail to
recoup fully its initial investment in these securities.
Conversely, POs tend to increase in value if prepayments are
greater than anticipated and decline if prepayments are slower
than anticipated.

In either event, the secondary market for stripped mortgage-
backed securities may be more volatile and less liquid than that
for other mortgage-backed securities, potentially limiting a
fund's ability to buy or sell those securities at any particular
time.
<PAGE>
Securities loans, repurchase agreements and forward commitments.
A fund may lend portfolio securities amounting to not more
than 25% of its assets to broker-dealers and may enter into
repurchase agreements on up to 25% of its assets . These
transactions must be fully collateralized at all times. A
fund (other than Putnam VT Money Market Fund) may also purchase
securities for future delivery, which may increase its overall
investment exposure and involves a risk of loss if the value of
the securities declines prior to the settlement date. These
transactions involve some risk if the other party should default
on its obligation and a fund is delayed or prevented from
recovering the collateral or completing the transaction.

Derivatives

Certain of the instruments in which each fund (except Putnam VT
Money Market Fund) may invest, such as futures contracts,
options, forward contracts and CMOs, are considered to be
"derivatives." Derivatives are financial instruments whose value
depends upon, or is derived from, the value of an underlying
asset, such as a security or an index. Further information about
these instruments and the risks involved in their use is included
elsewhere in this prospectus and in the SAI.

HOW PERFORMANCE IS SHOWN

Fund advertisements may, from time to time, include performance
information. For funds other than Putnam VT Money Market Fund,
"yield" is calculated by dividing the annualized net
investment income per share during a recent 30-day period by the
maximum public offering price per share on the last day of that
period.

For purposes of calculating yield, net investment income is
calculated in accordance with SEC regulations and may differ from
net investment income as determined for tax purposes. SEC
regulations require that net investment income be calculated on a
"yield-to-maturity" basis, which has the effect of amortizing any
premiums or discounts in the current market value of fixed-income
securities. The current dividend rate is based on net investment
income as determined for tax purposes, which may not reflect
amortization in the same manner. See "Common investment policies
and techniques -- Investments in premium securities." For Putnam
VT Money Market Fund, "yield" represents an annualization of the
change in value of an investment (excluding any capital changes)
in the fund for a specific seven-day period; "effective yield"
compounds that yield for a year and is, for that reason, greater
than the fund's yield.

"Total return" for the one-, five- and ten-year periods (or for
the life of a fund, if shorter) through the most recent calendar
quarter represents the average annual compounded rate of return
on an investment of $1,000 in a fund. Total return may
also be presented for other periods.
<PAGE>
All data are based on past investment results and do not predict
future performance. Investment performance, which will vary, is
based on many factors, including market conditions, portfolio
composition and fund operating expenses. Investment performance
also often reflects the risks associated with a fund's investment
objective or objectives and policies. These factors should be
considered when comparing a fund's investment results with those
of other mutual funds and other investment vehicles.

Quotations of investment performance for any period when an
expense limitation was in effect will be greater than if the
limitation had not been in effect. Fund performance may be
compared to that of various indexes. See the SAI.

Performance information presented for the funds should not be
compared directly with performance information of other insurance
products without taking into account insurance-related charges
and expenses payable with respect to these insurance products.
Insurance related charges and expenses are not reflected in the
funds' performance information. As a result of such insurance-
related charges and expenses, an investor's return under the
insurance product would be lower.

For performance information through the funds' most recent fiscal
year, see "Investment Performance of the Trust" in the SAI.

HOW THE TRUST IS MANAGED

The Trustees are responsible for generally overseeing the conduct
of Trust business. Subject to such policies as the
Trustees may determine, Putnam Management furnishes a continuing
investment program for the Trust and makes investment decisions
on its behalf. Subject to the control of the Trustees, Putnam
Management also manages the Trust's other affairs and business.

The Trust pays Putnam Management a quarterly fee for these
services based on average net assets. See the SAI.

Putnam Management's Global Asset Allocation Committee has
primary responsibility for the day-to-day management of Putnam VT
Global Asset Allocation Fund.

The following officers of Putnam Management have had primary
responsibility for the day-to-day management of the indicated
funds' portfolios since the years stated below:
<PAGE>
Business experience
Fund name Year (at least 5 years)
- --------------------- ------- -------------------------
Putnam VT Asia Pacific
Growth Fund

David K. Thomas 1995 Employed as an investment
Senior Vice President professional by Putnam
Management since 1987.

Putnam VT Diversified
Income Fund

William Kohli 1994 Employed as an investment
Managing Director professional by Putnam
Management since September,
1994. Prior to September,
1994, Mr. Kohli was Executive
Vice President, and Co-
Director of Global Bond
Management and, prior to
October, 1993, Mr. Kohli was
Senior Portfolio Manager at
Franklin Advisors/Templeton
Investment Counsel.

Michael Martino 1994 Employed as an investment
Managing Director professional by Putnam
Management since January,
1994. Prior to January, 1994,
Mr. Martino was employed by
Back Bay Advisors in the
positions of Executive Vice
President and Chief Investment
Officer .

Jennifer E. Leichter 1993 Employed as an investment
Senior Vice President professional by Putnam
Management since 1987.

Gail S. Attridge 1997 Employed as an investment
Vice President professional by Putnam
Management since
November , 1993. Prior to November,
1993, Ms. Attridge was an
Analyst at Keystone
Custody International .

Kenneth J. Taubes 1997 Employed as an investment
Senior Vice President
professional by Putnam
Management June, 1991.

<PAGE>
Putnam VT Global
Growth Fund

Anthony W. Regan 1996 Employed as an investment
Senior Managing Director professional by Putnam
Management since 1987.

Carol C. McMullen 1995 Employed as an investment
Managing Director professional by Putnam
Management since June, 1995.
Prior to June, 1995, Ms.
McMullen was Senior Vice
President of Baring Asset
Management.

C. Kim Goodwin 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since May, 1996.
Prior to May, 1996 Ms. Goodwin
was Vice President at
Prudential Mutual Fund
Investment Management, and
prior to February, 1993, Ms.
Goodwin was Assistant Vice
President at Mellon Bank
Corporation.

Ami T. Kuan 1996 Employed as an investment
Vice President professional by Putnam
Management since April, 1993.
Prior to April, 1993, Ms. Kuan
attended the MIT Sloan School
of Management.

Robert Swift 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since August, 1995.
Prior to August, 1995, Mr.
Swift was Director and Senior
Portfolio Manager at IAI
International/Hill Samuel
Investment Advisors.

Kelly A. Morgan 1997 Employed as an investment
Senior Vice President professional by Putnam
Management since December,
1996. Prior to December, 1996
Ms. Morgan was Senior Vice
President at Alliance Capital
Management.
<PAGE>
Putnam VT Growth and
Income Fund

Anthony I. Kreisel 1993 Employed as an investment
Managing Director professional by Putnam
Management since 1986.

David L. King 1993 Employed as an investment
Senior Vice President professional by Putnam
Management since 1983.

Putnam VT High
Yield Fund

Jin W. Ho 1996 Employed as an investment
Managing Director professional by Putnam
Management since 1983.

Putnam VT International
Growth Fund

Justin M. Scott 1996 Employed as an investment
Managing Director professional by Putnam
Management since 1988.

Omid Kamshad 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since January,
1996. Prior to January, 1996
Mr. Kamshad was Director of
Investments at Lombard Odier
International and prior to
April, 1995 he was Director at
Baring Asset Management
Company.

Putnam VT International
Growth and Income Fund

Justin M. Scott 1996 Employed as an investment
Managing Director professional by Putnam
Management since 1988.

Putnam VT International
New Opportunities Fund

Robert Swift 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since August, 1995.
Prior to August, 1995, Mr.
Swift was Director and
Senior Portfolio Manager
at IAI International/Hill
Samuel Investment Advisors.

J. Peter Grant 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since 1973.

Ami T. Kuan
1996 Employed as an investment
Vice President professional by Putnam
Management since April, 1993.
Prior to April, 1993, Ms.
Kuan attended the MIT
Sloan School of Management.

Putnam VT Money
Market Fund

Lindsey C. Strong 1992 Employed as an investment
Vice President professional by Putnam
Management since 1984.

Putnam VT New
Opportunities Fund

Carol C. McMullen 1996 Employed as an investment
Managing Director professional by Putnam
Management since June, 1995.
Prior to June, 1995, Ms.
McMullen was Senior Vice
President of Baring Asset
Management.

Daniel L. Miller 1994 Employed as an investment
Managing Director professional by Putnam
Management since 1983.

Putnam VT New
Value Fund

David L. King 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since 1983.

Putnam VT U.S.
Government and High
Quality Bond Fund

Kenneth J. Taubes 1993 Employed as an investment
Senior Vice President professional by Putnam
Management since 1991.

Putnam VT Utilities
Growth and Income Fund

Sheldon N. Simon 1992 Employed as an investment
Senior Vice President professional by Putnam
Management since 1984.

Christopher A. Ray 1995 Employed as an investment
Vice President professional by Putnam
Management since December,
1992. Prior to December,
1992, Mr. Ray was Vice
President and Portfolio
Manager at Scudder, Stevens &
Clark, Inc.

Putnam VT Vista Fund

Jennifer K. Silver 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since 1981.

C. Kim Goodwin 1996 Employed as an investment
Senior Vice President professional by Putnam
Management since May, 1996.
Prior to May, 1996, Ms.
Goodwin was Vice President at
Prudential Mutual Fund
Investment Management. Prior
to February, 1993, Ms. Goodwin
was Assistant Vice President
at Mellon Bank Corporation.

David J. Santos 1996 Employed as an investment
Vice President professional by Putnam
Management since 1986.

Anthony C. Santosus 1996 Employed as an investment
Vice President professional by Putnam
Management since 1985.

Putnam VT Voyager Fund

Roland W. Gillis 1995 Employed as an investment
Senior Vice President professional by Putnam
Management since March, 1995.
Prior to March, 1995, Mr.
Gillis was Vice President at
Keystone Custodian Funds, Inc.

Robert R. Beck 1995 Employed as an investment
Senior Vice President professional by Putnam
Management since 1989.
<PAGE>
Charles H. Swanberg 1994 Employed as an investment
Senior Vice President professional by Putnam
Management since 1984.

The Trust, on behalf of the funds, pays all expenses not assumed
by Putnam Management, including Trustees' fees and auditing,
legal, custodial, investor servicing and shareholder reporting
expenses. The Trust also reimburses Putnam Management for the
compensation and related expenses of certain officers of the
Trust and their staff who provide administrative services
. The total reimbursement is determined annually by the
Trustees.

