MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND INC
497, 2001-01-19
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<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000

                                       OF

                         EUROPEAN REAL ESTATE PORTFOLIO
                          ASIAN REAL ESTATE PORTFOLIO
                           U.S. REAL ESTATE PORTFOLIO

                                 PORTFOLIOS OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of shares of the European Real Estate and
Asian Real Estate Portfolios. Shares of the European Real Estate and Asian Real
Estate Portfolios purchased on or after January 29, 2001 and redeemed within 60
days of purchase will be subject to a 2% redemption fee (short-term trading
fee). The redemption fee is payable to the Portfolio and is designed to protect
the Portfolio and remaining shareholders from the effects of short-term trading
in Portfolio shares. The Fund may waive the redemption fee in certain instances,
including when it determines that imposition of the redemption fee is not
necessary to protect the Portfolio from the effects of short-term trading.

The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO" on page 6 are
hereby deleted and replaced with the following:

The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolios. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                                   EUROPEAN           ASIAN            U.S.
                                                                  REAL ESTATE      REAL ESTATE      REAL ESTATE
                                                                   PORTFOLIO        PORTFOLIO        PORTFOLIO
<S>                                                               <C>              <C>              <C>
SHAREHOLDER FEES
---------------------------------------------------------------------------------------------------------------
 REDEMPTION FEE (AS A % OF THE AMOUNT REDEEMED)+                      2.00%            2.00%            NONE
---------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1999 ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)*
MANAGEMENT FEES
---------------------------------------------------------------------------------------------------------------
 CLASS A                                                              0.80%            0.80%            0.80%
---------------------------------------------------------------------------------------------------------------
 CLASS B                                                              0.80%            0.80%            0.80%
12B-1 FEES
---------------------------------------------------------------------------------------------------------------
 CLASS A                                                              NONE             NONE             NONE
---------------------------------------------------------------------------------------------------------------
 CLASS B                                                              0.25%            0.25%            0.25%
OTHER EXPENSES
---------------------------------------------------------------------------------------------------------------
 CLASS A                                                              0.91%            2.39%            0.22%
---------------------------------------------------------------------------------------------------------------
 CLASS B                                                              0.91%            2.05%            0.22%
TOTAL ANNUAL FUND OPERATING EXPENSES
---------------------------------------------------------------------------------------------------------------
 CLASS A                                                              1.71%            3.19%            1.02%
---------------------------------------------------------------------------------------------------------------
 CLASS B                                                              1.96%            3.10%            1.27%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
<PAGE>
The paragraph under "HOW TO REDEEM SHARES" on page 10 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares of the European Real Estate and Asian Real Estate
Portfolios redeemed within 60 days of purchase will be subject to a 2%
redemption fee, payable to the Portfolio. The redemption fee is designed to
protect the Portfolio and remaining shareholders from the effects of short-term
trading. The Fund may waive the redemption fee in certain instances, including
when it determines that imposition of the redemption fee is not necessary to
protect the Portfolio from the effects of short-term trading. The redemption fee
is calculated based on and deducted from the redemption proceeds. The Fund will
ordinarily distribute redemption proceeds in cash within one business day of
your redemption request, but it may take up to seven days. However, if you
purchased shares by check, the Fund will not distribute redemption proceeds
until it has collected your purchase payment, which may take up to eight days.
In certain circumstances, for example, if payment of redemption proceeds in cash
would be detrimental to the remaining shareholders, the Portfolio may pay a
portion of the redemption proceeds by a distribution-in-kind of readily
marketable portfolio securities.
                            ------------------------