Putnam Management places all orders for purchases and sales of
the securities of each fund. In selecting broker-dealers, Putnam
Management may consider research and brokerage services furnished
to it and its affiliates. Subject to seeking the most favorable
price and execution available, Putnam Management may consider, if
permitted by law, sales of shares of the other Putnam funds as a
factor in the selection of broker-dealers.

Expenses of the Trust directly charged or attributable to a fund
will be paid from the assets of that fund. General expenses
of the Trust will be allocated among and charged to the assets of
each fund on a basis that the Trustees deem fair and equitable,
which may be based on the relative assets of each fund or the
nature of the services performed and relative applicability to
each fund.

Expense Limitations. In order to limit the expenses of Putnam VT
International Growth Fund, Putnam VT International Growth and
Income Fund, Putnam VT International New Opportunities Fund,
Putnam VT New Value Fund and Putnam VT Vista Fund during their
start-up periods, Putnam Management has agreed to limit its
compensation (and, to the extent necessary, bear other expenses
of the funds) through December 31, 1997, to the extent that
expenses of the funds (exclusive of brokerage, interest, taxes,
and deferred organizational and extraordinary expenses) would
exceed the annual rate of 1.20%, 1.20%, 1.60%, 1.10% and 1.05%,
respectively, of the fund's average net assets.

For the purpose of determining any such limitation on Putnam
Management's compensation, expenses of the funds will not reflect
the application of commissions or cash management credits that
may reduce designated fund expenses.

With Trustee approval, any expense limitation may be terminated
earlier, in which event shareholders would be notified and this
prospectus would be revised.

The following table summarizes total expenses, including
management fees but excluding any separate-account related
charges and expenses, based on the most recent fiscal year (or,
for funds that have been in operation for less than a full year,
based on estimated expenses for the first full fiscal year) as a
percentage of each fund's average net assets :

Total Management
Expenses Fees

Putnam VT Asia Pacific Growth Fund 1.23% 0.80%
Putnam VT Diversified Income Fund 0.83% 0.70%
Putnam VT Global Asset Allocation Fund 0.83%
0.68%
Putnam VT Global Growth Fund 0.76% 0.60%
Putnam VT Growth and Income Fund 0.54%
0.49%
Putnam VT High Yield Fund 0.76%
0.68%
Putnam VT International Growth Fund 0.98% 0.80%
Putnam VT International Growth and
Income Fund 0.97% 0.80%
Putnam VT International New
Opportunities Fund 1.39% 1.20%
Putnam VT Money Market Fund * 0.55% 0.45%
Putnam VT New Opportunities Fund 0.72%
0.63%
Putnam VT New Value Fund 0.83% 0.70%
Putnam VT U.S. Government and High
Quality Bond Fund 0.69%
0.62%
Putnam VT Utilities Growth and
Income Fund** 0.78%
0.69%
Putnam VT Vista Fund 0.81% 0.65%
Putnam VT Voyager Fund 0.63%
0.57%

* Total expenses for Putnam VT Money Market
Fund have been restated to reflect the cost of
certain portfolio insurance purchased by the fund. See
"Putnam VT Money Market Fund --Insurance." Actual total
fund operating expenses were 0.53% .

** On July 11, 1996, shareholders approved an increase
in the fees payable to Putnam Management under the
Management Contract for Putnam VT Utilities Growth and
Income Fund. The management fees and total expenses shown
in the table have been restated to reflect the increase.
Actual management fees and total expenses were 0.64%
and 0.73% , respectively.

The expenses shown in the table do not reflect the application of
credits related to brokerage service and expense offset
arrangements that reduce certain fund expenses.

ORGANIZATION AND HISTORY

Putnam Variable Trust is a Massachusetts business trust organized
on September 24, 1987. A copy of the Agreement and Declaration
of Trust, which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of Massachusetts.
Prior to January 1, 1997, the Trust was known as Putnam Capital
Manager Trust.

The Trust is an open-end management investment company with an
unlimited number of authorized shares of beneficial interest.
Shares of the Trust may, without shareholder approval, be divided
into two or more series of shares representing separate
investment portfolios, and are currently divided into sixteen
series of shares, each representing a separate investment
portfolio which is being offered through separate accounts of
various insurance companies. Each portfolio is a diversified
investment company, except for Putnam VT Utilities Growth and
Income Fund, which is a non-diversified investment company.
Prior to January 1, 1997, Putnam VT Asia Pacific Growth Fund was
known as PCM Asia Pacific Growth Fund, Putnam VT Diversified
Income Fund was known as PCM Diversified Income Fund, Putnam VT
Global Asset Allocation Fund was known as PCM Global Asset
Allocation Fund, Putnam VT Global Growth Fund was known as PCM
Global Growth Fund, Putnam VT Growth and Income Fund was known as
PCM Growth and Income Fund, Putnam VT High Yield Fund was known
as PCM High Yield Fund, Putnam VT Money Market Fund was known as
PCM Money Market Fund, Putnam VT New Opportunities Fund was known
as PCM New Opportunities Fund, Putnam VT U.S. Government and High
Quality Growth Fund was known as PCM U.S. Government and High
Quality Growth Fund, Putnam VT Utilities Growth and Income Fund
was known as PCM Utilities Growth and Income Fund, and Putnam VT
Voyager Fund was known as PCM Voyager Fund. Until September 1,
1993, PCM Global Asset Allocation Fund was known as PCM Multi-
Strategy Fund. Shares vote by individual portfolio on all
matters except (i) when required by the Investment Company Act of
1940, shares of all portfolios shall be voted in the aggregate,
and (ii) when the Trustees have determined that the matter
affects only the interests of one or more portfolios, only the
shareholders of such portfolio or portfolios shall be entitled to
vote.

Each share has one vote, with fractional shares voting
proportionately. Shares are freely transferable, are
entitled to dividends as declared by the Trustees, and, if the
portfolio were liquidated, would receive the net assets of the
portfolio. The Trust may suspend the sale of shares of any
portfolio at any time and may refuse any order to purchase
shares. Although the Trust is not required to hold annual
meetings of its shareholders, shareholders holding at least 10%
of the outstanding shares entitled to vote have the right to call
a meeting to elect or remove Trustees, or to take other actions
as provided in the Agreement and Declaration of Trust.

Shares of the funds may only be purchased by an insurance company
separate account. For matters requiring shareholder approval,
you may be able to instruct the insurance company separate
account how to vote the fund shares attributable to your contract
or policy. See the Voting Rights section of your insurance
product prospectus.

The Trust's Trustees: George Putnam,* Chairman.
President of the Putnam funds. Chairman and Director of Putnam
Management and Putnam Mutual Funds. Director, Marsh & McLennan
Companies, Inc.; William F. Pounds, Vice Chairman. Professor of
Management, Alfred P. Sloan School of Management, Massachusetts
Institute of Technology; Jameson Adkins Baxter, President, Baxter
Associates, Inc.; Hans H. Estin, Vice Chairman, North American
Management Corp.; John A. Hill, Chairman and Managing Director,
First Reserve Corporation; Ronald J. Jackson, Former Chairman,
President and Chief Executive Officer of Fisher-Price, Inc.,
Director of Safety 1st, Inc., Trustee of Salem Hospital and
the Peabody Essex Museum; Elizabeth T. Kennan, President
Emeritus and Professor, Mount Holyoke College; Lawrence J.
Lasser,* Vice President of the Putnam funds. President, Chief
Executive Officer and Director of Putnam Investments, Inc. and
Putnam Management. Director, Marsh & McLennan Companies, Inc.;
Robert E. Patterson, Executive Vice President and Director of
Acquisitions, Cabot Partners Limited Partnership; Donald S.
Perkins,* Director of various corporations, including Cummins
Engine Company, Inc., Lucent Technologies Inc., Springs
Industries, Inc. and Time Warner Inc.; George Putnam, III,*
President, New Generation Research, Inc. ; A.J.C. Smith,*
Chairman and Chief Executive Officer, Marsh & McLennan Companies,
Inc.; and W. Nicholas Thorndike, Director of various corporations
and charitable organizations, including Data General Corporation,
Bradley Real Estate, Inc. and Providence Journal Co. Also,
Trustee of Massachusetts General Hospital and Eastern Utilities
Associates. The Trust's Trustees are also Trustees of the
other Putnam funds. Those marked with an asterisk (*) are or may
be deemed to be "interested persons" of the Trust, Putnam
Management or Putnam Mutual Funds.

About Your Investment

SALES AND REDEMPTIONS

The Trust has an underwriting agreement relating to the funds
with Putnam Mutual Funds, One Post Office Square, Boston,
Massachusetts 02109. Putnam Mutual Funds presently offers shares
of each fund of the Trust continuously to separate accounts of
various insurers. The underwriting agreement presently provides
that Putnam Mutual Funds accepts orders for shares at net asset
value and no sales commission or load is charged. Putnam Mutual
Funds may, at its expense, provide promotional incentives to
dealers that sell variable insurance products.

Shares are sold or redeemed at the net asset value per share next
determined after receipt of an order, except that, in the case of
Putnam VT Money Market Fund, purchases will not be effected until
the next determination of net asset value after federal funds
have been made available to the Trust. Orders for purchases or
sales of shares of a fund must be received by Putnam Mutual Funds
before the close of regular trading on the New York Stock
Exchange in order to receive that day's net asset value. No fee
is charged to a separate account when it redeems fund shares.

Please check with your insurance company to determine the funds
available under your variable annuity contract or variable life
insurance policy. Certain funds may not be available in your
state due to various insurance regulations. Inclusion in this
prospectus of a fund that is not available in your state is not
to be considered a solicitation. This prospectus should be read
in conjunction with the prospectus of the separate account of the
specific insurance product which accompanies this prospectus.

Each fund currently does not foresee any disadvantages to
policyowners arising out of the fact that each fund offers its
shares to separate accounts of various insurance companies to
serve as the investment medium for their variable products.
Nevertheless, the Trustees intend to monitor events in order to
identify any material irreconcilable conflicts which may possibly
arise, and to determine what action, if any, should be taken in
response to such conflicts. If such a conflict were to occur,
one or more insurance companies' separate accounts might be
required to withdraw their investments in one or more funds and
shares of another fund may be substituted. This might force a
fund to sell portfolio securities at disadvantageous prices. In
addition, the Trustees may refuse to sell shares of any fund to
any separate account or may suspend or terminate the offering of
shares of any fund if such action is required by law or
regulatory authority or is in the best interests of the
shareholders of the fund.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

A shareholder may exchange shares of any fund in the Trust for
shares of any other fund in the Trust on the basis of their
respective net asset values. You may not make
exchanges into portfolios of the Trust not offered by your
variable annuity contract or variable life policy.

HOW A FUND VALUES ITS SHARES

Except for securities held by Putnam VT Money Market Fund,
portfolio securities for which market quotations are
readily available are valued at market value. Short-term
investments that will mature in 60 days or less are valued at
amortized cost, which approximates market value. All other
securities and assets are valued at their fair value following
procedures approved by the Trustees. The Trust values the
portfolio investments of Putnam VT Money Market Fund at amortized
cost pursuant to Rule 2a-7 under the Investment Company Act of
1940.

HOW EACH FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS; TAX
INFORMATION

Putnam VT Money Market Fund will declare a dividend of its net
investment income daily and distribute such dividend monthly.
Each month's distributions will be paid on the first business day
of the next month. Since the net income of Putnam VT Money
Market Fund is declared as a dividend each time it is determined,
the net asset value per share of the fund remains at $1.00
immediately after each determination and dividend declaration.
Each of the other funds will distribute any net investment income
and net realized capital gains at least annually. Both types of
distributions will be made in shares of such funds unless an
election is made on behalf of a separate account to receive some
or all of the distributions in cash.

Distributions are reinvested without a sales charge, using the
net asset value determined on the ex-dividend date, except that
with respect to Putnam VT Money Market Fund, distributions are
reinvested using the net asset value determined on the day
following the distribution payment date.

Each fund intends to qualify as a "regulated investment
company" for federal income tax purposes and to meet all other
requirements necessary for it to be relieved of federal income
taxes on income and gains it distributes to the separate
accounts. For information concerning federal income tax
consequences for the holders of variable annuity contracts and
variable life insurance policies, contract holders should consult
the prospectus of the applicable separate account.

Internal Revenue Service regulations applicable to variable
annuity and variable life insurance separate accounts generally
require that portfolios that serve as the funding vehicles solely
for such separate accounts invest no more than 55% of the value
of their assets in one investment, 70% in two investments, 80% in
three investments and 90% in four investments. Alternatively, a
portfolio will be treated as meeting these requirements for any
quarter of its taxable year if, as of the close of such quarter,
the portfolio meets the diversification requirements applicable
to regulated investment companies (see "Taxes" in the SAI) and no
more than 55% of the value of its total assets consists of cash
and cash items (including receivables), U.S. government
securities and securities of other regulated investment
companies. Each of the funds intends to comply with these
requirements.

Fund investments in foreign securities may be subject to
withholding taxes at the source on dividend or interest payments.
In that case, a fund's yield on those securities would be
decreased.

Fund transactions in foreign currencies and hedging activities
will likely produce a difference between book income and taxable
income. This difference may cause a portion of a fund's income
distributions to constitute a return of capital for tax purposes
or require a fund to make distributions exceeding book income to
qualify as a regulated investment company for tax purposes.

Investment in an entity that qualifies as a "passive foreign
investment company" under the Internal Revenue Code could
subject a fund to a U.S. federal income tax or other charge on
certain "excess distributions" with respect to the investment,
and on the proceeds from disposition of the investment.

FINANCIAL INFORMATION

It is expected that owners of the variable annuity contracts and
variable life insurance policies who have contract or policy
values allocated to the funds will receive an unaudited semi-
annual financial statement and an audited annual financial
statement for such funds. These reports show the investments
owned by each fund and provide other relevant information about
the fund.

About Putnam Investments, Inc.

Putnam Management has been managing mutual funds since 1937.
Putnam Mutual Funds is the principal underwriter of the Trust and
of other Putnam funds. Putnam Fiduciary Trust Company is the
custodian of the Trust. Putnam Investor Services, a division of
Putnam Fiduciary Trust Company, is the investor servicing and
transfer agent for the Trust.

Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are subsidiaries of Putnam Investments, Inc., which is
wholly owned by Marsh & McLennan Companies, Inc., a publicly-
owned holding company whose principal businesses are
international insurance and reinsurance brokerage, employee
benefit consulting and investment management.
<PAGE>
APPENDIX

SECURITIES RATINGS

The following rating services describe rated securities as
follows:

Moody's Investors Service, Inc.

Bonds

Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.

Aa -- Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than
the Aaa securities.

A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds which are rated Baa are considered as medium grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking, or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.

Ba -- Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured.
Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.

Caa -- Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.

Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor
prospects of ever earning any real investment standing.

Notes

MIG 1/VMIG 1 -- This designation denotes best quality. There is
present strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the
market for refinancing.

MIG 2/VMIG 2 -- This designation denotes high quality. Margins
of protection are ample although not so large as in the preceding
group.

Commercial paper

Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced
by the following characteristics:

- -- Leading market positions in well established industries.
- -- High rates of return on funds employed.
- -- Conservative capitalization structure with moderate
reliance on debt and ample asset protection.
- -- Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
- -- Well established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations.
This will normally be evidenced by many of the characteristics
cited above to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity
is maintained.

Standard & Poor's

Bonds

AAA -- Debt rated `AAA' has the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal
is extremely strong.

AA -- Debt rated `AA' has a very strong capacity to pay interest
and repay principal and differs from the higher-rated issues only
in small degree.

A -- Debt rated `A' has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher-rated categories.

BBB -- Debt rated `BBB' is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.

BB-B-CCC-CC-C--Debt rated `BB', `B', `CCC', `CC' and `C' is
regarded, on balance , as predominantly speculative with
respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. `BB' indicates the
lowest degree of speculation and `C' the highest. While such
debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or
major exposures to adverse conditions.

BB -- Debt rated `BB' has less near-term vulnerability to default
than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or
economic conditions which could lead to inadequate capacity to
meet timely interest and principal payments. The `BB' rating
category is also used for debt subordinated to senior debt that
is assigned an actual or implied `BBB-' rating.

B -- Debt rated `B' has a greater vulnerability to default but
currently has the capacity to meet interest payments and
principal repayments. Adverse business, financial, or economic
conditions will likely impair capacity or willingness to pay
interest and repay principal. The `B' rating category is also
used for debt subordinated to senior debt that is assigned an
actual or implied `BB' or `BB-' rating.

CCC -- Debt rated `CCC' has a currently identifiable
vulnerability to default, and is dependent upon favorable
business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay principal.
The `CCC' rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied `B' or `B-'
rating.

CC -- The rating `CC' typically is applied to debt subordinated
to senior debt that is assigned an actual or implied `CCC'
rating.
<PAGE>
C -- The rating `C' typically is applied to debt subordinated to
senior debt which is assigned an actual or implied `CCC-' debt
rating. The `C' rating may be used to cover a situation where
a bankruptcy petition has been filed, but debt service
payments are continued.

D -- Bonds rated `D' are in payment default. The
`D' rating category is used when interest payments or
principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The
`D' rating also will be used on the filing of a bankruptcy
petition if debt service payments are jeopardized.

Notes

SP-1 -- Strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety
characteristics are given a plus (+) designation.

SP-2 -- Satisfactory capacity to pay principal and interest.

SP-3 -- Speculative capacity to pay principal and interest.

Commercial paper

A-1 -- This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics are denoted with
a plus sign (+) designation.

A-2 -- Capacity for timely payment on issues with this
designation is satisfactory. However, the relative degree of
safety is not as high as for issues designated `A-1'.

A-3 -- Issues carrying this designation have adequate capacity
for timely payment. They are, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.

Duff & Phelps Corporation

Long-Term Debt

AAA -- Highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury debt.

AA+, AA, AA- -- High credit quality. Protection factors are
strong. Risk is modest but may vary slightly from time to time
because of economic conditions.

A+, A, A- -- Protection factors are average but adequate.
However, risk factors are more variable and greater in periods of
economic stress.
<PAGE>
BBB+, BBB, BBB- -- Below-average protection factors but still
considered sufficient for prudent investment. Considerable
variability in risk during economic cycles.

BB+, BB, BB- -- Below investment grade but deemed likely to meet
obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or
company fortunes. Overall quality may move up or down frequently
within this category.

B+, B, B- -- Below investment grade and possessing risk that
obligations will not be met when due. Financial protection
factors will fluctuate widely according to economic cycles,
industry conditions and/or company fortunes. Potential exists
for frequent changes in the rating within this category or into a
higher or lower rating grade.

CCC -- Well below investment-grade securities. Considerable
uncertainty exists as to timely payment of principal, interest or
preferred dividends. Protection factors are narrow and risk can
be substantial with unfavorable economic/industry conditions,
and/or with unfavorable company developments.

DD -- Defaulted debt obligations. Issuer failed to meet
scheduled principal and/or interest payments.

Fitch Investors Service, Inc.

AAA -- Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be
affected by reasonably foreseeable events.

AA -- Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds
rated AAA.

A -- Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable
to adverse changes in economic conditions and circumstances than
bonds with higher ratings.

BBB -- Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds,
and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.

BB -- Bonds considered to be speculative. The obligor's ability
to pay interest and repay principal may be affected over time by
adverse economic changes. However, business and financial
alternatives can be identified which could assist the obligor in
satisfying its debt service requirements.

B -- Bonds are considered highly speculative. Bonds in this class
are lightly protected as to the obligor's ability to pay interest
over the life of the issue and repay principal when due.

CCC -- Bonds have certain characteristics which, with passing of
time, could lead to the possibility of default on either
principal or interest payments.

CC -- Bonds are minimally protected. Default in payment of
interest and/or principal seems probable.

C -- Bonds are in actual or imminent default in payment of
interest or principal.

DDD -- Bonds are in default and in arrears in interest and/or
principal payments. Such bonds are extremely speculative and
should be valued only on the basis of their value in liquidation
or reorganization of the obligor.
<PAGE>
Putnam Variable Trust PUTNAM VARIABLE
TRUST

One Post Office Square
Boston, MA 02109

FUND INFORMATION:
Investment Manager

Putnam Investment Management, Inc.
One Post Office Square PROSPECTUS
Boston, MA 02109 APRIL 30, 1997

Marketing Services

Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109

Investor Servicing Agent

Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203

Custodian

Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109

Legal Counsel For the investor
who seeks a
Ropes & Gray tax-advantaged
One International Place investment
Boston, MA 02110

Independent Accountants

Price Waterhouse LLP
160 Federal Street
Boston, MA 02110

PUTNAMINVESTMENTS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
<PAGE>
PUTNAM VARIABLE TRUST
PROSPECTUS - APRIL 30, 1997

Putnam VT Diversified Income Fund may invest significantly
in lower-rated bonds, commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of
principal and non-payment of interest. Investors should
carefully assess the risks associated with an investment in
this fund.