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000

                                       OF

                         GLOBAL FIXED INCOME PORTFOLIO
                              HIGH YIELD PORTFOLIO

                               PORTFOLIOS OF THE

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of shares of the Global Fixed Income
Portfolio. Shares of the Global Fixed Income Portfolio purchased on or after
January 29, 2001 and redeemed within 60 days of purchase will be subject to a 2%
redemption fee (short-term trading fee). The redemption fee is payable to the
Portfolio and is designed to protect the Portfolio and remaining shareholders
from the effects of short-term trading in Portfolio shares. The Fund may waive
the redemption fee in certain instances, including when it determines that
imposition of the redemption fee is not necessary to protect the Portfolio from
the effects of short-term trading.
The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO" on page 5 are
hereby deleted and replaced with the following:
The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolios. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                                     GLOBAL             HIGH
                                                                  FIXED INCOME         YIELD
                                                                    PORTFOLIO        PORTFOLIO
<S>                                                               <C>                <C>
Shareholder Fees
-----------------------------------------------------------------------------------------------
 Redemption Fee (AS A % OF THE AMOUNT REDEEMED)+                       2.00%            None
-----------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1999 Annual Fund Operating Expenses
(EXPENSES DEDUCTED FROM FUND ASSETS)*
Management Fees
-----------------------------------------------------------------------------------------------
 Class A                                                               0.40%           0.375%
-----------------------------------------------------------------------------------------------
 Class B                                                               0.40%           0.375%
12b-1 Fees
-----------------------------------------------------------------------------------------------
 Class A                                                               None             None
-----------------------------------------------------------------------------------------------
 Class B                                                               0.15%++          0.25%
Other Expenses
-----------------------------------------------------------------------------------------------
 Class A                                                               0.36%            0.22%
-----------------------------------------------------------------------------------------------
 Class B                                                               0.36%            0.23%
Total Annual Fund Operating Expenses
-----------------------------------------------------------------------------------------------
 Class A                                                               0.76%            0.59%
-----------------------------------------------------------------------------------------------
 Class B                                                               0.91%            0.85%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
++ THE ACTUAL 12B-1 FEE PAID BY THE PORTFOLIO FOR THE LAST FISCAL YEAR WAS 0.15%
   BECAUSE MORGAN STANLEY HAS VOLUNTARILY AGREED TO WAIVE 0.10% OF THE 0.25%
   DISTRIBUTION FEE IT IS ENTITLED TO RECEIVE.
<PAGE>
The paragraph under "How to redeem shares" on page 9 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares of the Global Fixed Income Portfolio redeemed
within 60 days of purchase will be subject to a 2% redemption fee, payable to
the Portfolio. The redemption fee is designed to protect the Portfolio and
remaining shareholders from the effects of short-term trading. The Fund may
waive the redemption fee in certain instances, including when it determines that
imposition of the redemption fee is not necessary to protect the Portfolio from
the effects of short-term trading. The redemption fee is calculated based on and
deducted from the redemption proceeds. The Fund will ordinarily distribute
redemption proceeds in cash within one business day of your redemption request,
but it may take up to seven days. However, if you purchased shares by check, the
Fund will not distribute redemption proceeds until it has collected your
purchase payment, which may take up to eight days. In certain circumstances, for
example, if payment of redemption proceeds in cash would be detrimental to the
remaining shareholders, the Portfolio may pay a portion of the redemption
proceeds by a distribution-in-kind of readily marketable portfolio securities.
                            ------------------------

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000

                                       OF

                         INTERNATIONAL MAGNUM PORTFOLIO

                                 A PORTFOLIO OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of Portfolio shares. Portfolio shares
purchased on or after January 29, 2001 and redeemed within 60 days of purchase
will be subject to a 2% redemption fee (short-term trading fee). The redemption
fee is payable to the Portfolio and is designed to protect the Portfolio and
remaining shareholders from the effects of short-term trading in Portfolio
shares. The Fund may waive the redemption fee in certain instances, including
when it determines that imposition of the redemption fee is not necessary to
protect the Portfolio from the effects of short-term trading.

The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO" on page 4 are
hereby deleted and replaced with the following:

The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolio. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                                   INTERNATIONAL MAGNUM
                                                                         PORTFOLIO
<S>                                                               <C>
Shareholder Fees
-----------------------------------------------------------------------------------------
 Redemption Fee (AS A % OF THE AMOUNT REDEEMED)+                            2.00%
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
1999 Annual Fund Operating Expenses
(EXPENSES DEDUCTED FROM FUND ASSETS)*
Management Fees
-----------------------------------------------------------------------------------------
 Class A                                                                    0.80%
-----------------------------------------------------------------------------------------
 Class B                                                                    0.80%
12b-1 Fees
-----------------------------------------------------------------------------------------
 Class A                                                                    None
-----------------------------------------------------------------------------------------
 Class B                                                                    0.25%
Other Expenses
-----------------------------------------------------------------------------------------
 Class A                                                                    0.31%
-----------------------------------------------------------------------------------------
 Class B                                                                    0.30%
Total Annual Fund Operating Expenses
-----------------------------------------------------------------------------------------
 Class A                                                                    1.11%
-----------------------------------------------------------------------------------------
 Class B                                                                    1.35%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
<PAGE>
The paragraph under "How to redeem shares" on page 7 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares redeemed within 60 days of purchase will be subject
to a 2% redemption fee, payable to the Portfolio. The redemption fee is designed
to protect the Portfolio and remaining shareholders from the effects of
short-term trading. The Fund may waive the redemption fee in certain instances,
including when it determines that imposition of the redemption fee is not
necessary to protect the Portfolio from the effects of short-term trading. The
redemption fee is calculated based on and deducted from the redemption proceeds.
The Fund will ordinarily distribute redemption proceeds in cash within one
business day of your redemption request, but it may take up to seven days.
However, if you purchased shares by check, the Fund will not distribute
redemption proceeds until it has collected your purchase payment, which may take
up to eight days. In certain circumstances, for example, if payment of
redemption proceeds in cash would be detrimental to the remaining shareholders,
the Portfolio may pay a portion of the redemption proceeds by a
distribution-in-kind of readily marketable portfolio securities.
                            ------------------------