This prospectus explains concisely what you should know before
investing in the Trust and should be read in conjunction with the
prospectus for the separate account of the variable annuity or
variable life insurance product that accompanies this prospectus.
Please read it carefully and keep it for future reference.
Investors can find more detailed information about the Trust in
the April 30, 1997 statement of additional information
(the "SAI"), as amended from time to time. For a free copy of
the SAI, call Putnam Investor Services at 1-800-521-0538. The
SAI has been filed with the Securities and Exchange Commission
(the "Commission") and is incorporated into this
prospectus by reference. The Commission maintains a Web site
(http://www.sec.gov) that contains the SAI, material incorporated
by reference into this prospectus and the SAI, and other
information regarding registrants that file electronically with
the Commission.

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

ABOUT THE TRUST

Financial highlights
..............................................................
...
Study this table to see, among other things, how the funds have
performed each year since their inception.

The Trust
..............................................................
...
This section explains the Trust's relationship to various
variable annuity and variable life insurance products and advises
prospective investors to read the prospectus issued by the
relevant insurance company for information about the annuity or
insurance product.

Investment objectives and policies of the funds
..............................................................
...
Each of the funds is managed according to its own specific
investment objective or objectives. Read this section to make
sure a fund's objectives are consistent with your own.

Common investment policies and techniques
..............................................................
...
Certain investment policies and techniques apply to two or more
of the funds. This section defines, describes, and explains
these policies and techniques.

How performance is shown
..............................................................
...
This section describes and defines the measures used to assess
fund performance. All data are based on past
investment results and do not predict future performance.

How the Trust is managed
..............................................................
...
Consult this section for information about the Trust's
management, allocation of its expenses, and how purchases
and sales of securities are made .

Organization and history
..............................................................
...
In this section, you will learn when the Trust was introduced,
how it is organized, how it may offer shares, and who its
Trustees are.
<PAGE>
ABOUT YOUR INVESTMENT

Sales and redemptions
..............................................................
...
This section describes the terms under which shares may be
purchased and redeemed by insurance company separate
accounts .

How a fund values its shares
..............................................................
...
This section explains how a fund determines the value of its
shares.

How a fund makes distributions to shareholders; tax
information
..............................................................
...
This section describes how fund dividends are paid to
various insurance separate accounts . It also discusses the
tax status of the payments and counsels you to
seek specific advice about your own situation.

Financial information
..............................................................
...
This section informs you that each year you will receive
semiannual and annual reports of the Trust.

ABOUT PUTNAM INVESTMENTS, INC.
..............................................................
...
Read this section to learn more about the companies that provide
marketing, investment management, and shareholder account
services to Putnam funds and their shareholders.

APPENDIX
Securities ratings
<PAGE>
About the Trust

FINANCIAL HIGHLIGHTS

The following tables present per share financial information for
the life of each fund. This information has been audited and
reported on by the independent accountants. The "Report
of independent accountants" and financial statements included in
the Trust's annual report to shareholders for the 1996
fiscal year are incorporated by reference into this prospectus.
The Trust's annual report, which contains additional unaudited
performance information, is available without charge upon
request.

<PAGE>
<TABLE>
<CAPTION>
Financial Highlights

Investment Operations Less Distributions:
Net
Realized and In
Excess
of
Net Unrealized Total from From
Net From Net RealizedR>
Net[/R]
Realized
Period Net Asset Value, Investment Gain (Loss) on Investment
Investment Gain on Gain on

ended Beginning of Period Income Investments Operations
Income Investments Investments

<S> <C> <C> <C> <C>
<C> <C> <C>
Putnam VT Asia
Pacific Growth Fund
December 31, 1996 $10.23 $.05 $.88 $.93
$(.15) $- $-
December 31, 1995* * 10.00 .06(a)(b) .17 .23
- - -

Putnam VT Diversified
Income Fund
December 31, 1996 $11.03 $.80(a) $.11 $.91
$(.67) $- $-
December 31, 1995 9.74 .71 1.09 1.80
(.51) - -
December 31, 1994 10.23 .61 (1.04) (.43)
(.06) - -
December 31, 1993* * * 10.00 .06 .17
.23 -
- -

$- $- $-
December 31, 1995 10.82 - 4.84 4.84
- (.02) -
December 31, 1994**** * 10.00 -(b) .82
.82 -
- -

Putnam VT Utilities
Growth and Income Fund
December 31, 1996 $13.28 $.54 $1.49 $2.03
$(.51) $- $-
December 31, 1995 10.68 .53 2.65 3.18
(.58) - -
December 31, 1994 12.00 .60 (1.44) (.84)
(.35) (.12) (.01)
December 31, 1993 10.71 .30 1.13 1.43
(.12) (.02) -
December 31, 1992***** * 10.00 .15(b) .56
.71 -
- -

Putnam VT Voyager Fund

<PAGE>
Ratio of
Total
Net
Investment Ratio of
Investment
Net Asset Return atNet Assets Expenses to
Income to Average
Return ofTotal Value, End Net Asset End of
Period Average Net Average Net Portfolio
commission
Capital Distributions of PeriodValue(%)(c) (in thousands)
Assets(%)(d) Assets(%) Turnover(%) rate
paid(e)
<C> <C> <C> <C> <C> <C>
<C> <C> <C>

$- $(.15) $11.01 9.10 $130,548 1.23
.84 66.10 $.0197
- - 10.23 2.30* 25,045 .81(b)*
.72(b)* 67.72*

$- $(.67) $11.27 8.81 $494,811 .83
7.45 235.53
- (.51) 11.03 19.13 303,721 .85
7.85 297.17
- (.06) 9.74 (4.23) 215,935 .80
7.60 165.17
- - 10.23 2.30 * 80,449 .28*
1.45* 40.83*

$- $(1.40) $24.56 21.92 $5,679,100 .54
2.90 39.57 $.0517
- (.81) 21.47 36.71 3,312,306 .57
3.34 50.87
- (.96) 16.44 .35 1,907,380 .62
3.64 46.43
- (.76) 17.38 14.27 1,407,382 .64
3.49 62.63
- (.83) 15.93 9.75641,50 .69 3.79 39.58
- (.70) 15.33 19.05325,861 .72 4.37 37.94
- (.16) 13.51 1.96155,942 .75 5.02 49.39
- (1.08) 13.41 21.30100,335 .74 5.73
73.40
- - 12.00 19.89* 26,205 .92*
4.08* 37.94*

$- $- $17.22 10.17 $1,674,197
.72 (.13) 57.94
$.0488
(.01) (.03) 15.63 44.87 515,109 .84
(.03) 30.87
- - 10.82 8.20 * 68,592
.47(b)* .03(b)* 32.77*

$- $(.51) $14.80 15.80 $657,429
.73 4.22 61.94 $.0475
- (.58) 13.28 31.08 530,461 .68
4.72 60.33
- (.48) 10.68 (7.02) 384,169 .68
5.23 84.88
- (.14) 12.00 13.42 443,281 .69
5.02 50.79
- - 10.71 7.10*83,522
.64(b)* 3.43(b)* 19.29*

$- $(1.81) 32.53 12.97 3,281,490
.63 .36
63.87 $.0544

- (.56) 30.50 40.67 2,000,232
.68 .49 57.51
- (.42) 22.20 1.04 1,026,972
.71 .40 62.44
- (.34) 22.41 18.70675,198 .66
.33 55.85
- (.52) 19.21 10.36317,225 .75
.56 48.17
- (.36) 17.94 46.09156,741 .81
.78 55.04
- (.15) 12.58 (2.03)48,414 .88
1.58 93.65
- (.62) 13.00 32.38 39,998 .82
1.93 91.82
- - 10.30 2.98 * 7,981
1.35 * 1.44* 103.99*

* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Reflects an expense limitation in effect during the period. As a result
of such limitation, expenses of
Putnam VT Asia Pacific Growth Fund for the period ended
December 31, 1995 reflect a reduction of
approximately $0.03 per share, expenses of Putnam VT New
Opportunities Fund for the period ended December
31, 1994 reflect a reduction of approximately $0.02 per share, and
expenses of Putnam VT Utilities Growth
and Income Fund for the period ended December 31, 1992 reflect a
reduction of approximately $0.01 per
share.
(c) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(d)
The ratio of expenses to average net assets for the periods ended
on or after December 31, 1995
includes amounts paid through expense offset and brokerage service arrangements. Prior period
ratios exclude these amounts.
(e) Certain funds are required to disclose the average commission rate paid per share for fiscal periods beginning
on or after September 1, 1995.
** For the period May 1, 1995 (commencement of operations) to December 31, 1995.
*** For the period September 15, 1993 (commencement of operations) to December 31, 1993.
**** For the period February 1, 1988 (commencement of operations) to December 31, 1988.
***** For the period May 2, 1994 (commencement of operations) to December 31, 1994.
****** For the period May 4, 1992 (commencement of operations) to December 31, 1992.

/TABLE
<PAGE>
THE TRUST

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Glossary

The following terms are frequently used in this prospectus. Many
of these terms are explained in greater detail under "Common
investment policies and techniques."

"Putnam Management" -- Putnam Investment Management, Inc., the
Trust's investment manager

"S&P" -- Standard & Poor's

"Moody's" -- Moody's Investors Service, Inc.

"CMOs" -- collateralized mortgage obligations

"Ginnie Mae" -- Government National Mortgage Association

"Fannie Mae" -- Federal National Mortgage Association

"Freddie Mac" -- Federal Home Loan Mortgage Corporation

PUTNAM VT ASIA PACIFIC GROWTH FUND

Putnam VT Asia Pacific Growth Fund's investment objective
is to seek capital appreciation. In seeking capital
appreciation, the fund will invest primarily in securities of
companies located in Asia and in the Pacific Basin. The fund's
investments will normally include common stocks, preferred
stocks, securities convertible into common stocks or preferred
stocks, and warrants to purchase common stocks or preferred
stocks. The fund may also invest to a lesser extent in debt
securities and other types of investments if Putnam Management
believes they would help achieve the fund's objective. The fund
may hold a portion of its assets in cash and high-
quality money market instruments.

Putnam VT Asia Pacific Growth Fund will generally be
managed in a style similar to that of Putnam Asia Pacific Growth
Fund.

PUTNAM VT DIVERSIFIED INCOME FUND

Putnam VT Diversified Income Fund seeks high current
income consistent with capital preservation. The fund pursues
its investment objective by allocating its investments among the
following three sectors of the fixed-income securities markets:

* a U.S. Government Sector, consisting primarily of debt
obligations of the U.S. government, its agencies and
instrumentalities;

* a High Yield Sector, consisting of high-yielding, lower-rated,
higher - risk U.S. and foreign fixed - income
securities (commonly known as "junk bonds"); and

* an International Sector, consisting of obligations of foreign
governments, their agencies and instrumentalities, and other
fixed-income securities denominated in foreign currencies.

Putnam VT Diversified Income Fund will generally be
managed in a style similar to that of Putnam Diversified Income
Trust.

U.S. Government Sector

Risk factors. U.S. government securities are considered among
the safest of fixed - income investments , but their
values, like those of other debt securities, will fluctuate with
changes in interest rates. Changes in the value of portfolio
securities will not affect interest income from those
securities, but will be reflected in the fund's net asset
value. Thus, a decrease in interest rates will generally result
in an increase in the value of fund shares . Conversely,
during periods of rising interest rates, the value of fund
shares will generally decline. The magnitude of these
fluctuations will generally be greater for securities with longer
maturities , and the fund expects that its portfolio will
normally be weighted towards longer maturities . Because of
their added safety, the yields available from U.S. government
securities are generally lower than the yields available from
comparable corporate debt securities .

While certain U.S. government securities, such as U.S. Treasury
obligations and Ginnie Mae certificates, are backed by the full
faith and credit of the U.S . government, other securities
in which the fund may invest are subject to varying degrees of
risk of default . These risk factors include the
creditworthiness of the issuer and , in the case of mortgage-
backed and asset-backed securities, the ability of the
underlying mortgagors or other borrowers to meet their
obligations.

High Yield Sector

The High Yield Sector may invest in any security which is
rated at least Caa or CCC by a nationally recognized
securities rating agency, such as Moody's or S&P, or in any
unrated security that Putnam Management determines is
of comparable quality . In addition, the High Yield
Sector may invest up to 5% of its net assets
in securities rated below Caa or CCC by each rating agency
rating such security , or in unrated securities that
Putnam Management determines are of comparable quality.
Securities rated below Caa or CCC are of poor
standing and may be in default.

For a description of the risks associated with investments in
fixed-income securities, including lower-rated fixed -
income securities, see "Common investment policies and
techniques --Lower-rated and other fixed-income securities."

The fund may invest in securities of issuers in emerging
markets, as well as more developed markets. Investing in
emerging markets generally involves more risk than investing in
developed markets.

International Sector

The fund will invest the assets allocated to the International
Sector in debt obligations and other fixed-income securities
denominated in non-U.S. currencies. These securities include:

* debt obligations issued or guaranteed by foreign national,
provincial, state, or other governments with taxing
authority, or by their agencies or instrumentalities;

* debt obligations of supranational entities (described below);
and

* debt obligations and other fixed-income securities of foreign
and U.S. corporate issuers.

When investing in the International Sector, the fund will
purchase only debt securities rated at least A by a nationally
recognized securities rating agency or unrated securities
that Putnam Management determines are of comparable quality.
The fund may, however, make investments in international
debt securities rated below A with respect to assets allocated to
the High Yield Sector. The foregoing investment limitations
will be measured at the time of purchase and, to the extent that
a security is assigned a different rating by one or more of the
various rating agencies, Putnam Management will use the highest
rating assigned by any agency.

For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments."

PUTNAM VT GROWTH AND INCOME FUND

Putnam VT Growth and Income Fund seeks capital growth and
current income as its investment objectives. The fund invests
primarily in common stocks that offer potential for capital
growth, current income, or both. The fund may also purchase
corporate bonds, notes and debentures, preferred stocks ,
convertible securities (both debt securities and preferred
stocks) or U.S. government securities, if Putnam Management
determines that their purchase would help further the fund's
investment objectives. The types of securities held by the fund
may vary from time to time in light of the fund's investment
objectives, changes in interest rates , and economic and
other factors. The fund may engage in defensive strategies when
Putnam Management judges that conditions in the securities
markets make pursuing the fund's basic investment strategy
inconsistent with the best interests of the fund's shareholders.
See "Common investment policies and techniques" below for a
discussion of these strategies.

The fund may invest up to 20% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments." The fund may
invest in both higher-rated and lower-rated fixed-income
securities. The risks associated with fixed - income
securities, including lower-rated fixed-income securities
(commonly known as "junk bonds"), are discussed below under
"Common investment policies and techniques -- Lower-rated and
other fixed - income securities."

Putnam VT Growth and Income Fund will generally be managed
in a style similar to that of The Putnam Fund for Growth and
Income.

PUTNAM VT NEW OPPORTUNITIES FUND

The sectors of the economy which offer above-average growth
potential will change over time. At present, Putnam Management
has identified the following sectors of the economy , and
examples of industries within these sectors, as having an
above-average growth potential over the next three to five years:

Personal Communications - long distance telephone,
competitive local exchange carriers, cellular telephone,
paging, personal communication networks;

Media/Entertainment - cable television system operators, cable
television network programmers, casino operators, film
entertainment providers, theme park operators, radio
and television stations , billboard advertising
providers ;

Medical Technology/Cost-Containment - home and outpatient care,
medical device companies, biotechnology, health care
information services , physician practice management, managed
care providers ;

Environmental Services - solid waste disposal, hazardous waste
disposal, remediation services, environmental testing;

Applied/Advanced Technology - database software, application
software, entertainment software, networking software, computer
systems integrators, information services companies,
semiconductors;

Personal Financial Services - specialty insurance companies,
credit card issuers, and other consumer-oriented financial
services companies; and

Value-oriented Consuming - retailers, restaurants, hotel chains
, travel companies and other consumer product or service
companies able to provide quality products or services at lower
prices or offering greater perceived value than competitors.

In addition, the fund may also invest a portion of its assets in
securities of companies that, although not in any of the sectors
described above, are expected to experience above-average growth.

The fund will invest in securities which Putnam Management
believes offer above-average long-term growth opportunities. As
a result of the fund's long-term investment strategy, it is
possible that the fund's total return over certain periods may be
less than that of other equity investment vehicles.
<PAGE>
The fund seeks to invest in companies that offer above-average
growth prospects in their particular sector of the economy,
without regard to a company's size. Companies in the fund's
portfolio will range from small, rapidly growing companies to
larger, well-established firms. It may invest in small and
relatively less well-known companies. Investing in these
companies may present greater opportunities for capital
appreciation, but also may involve greater risk. They may have
limited product lines, markets or financial resources, or may
depend on a limited management group. Their securities may trade
less frequently and in limited volume, and only in the over-the-
counter market or on a regional securities exchange. As a
result, these securities may fluctuate in value more than
securities of larger, more established companies.

The fund will normally emphasize investments in particular
economic sectors. Although the fund will not invest more than 25%
of its assets in any one industry, the fund's emphasis on
particular sectors of the economy may make the value of the
fund's shares more susceptible to any single economic, political
or regulatory development than the shares of an investment
company which is more widely diversified. As a result, the
value of the fund's shares may fluctuate more than
the value of the shares of a more diversified
investment company.

Putnam VT New Opportunities Fund will generally be managed
in a style similar to that of Putnam New Opportunities Fund.

PUTNAM VT UTILITIES GROWTH AND INCOME FUND

The investment objective of Putnam VT Utilities Growth and
Income Fund is to seek capital growth and current income. The
fund concentrates its investments in securities issued by
companies in the public utilities industries.

The fund may invest up to 25% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments." The fund may
also engage in foreign currency exchange transactions and
transactions in futures and options, enter into repurchase
agreements, loan its portfolio securities and purchase securities
for future delivery. See "Common investment policies and
techniques" below for a discussion of these securities and types
of transactions and the risks associated with them. The fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the fund's
basic investment strategy inconsistent with the best interests of
the fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.
<PAGE>
Since the fund's investments are concentrated in the utilities
industries, the value of its shares can be expected to change in
response to factors affecting those industries, and may
fluctuate more widely than the value of shares of a portfolio
that invests in a broader range of industries. Many utility
companies, especially electric, gas and other energy-related
utility companies, have historically been subject to risks of
increase in fuel and other operating costs, changes in interest
rates on borrowings for capital improvement programs, changes in
applicable laws and regulations, changes in technology which may
render existing plants, equipment or products obsolete, the
effects of energy conservation and operating constraints, and
increased costs and delays associated with compliance with
environmental regulations. In particular, regulatory changes
with respect to nuclear and conventionally-fueled power
generating facilities could increase costs or impair the ability
of utility companies to operate such facilities or obtain
adequate return on invested capital. Generally, prices charged
by utilities are regulated in the United States and in foreign
countries with the intention of protecting the public while
ensuring that utility companies earn a return sufficient to allow
them to attract capital in order to grow and continue to provide
appropriate services. There can be no assurance that such
pricing policies or rates of return will continue in the future.

Putnam VT Utilities Growth and Income Fund will generally
be managed in a style similar to that of Putnam Utilities Growth
and Income Fund. Because the latter fund is
"diversified," however, Putnam VT Utilities Growth and
Income Fund's portfolio may consist of securities of a smaller
number of issuers than the portfolio of that fund.

PUTNAM VT VOYAGER FUND

The fund's investments may include widely-traded common stocks of
larger companies as well as common stocks of smaller, less well-
known issuers. The fund generally invests a portion of its
assets in the securities of small- to medium-sized companies with
equity market capitalizations of less than $3 billion. Investing
in these companies may present greater opportunities for capital
appreciation, but may also involve greater risk. They may have
limited product lines, markets or financial resources, or may
depend on a limited management group. Their securities may trade
less frequently and in limited volume and only in the over-the-
counter market or on a regional securities exchange. As a
result, these securities may fluctuate in value more than
securities of larger, more established companies.

Putnam VT Voyager Fund will generally be managed in a
style similar to Putnam Voyager Fund.

GENERAL

COMMON INVESTMENT POLICIES AND TECHNIQUES

Diversification policies

Limiting investment risk

(b) 25% of its total assets in any one industry (other than
securities of the U.S. government, its agencies or
instrumentalities); except that Putnam VT Utilities Growth and
Income Fund may invest more than 25% of its assets in any of the
public utilities industries; and except that Putnam VT Money
Market fund may invest more than 25% of its assets in (i) the
banking industry, (ii) the personal credit institution or
business credit institution industries or (iii) any combination
of the above, when, in the opinion of Putnam Management yield
differentials make such investments desirable.*

Defensive strategies

At times, Putnam Management may judge that conditions in the
securities markets make pursuing a fund's basic investment
strategy inconsistent with the best interests of its
shareholders. At such times , Putnam Management may
temporarily use alternative strategies , primarily designed
to reduce fluctuations in the value of fund assets.

It is impossible to predict when, or for how long, these
alternative strategies would be used .

Portfolio turnover

Investments in premium securities

A fund does not amortize the premium paid for these
securities in calculating its net investment income. As a result,
the purchase of premium securities provides a higher
level of investment income distributable to shareholders on a
current basis than if the fund purchased securities bearing
current market rates of interest. Because the value of premium
securities tends to approach the principal amount as they
approach maturity (or call price in the case of securities
approaching their first call date), the purchase of such
securities may increase the fund's risk of capital loss if such
securities are held to maturity (or first call date).

During a period of declining interest rates, many of a fund's
portfolio investments will likely bear coupon rates that are
higher than current market rates, regardless of whether such
securities were originally purchased at a premium. These
securities would generally carry premium market values that would
be reflected in the net asset value of fund shares. As a
result, an investor who purchases fund shares
during such periods would initially receive higher taxable
monthly distributions (derived from the higher coupon rates
payable on a fund's investments) than might be available
from alternative investments bearing current market interest
rates, but the investor may face an increased risk of capital
loss as these higher coupon securities approach maturity (or
first call date). In evaluating the potential performance of an
investment in a fund, investors may find it useful to compare the
fund's current dividend rate with its "yield," which is
computed on a yield-to-maturity basis in accordance with SEC
regulations and which reflects amortization of market premiums.
See "How performance is shown."

Foreign investments

Each fund may invest in securities of foreign issuers
that are not actively traded in U.S. markets.
These foreign investments involve certain special risks
described below.

Foreign securities are normally denominated and traded in
foreign currencies . As a result, the value of a fund's
foreign investments and the value of its shares may be
affected favorably or unfavorably by changes in currency
exchange rates relative to the U.S. dollar. Each fund may
engage in a variety of foreign currency exchange
transactions in connection with its foreign investments,
including transactions involving futures contracts, forward
contracts and options.

Legal remedies available to investors in certain foreign
countries may be more limited than those available with respect
to investments in the United States or in other foreign
countries. The laws of some foreign countries may limit a
fund's ability to invest in securities of certain issuers
organized under the laws of those foreign countries.

Each fund expects that its investments in foreign
securities generally will not exceed the percentage of its total
assets indicated above in its relevant section, although its
investments in foreign securities may exceed this amount from
time to time. Certain of the foregoing risks may also apply to
some extent to securities of U.S. issuers that are denominated in
foreign currencies or that are traded in foreign markets, or
securities of U.S. issuers having significant foreign
operations.

For more information about foreign securities and the risks
associated with investment in such securities, see
the SAI.

Foreign currency exchange transactions

To the extent described above, certain of the funds may engage in
foreign currency exchange transactions to protect against
uncertainty in the level of future exchange rates. Putnam
Management may engage in foreign currency exchange
transactions in connection with the purchase and sale of
portfolio securities ("transaction hedging") and to protect
against changes in the value of specific portfolio positions
("position hedging").

A fund may engage in transaction hedging to protect against a
change in foreign currency exchange rates between the date on
which the fund contracts to purchase or sell a security and the
settlement date, or to "lock in" the U.S. dollar equivalent of a
dividend or interest payment in a foreign currency. A fund may
also purchase or sell foreign currency on a spot (or cash)
basis at the prevailing spot rate in connection with the
settlement of transactions in portfolio securities denominated in
that foreign currency.

If conditions warrant, for transaction hedging purposes, a
fund may also enter into contracts to purchase or sell foreign
currencies at a future date ("forward contracts") and may
purchase and sell foreign currency futures contracts . A
foreign currency forward contract is a negotiated agreement to
exchange currency at a future time at a rate or rates that may be
higher or lower than the spot rate. Foreign currency futures
contracts are standardized exchange-traded contracts and have
margin requirements. In addition, for transaction hedging
purposes, a fund may also purchase or sell exchange-listed and
over-the-counter call and put options on foreign currency
futures contracts and on foreign currencies.

A fund may engage in position hedging to protect against a
decline in the value relative to the U.S. dollar of the
currencies in which its portfolio securities are denominated or
quoted (or an increase in the value of the currency in
which securities the fund intends to buy are denominated, when
the fund holds cash or short-term investments). For position
hedging purposes, a fund may purchase or sell foreign currency
futures contracts, foreign currency forward contracts and
options on foreign currency futures contracts and on foreign
currencies on exchanges or in over-the-counter markets .
In connection with position hedging, a fund may also purchase or
sell foreign currency on a spot basis.

The decision as to whether and to what extent a fund will
engage in foreign currency exchange transactions will depend on a
number of factors, including prevailing market conditions, the
composition of a fund's portfolio and the availability of
suitable transactions. Accordingly, there can be no assurance
that a fund will engage in foreign currency exchange transactions
at any given time or from time to time. See the SAI.

Futures and options

Futures and options on futures. To the extent described above,
each fund may buy and sell stock index futures
contracts ("index futures"). An "index future" is a contract to
buy or sell units of a particular stock index at an
agreed price on a specified future date. Depending on the change
in value of the index between the time a fund enters into
and terminates an index futures transaction, the fund realizes a
gain or loss. A fund may also, to the extent consistent
with its investment objectives and policies, buy and sell call
and put options on index futures or stock indexes. A
fund may engage in index futures and options transactions for
hedging purposes and for nonhedging purposes, such as to
adjust its exposure to relevant markets or as a substitute
for direct investment . In addition, if a fund's investment
policies permit it to invest in foreign securities, such fund may
invest in futures and options on foreign securities, for hedging
purposes and for nonhedging purposes . The use of index
futures and related options involves certain special risks.
Futures and options transactions involve costs and may result in
losses.

The use of index futures and related options involves certain
special risks. Futures and options transactions involve costs
and may result in losses.

When a fund writes a call option, it gives up the opportunity to
profit from any increase in the price of a security above the
exercise price of the option; when it writes a put option,
it takes the risk that it will be required to purchase a
security from the option holder at a price above the current
market price of the security. A fund may
terminate an option that it has written prior to its expiration
by entering into a closing purchase transaction in which it
purchases an option having the same terms as the option written.

The use of options and futures strategies also involves the risk
of imperfect correlation among movements in the values of the
securities, currencies or indexes underlying the futures and
options purchased and sold by a fund, of the option or
futures contract itself, and of the securities or currencies
which are the subject of a hedge. The successful use of these
strategies further depends on the ability of Putnam Management to
forecast interest rates and market movements correctly.

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the SAI.

Lower-rated and other fixed-income securities

Changes by recognized rating services in their ratings of
a fixed-income security and changes in the ability
of an issuer to make payments of interest and principal may also
affect the value of these investments. Changes in the value of
portfolio securities generally will not affect income derived
from these securities, but will affect a fund's net asset
value.

The lower ratings of certain securities held by a fund
reflect a greater possibility that adverse changes in the
financial condition of owning shares of the issuer
or in general economic conditions, or both, or an unanticipated
rise in interest rates, may impair the ability of the issuer to
make payments of interest and principal.

Certain investment grade securities in which a fund may invest
share some of the risk factors discussed above with respect to
lower-rated securities.

Each fund may invest up to 15% of its assets in illiquid
securities. Putnam Management believes that opportunities to
earn high yields may exist from time to time in securities which
are illiquid and which may be considered speculative. The sale
of these securities is usually restricted under federal
securities laws. As a result of illiquidity, the fund may not be
able to sell these securities when Putnam Management considers it
desirable to do so or may have to sell them at less than fair
market value.

Mortgage-backed and asset-backed securities

- - Certain securities issued or guaranteed by the U.S. government
or one of its agencies or instrumentalities ;

Stripped mortgage-backed securities are usually structured with
two classes that receive different portions of the interest and
principal distributions on a pool of mortgage loans . A
fund may invest in both the interest-only or "IO" class and the
principal-only or "PO" class.

Each fund may also invest in asset-backed securities.
Asset-backed securities are structured like mortgage-backed
securities, but instead of mortgage loans or interests in
mortgage loans, the underlying assets may include such items
as motor vehicle installment sales or installment loan
contracts, leases of various types of real and personal property,
and receivables from credit card agreements. The ability of an
issuer of asset-backed securities to enforce its security
interest in the underlying assets may be limited.

Mortgage-backed and asset-backed securities have yield and
maturity characteristics corresponding to the underlying assets.
Unlike traditional debt securities, which may pay a fixed rate of
interest until maturity when the entire principal amount comes
due, payments on certain mortgage-backed and asset-backed
securities include both interest and a partial payment of
principal. Besides the scheduled repayment of principal,
payments of principal may result from the voluntary
prepayment, refinancing, or foreclosure of the underlying
mortgage loans or other assets.

CMOs are issued with a number of classes or series
that have different maturities and that may represent
interests in some or all of the interest or principal on the
underlying collateral. Payment of interest or principal on some
classes or series of CMOs may be subject to contingencies or some
classes or series may bear some or all of the risk of default on
the underlying mortgages. CMOs of different classes or series
are generally retired in sequence as the underlying mortgage
loans in the mortgage pool are repaid. If enough mortgages are
repaid ahead of schedule, the classes or series of a CMO with the
earliest maturities generally will be retired prior to their
maturities. Thus, the early retirement of particular classes or
series of a CMO would have the same effect as the
prepayment of mortgages underlying other mortgage-backed
securities. Conversely, slower than anticipated prepayments
can extend the effective maturities of CMOs, subjecting them to a
greater risk of decline in market value in response to rising
interest rates than traditional debt securities, and, therefore,
potentially increasing the volatility of a fund.

The yield to maturity on an IO or PO class of stripped mortgage-
backed securities is extremely sensitive not only to changes in
prevailing interest rates but also to the rate of principal
payments (including prepayments) on the underlying assets. A
rapid rate of principal prepayments may have a measurably adverse
effect on a fund's yield to maturity to the extent it invests in
IOs. If the assets underlying the IOs experience greater than
anticipated prepayments of principal, a fund may fail to recoup
fully its initial investment in these securities. Conversely,
POs tend to increase in value if prepayments are greater than
anticipated and decline if prepayments are slower than
anticipated.

Securities loans, repurchase agreements and forward commitments.
A fund may lend portfolio securities amounting to not more than
25% of its assets to broker-dealers and may enter into repurchase
agreements on up to 25% of its assets. These transactions must
be fully collateralized at all times. A fund may also purchase
securities for future delivery, which may increase its overall
investment exposure and involves a risk of loss if the value of
the securities declines prior to the settlement date. These
transactions involve some risk if the other party should default
on its obligation and a fund is delayed or prevented from
recovering the collateral or completing the transaction.

Derivatives

Certain of the instruments in which each fund may invest, such as
futures contracts, options, forward contracts and CMOs,
are considered to be "derivatives." Derivatives are financial
instruments whose value depends upon, or is derived from, the
value of an underlying asset, such as a security or an index.
Further information about these instruments and the risks
involved in their use is included elsewhere in this prospectus
and in the SAI.

HOW PERFORMANCE IS SHOWN

Fund advertisements may, from time to time , include
performance information . "Yield" is calculated by dividing
the annualized net investment income per share during a
recent 30-day period by the maximum public offering price per
share on the last day of that period.

All data are based on past investment results and do not predict
future performance. Investment performance, which will
vary, is based on many factors, including market conditions,
portfolio composition and fund operating expenses.
Investment performance also often reflects the risks associated
with a fund's investment objective or objectives and policies.
These factors should be considered when comparing a fund's
investment results with those of other mutual funds and other
investment vehicles.

Quotations of investment performance for any period when an
expense limitation was in effect will be greater than if the
limitation had not been in effect. Fund performance may
be compared to that of various indexes. See the SAI.

Performance information presented for the funds should not be
compared directly with performance information of other insurance
products without taking into account insurance-related charges
and expenses payable with respect to these insurance products.
Insurance related charges and expenses are not reflected
in the funds' performance information. As a result of such
insurance-related charges and expenses, an investor's return
under the insurance product would be lower.

For performance information through the funds' most recent fiscal
year, see "Investment Performance of the Trust" in the SAI.

HOW THE TRUST IS MANAGED

The Trustees are responsible for generally overseeing the
conduct of Trust business. Subject to such policies as
the Trustees may determine, Putnam Management furnishes a
continuing investment program for the Trust and makes investment
decisions on its behalf. Subject to the control of the Trustees,
Putnam Management also manages the Trust's other affairs and
business.

The Trust pays Putnam Management a quarterly fee for these
services based on average net assets. See the SAI.

Putnam VT Asia Pacific
Growth Fund

David K. Thomas 1995 Employed as an investment
Senior Vice President professional by Putnam
Management since 1987.

Putnam VT Diversified
Income Fund

Jennifer E. Leichter 1993 Employed as an investment
Senior Vice President professional by Putnam
Management since 1987.

Kenneth J. Taubes 1997 Employed as an investment
Senior Vice President
professional by Putnam
Management June, 1991.

<PAGE>
Putnam VT Growth and
Income Fund

Anthony I. Kreisel 1993 Employed as an investment
Managing Director professional by Putnam
Management since 1986.

David L. King 1993 Employed as an investment
Senior Vice President professional by Putnam
Management since 1983.

Putnam VT New
Opportunities Fund

Daniel L. Miller 1994 Employed as an investment
Managing Director professional by Putnam
Management since 1983.

Putnam VT Utilities
Growth and Income Fund

Sheldon N. Simon 1992 Employed as an investment
Senior Vice President professional by Putnam
Management since 1984.

Putnam VT Voyager Fund

Robert R. Beck 1995 Employed as an investment
Senior Vice President professional by Putnam
Management since 1989.

Charles H. Swanberg 1994 Employed as an investment
Senior Vice President professional by Putnam
Management since 1984.

The following table summarizes total expenses, including
management fees but excluding any insurance-related charges and
expenses, based on the most recent fiscal year (or, for
funds that have been in operation for less than a full year,
based on estimated expenses for the first full fiscal year) as a
percentage of each fund's average net assets :

Total Management
Expenses Fees

Putnam VT Asia Pacific Growth Fund 1.23%
0.80%
Putnam VT Diversified Income Fund 0.83% 0.70%
Putnam VT Growth and Income Fund 0.54%
0.49%
Putnam VT New Opportunities Fund 0.72%
0.63%
Putnam VT Utilities Growth and
Income Fund* 0.78%
0.69%
Putnam VT Voyager Fund 0.63%
0.57%

* On July 11, 1996, shareholders approved an increase in the
fees payable to Putnam Management under the Management
Contract for Putnam VT Utilities Growth and Income Fund.
The management fees and total expenses shown in the
table have been restated to reflect the increase.
Actual management fees and total expenses
were 0.64% and 0.73% , respectively.
<PAGE>
The expenses shown in the table do not reflect the application of
credits related to brokerage service and expense offset
arrangements that reduce certain fund expenses.

ORGANIZATION AND HISTORY

Putnam Variable Trust is a Massachusetts business trust
organized on September 24, 1987. A copy of the Agreement and
Declaration of Trust, which is governed by Massachusetts law, is
on file with the Secretary of State of The Commonwealth of
Massachusetts. Prior to January 1, 1997, the Trust was known
as Putnam Capital Manager Trust.

The Trust is an open-end management investment company with an
unlimited number of authorized shares of beneficial interest.
Shares of the Trust may, without shareholder approval, be divided
into two or more series of shares representing separate
investment portfolios, and are currently divided into
sixteen series of shares, each representing a separate
investment portfolio which is being offered through separate
accounts of various insurance companies. Each portfolio is a
diversified investment company, except for Putnam VT
Utilities Growth and Income Fund, which is a non-diversified
investment company. Prior to January 1, 1997, Putnam VT Asia
Pacific Growth Fund was known as PCM Asia Pacific Growth Fund,
Putnam VT Diversified Income Fund was known as PCM Diversified
Income Fund, Putnam VT Growth and Income Fund was known as PCM
Growth and Income Fund, Putnam VT New Opportunities Fund was
known as PCM New Opportunities Fund, Putnam VT Utilities Growth
and Income Fund was known as PCM Utilities Growth and Income
Fund, and Putnam VT Voyager Fund was known as PCM Voyager
Fund. Shares vote by individual portfolio on all matters
except (i) when required by the Investment Company Act of 1940,
shares of all portfolios shall be voted in the aggregate, and
(ii) when the Trustees have determined that the matter affects
only the interests of one or more portfolios, only the
shareholders of such portfolio or portfolios shall be entitled to
vote.

The Trust's Trustees: George Putnam,* Chairman.
President of the Putnam funds. Chairman and Director of Putnam
Management and Putnam Mutual Funds. Director, Marsh & McLennan
Companies, Inc.; William F. Pounds, Vice Chairman. Professor of
Management, Alfred P. Sloan School of Management, Massachusetts
Institute of Technology; Jameson Adkins Baxter, President, Baxter
Associates, Inc.; Hans H. Estin, Vice Chairman, North American
Management Corp.; John A. Hill, Chairman and Managing Director,
First Reserve Corporation; Ronald J. Jackson, Former Chairman,
President and Chief Executive Officer of Fisher-Price, Inc.,
Director of Safety 1st, Inc., Trustee of Salem Hospital and the
Peabody Essex Museum; Elizabeth T. Kennan, President Emeritus
and Professor, Mount Holyoke College; Lawrence J. Lasser,* Vice
President of the Putnam funds. President, Chief Executive
Officer and Director of Putnam Investments, Inc. and Putnam
Management. Director, Marsh & McLennan Companies, Inc.; Robert
E. Patterson, Executive Vice President and Director of
Acquisitions, Cabot Partners Limited Partnership; Donald S.
Perkins,* Director of various corporations, including Cummins
Engine Company, Inc., Lucent Technologies Inc., Springs
Industries, Inc. and Time Warner Inc.; George Putnam, III,*
President, New Generation Research, Inc. ; A.J.C. Smith,*
Chairman and Chief Executive Officer, Marsh & McLennan Companies,
Inc.; and W. Nicholas Thorndike, Director of various corporations
and charitable organizations, including Data General Corporation,
Bradley Real Estate, Inc. and Providence Journal Co. Also,
Trustee of Massachusetts General Hospital and Eastern Utilities
Associates. The Trust's Trustees are also Trustees of the
other Putnam funds. Those marked with an asterisk (*) are or may
be deemed to be "interested persons" of the Trust, Putnam
Management or Putnam Mutual Funds.

About Your Investment

SALES AND REDEMPTIONS

Shares are sold or redeemed at the net asset value per share next
determined after receipt of an order. Orders for purchases or
sales of shares of a fund must be received by Putnam Mutual Funds
before the close of regular trading on the New York Stock
Exchange in order to receive that day's net asset value. No fee
is charged to a separate account when it redeems fund shares.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

HOW A FUND VALUES ITS SHARES

The Trust calculates the net asset value of a share of each fund
by dividing the total value of its assets , less
liabilities, by the number of its shares
outstanding. Shares are valued as of the close of regular
trading on the New York Stock Exchange each day the Exchange is
open. Fund securities for which market quotations are readily
available are valued at market value. Short-term investments
that will mature in 60 days or less are valued at amortized cost,
which approximates market value. All other securities and assets
are valued at their fair value following procedures approved by
the Trustees.
<PAGE>
HOW EACH FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS; TAX
INFORMATION

Each fund will distribute any net investment income and net
realized capital gains at least annually. Both types of
distributions will be made in shares of such funds unless an
election is made on behalf of a separate account to receive some
or all of the distributions in cash.

Distributions are reinvested without a sales charge, using the
net asset value determined on the ex-dividend date.

Fund investments in foreign securities may be subject to
withholding taxes at the source on dividend or interest payments.
In that case, a fund's yield on those securities would be
decreased.

Investment in an entity that qualifies as a "passive foreign
investment company" under the Internal Revenue Code could subject
a fund to a U.S. federal income tax or other charge on certain
"excess distributions" with respect to the investment, and on the
proceeds from disposition of the investment.

FINANCIAL INFORMATION

About Putnam Investments, Inc.

Putnam Management has been managing mutual funds since 1937.
Putnam Mutual Funds is the principal underwriter of the Trust and
of other Putnam funds. Putnam Fiduciary Trust Company is the
custodian of the Trust . Putnam Investor Services,
a division of Putnam Fiduciary Trust Company, is the
investor servicing and transfer agent for the Trust .

SECURITIES RATINGS

The following rating services describe rated securities as
follows:

Moody's Investors Service, Inc.

Bonds

Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of
such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated
lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat
larger than the Aaa securities.

Baa -- Bonds which are rated Baa are considered as medium grade
obligations , (i.e., they are neither highly protected nor
poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking, or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.

Ba -- Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well -
assured. Often the protection of interest and principal
payments may be very moderate , and thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

Caa -- Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.

Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of
bonds , and issues so rated can be regarded as having
extremely poor prospects of ever earning any real investment
standing.

Notes

MIG 2/VMIG 2 -- This designation denotes high quality. Margins
of protection are ample although not so large as in the preceding
group.

Commercial paper

Standard & Poor's

Bonds

AAA -- Debt rated `AAA' has the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal
is extremely strong.

AA -- Debt rated `AA' has a very strong capacity to pay interest
and repay principal and differs from the higher-rated issues only
in small degree.

BB-B-CCC-CC-C--Debt rated `BB', `B', `CCC', `CC' and `C' is
regarded , on balance, as predominantly speculative
with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation .
`BB' indicates the lowest degree of speculation and `C'
the highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions.

D -- Bonds rated `D' are in payment default. The `D' rating
category is used when interest payments or principal payments are
not made on the date due even if the applicable grace period has
not expired, unless S&P believes that such payments will
be made during such grace period. The `D' rating also will be
used on the filing of a bankruptcy petition if debt service
payments are jeopardized.

Notes

SP-1 -- Strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics
are given a plus (+) designation.

SP-2 -- Satisfactory capacity to pay principal and interest.

SP-3 -- Speculative capacity to pay principal and interest.

Commercial paper

A-2 -- Capacity for timely payment on issues with this
designation is satisfactory. However, the relative degree of
safety is not as high as for issues designated `A-1'.

Duff & Phelps Corporation

Long-Term Debt

AAA -- Highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury debt.

AA+, AA, AA- -- High credit quality. Protection factors are
strong. Risk is modest but may vary slightly from time to time
because of economic conditions.

DD -- Defaulted debt obligations. Issuer failed to meet
scheduled principal and/or interest payments.

Fitch Investors Service, Inc.

B -- Bonds are considered highly speculative. Bonds in this class
are lightly protected as to the obligor's ability to pay interest
over the life of the issue and repay principal when due.

CCC -- Bonds have certain characteristics which, with passing of
time, could lead to the possibility of default on either
principal or interest payments.

CC -- Bonds are minimally protected. Default in payment of
interest and/or principal seems probable.

C -- Bonds are in actual or imminent default in payment of
interest or principal.

One Post Office Square
Boston, MA 02109

FUND INFORMATION:
Investment Manager

Putnam Investment Management, Inc.
One Post Office Square PROSPECTUS
Boston, MA 02109 APRIL 30, 1997

Marketing Services

Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109

Investor Servicing Agent

Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203

Custodian

Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109

Legal Counsel For the investor
who seeks a
Ropes & Gray tax-advantaged
One International Place investment
Boston, MA 02110

Independent Accountants

Price Waterhouse LLP
160 Federal Street
Boston, MA 02110

PUTNAMINVESTMENTS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
<PAGE>
PUTNAM VARIABLE TRUST
PROSPECTUS - APRIL 30, 1997

This prospectus explains concisely what you should know before
investing in the Trust and should be read in conjunction with the
prospectus for the separate account of the variable annuity or
variable life insurance product that accompanies this prospectus.
Please read it carefully and keep it for future reference.
Investors can find more detailed information about the Trust in
the April 30, 1997 statement of additional information
(the "SAI"), as amended from time to time. For a free copy of
the SAI, call Putnam Investor Services at 1-800-521-0538. The
SAI has been filed with the Securities and Exchange Commission
(the "Commission") and is incorporated into this
prospectus by reference. The Commission maintains a Web site
(http://www.sec.gov) that contains the SAI, material incorporated
by reference into this prospectus and the SAI, and other
information regarding registrants that file electronically with
the Commission.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

SHARES OF THE FUND ARE PRESENTLY AVAILABLE AND ARE BEING MARKETED
EXCLUSIVELY AS A POOLED FUNDING VEHICLE FOR VARIABLE ANNUITY
CONTRACT AND VARIABLE LIFE INSURANCE POLICY SEPARATE ACCOUNTS OF
VARIOUS INSURANCE COMPANIES.
<PAGE>
What you need to know

ABOUT THE TRUST

Financial highlights
..............................................................
...
Study this table to see, among other things, how the fund has
performed each year since their inception.

The Trust
..............................................................
...
This section explains the Trust's relationship to various
variable annuity and variable life insurance products and advises
prospective investors to read the prospectus issued by the
relevant insurance company for information about the annuity or
insurance product.

Investment objective and policies of the fund
..............................................................
...
The fund is managed according to its own specific investment
objective or objectives . Read this section to make sure
the fund's objectives are consistent with your own.

How performance is shown
..............................................................
...
This section describes and defines the measures used to assess
fund performance. All data are based on past
investment results and do not predict future performance.

How the Trust is managed
..............................................................
...
Consult this section for information about the Trust's
management, allocation of its expenses, and how purchases
and sales of securities are made .

Organization and history
..............................................................
...
In this section, you will learn when the Trust was introduced,
how it is organized, how it may offer shares, and who its
Trustees are.
<PAGE>
ABOUT YOUR INVESTMENT

Sales and redemptions
..............................................................
...
This section describes the terms under which shares may be
purchased and redeemed by insurance company separate
accounts .

How the fund values its shares
..............................................................
...
This section explains how a fund determines the value of
its shares.

How the fund makes distributions to shareholders; tax information
..............................................................
...
This section describes how fund dividends are paid to
various insurance separate accounts . It also discusses the
tax status of the payments and counsels you to
seek specific advice about your own situation.

Financial information
..............................................................
...
This section informs you that each year you will receive
semiannual and annual reports of the Trust.

ABOUT PUTNAM INVESTMENTS, INC.
..............................................................
...
Read this section to learn more about the companies that provide
marketing, investment management, and shareholder account
services to Putnam funds and their shareholders.

<PAGE>
FINANCIAL HIGHLIGHTS

The following table present per share financial
information for the life of the fund. This information has been
audited and reported on by the independent accountants.
The "Report of independent accountants" and financial statements
included in the Trust's annual report to shareholders for the
1996 fiscal year are incorporated by reference into this
prospectus. The Trust's annual report, which contains additional
unaudited performance information, is available without charge
upon request.

<PAGE>
<TABLE> <CAPTION>
FINANCIAL HIGHLIGHTS
( outstanding throughout the period)

Investment Operations
Less Distributions :
Net Realized and
From In Excess
of
Net Unrealized Total from
From NetNet Realized Net
Realized
Period Net Asset Value , Investment Gain (Loss) on
Investment Investment Gain on Gain
on
ended Beginning of Period Loss Investments Operations
Income Investments
Investments
<S> <C> <C> <C> <C>
<C> <C> <C>

December 31, 1996 $15.63 $(.01) $1.60 $1.59
$- $- $-
December 31, 1995 10.82 - 4.84 4.84
-(e) (.02) -(e)
December 31, 1994* *10.00 -(a) .82 .82
- - -

Total Ratio of
Investment Ratio of
Net Investment
Net Asset Return at Net Assets Expenses to
Income to Average
Return of Total Value, End Net Asset End of Period
Average Net Average Net
Portfolio
commission
Capital Distributions of Period Value(%)(b)(in thousands)
Assets(%)(c) Assets(%)
Turnover(%) rate
paid(d)

$- $- $17.22 10.17 $1,674,197 .72
(.13) 57.94
$.0488
(.01) (.03) 15.63 44.87 515,109 .84
(.03) 30.87
- - 10.82 8.20 * 68,592 .47(a) *
.03(a) * 32.77 *

<FN>
(*) Not annualized.
(**)
For the period May 2, 1994 (commencement of operations) to December 31, 1994.
(a) Reflects an expense limitation in effect during the period. As a result
of expense limitations, expenses of the
fund for the period ended December 31, 1994 reflect a reduction of
approximately $0.02 per share.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods
ended on or after December
31, 1995 includes amounts paid through expense offset and brokerage
service arrangements. Prior period ratios
exclude these amounts.
(d) The fund is required to disclose the average commission rate paid per
share for fiscal periods beginning on or
after September 1, 1995.
(e) Per share distributions were less that $0.01 per share.
/TABLE
<PAGE>
THE TRUST

INVESTMENT OBJECTIVE AND POLICIES OF THE FUND

The investment objective and policies of the fund may, unless
otherwise specifically stated, be changed by the Trustees without
a vote of the shareholders. As a matter of policy, the Trustees
would not materially change the investment objective of the fund
without shareholder approval. The fund is not intended to be a
complete investment program , and there is no assurance
that the fund will achieve its objective.

Additional portfolios with differing investment objectives and
policies may be created from time to time for use as funding
vehicles for insurance company separate accounts or for other
insurance products. In addition, the Trustees may, subject to
any necessary regulatory approvals, eliminate the fund or divide
the fund into two or more classes of shares with such special or
relative rights and privileges as the Trustees may determine.

PUTNAM VT NEW OPPORTUNITIES FUND

Putnam VT New Opportunities Fund seeks long-term capital
appreciation. The fund seeks its objective by investing
principally in common stocks of companies in sectors of the
economy which Putnam Investment Management , Inc.
("Putnam Management") believes possess above-average long-
term growth potential. The fund will generally invest in
companies which Putnam Management identifies as
offering the best prospects for long-term growth within a
particular sector. Current dividend income is only an incidental
consideration. The fund invests primarily in common stocks, but
may also purchase convertible bonds, convertible preferred
stocks, warrants, preferred stocks and debt securities if Putnam
Management believes they would help achieve the fund's objective
of capital appreciation. The fund may invest up to 20% of its
assets in foreign securities. For a discussion of the risks
associated with foreign investing, see "Foreign investments."
The fund may also engage in foreign currency exchange
transactions and transactions in futures and options, enter into
repurchase agreements, loan its portfolio securities and purchase
securities for future delivery. See below for a
discussion of these securities and types of transactions and the
risks associated with them. The fund may also hold a portion of
its assets in cash and money market instruments. The fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the fund's
basic investment strategy inconsistent with the best interests of
the fund's shareholders. See below for a discussion of
these strategies.