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000

                                       OF

                             ASIAN EQUITY PORTFOLIO
                           JAPANESE EQUITY PORTFOLIO

                                 PORTFOLIOS OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of shares of the Portfolios. Shares of the
Portfolios purchased on or after January 29, 2001 and redeemed within 60 days of
purchase will be subject to a 2% redemption fee (short-term trading fee). The
redemption fee is payable to the Portfolio and is designed to protect the
Portfolio and remaining shareholders from the effects of short-term trading in
Portfolio shares. The Fund may waive the redemption fee in certain instances,
including when it determines that imposition of the redemption fee is not
necessary to protect the Portfolio from the effects of short-term trading.

The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO" on page 5 are
hereby deleted and replaced with the following:

The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolios. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                                  ASIAN EQUITY       JAPANESE EQUITY
                                                                    PORTFOLIO           PORTFOLIO
<S>                                                               <C>                <C>
Shareholder Fees
-----------------------------------------------------------------------------------------------------
 Redemption Fee (AS A % OF THE AMOUNT REDEEMED)+                       2.00%               2.00%
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
1999 Annual Fund Operating Expenses
(EXPENSES DEDUCTED FROM FUND ASSETS)*
Management Fees
-----------------------------------------------------------------------------------------------------
 Class A                                                               0.80%               0.80%
-----------------------------------------------------------------------------------------------------
 Class B                                                               0.80%               0.80%
12b-1 Fees
-----------------------------------------------------------------------------------------------------
 Class A                                                               None                None
-----------------------------------------------------------------------------------------------------
 Class B                                                               0.25%               0.25%
Other Expenses
-----------------------------------------------------------------------------------------------------
 Class A                                                               0.81%               0.34%
-----------------------------------------------------------------------------------------------------
 Class B                                                               0.82%               0.34%
Total Annual Fund Operating Expenses
-----------------------------------------------------------------------------------------------------
 Class A                                                               1.61%               1.14%
-----------------------------------------------------------------------------------------------------
 Class B                                                               1.87%               1.39%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
<PAGE>
The paragraph under "How to redeem shares" on page 9 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares of a Portfolio redeemed within 60 days of purchase
will be subject to a 2% redemption fee, payable to the Portfolio. The redemption
fee is designed to protect the Portfolio and remaining shareholders from the
effects of short-term trading. The Fund may waive the redemption fee in certain
instances, including when it determines that imposition of the redemption fee is
not necessary to protect the Portfolio from the effects of short-term trading.
The redemption fee is calculated based on and deducted from the redemption
proceeds. The Fund will ordinarily distribute redemption proceeds in cash within
one business day of your redemption request, but it may take up to seven days.
However, if you purchased shares by check, the Fund will not distribute
redemption proceeds until it has collected your purchase payment, which may take
up to eight days. In certain circumstances, for example, if payment of
redemption proceeds in cash would be detrimental to the remaining shareholders,
the Portfolio may pay a portion of the redemption proceeds by a
distribution-in-kind of readily marketable portfolio securities.

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

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000

                                       OF

                           EMERGING MARKETS PORTFOLIO
                        EMERGING MARKETS DEBT PORTFOLIO
                            LATIN AMERICAN PORTFOLIO

                                 PORTFOLIOS OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of shares of the Emerging Markets and
Emerging Markets Debt Portfolios. Shares of the Emerging Markets and Emerging
Markets Debt Portfolios purchased on or after January 29, 2001 and redeemed
within 60 days of purchase will be subject to a 2% redemption fee (short-term
trading fee). The redemption fee is payable to the Portfolio and is designed to
protect the Portfolio and remaining shareholders from the effects of short-term
trading in Portfolio shares. The Fund may waive the redemption fee in certain
instances, including when it determines that imposition of the redemption fee is
not necessary to protect the Portfolio from the effects of short-term trading.

The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO" on page 6 are
hereby deleted and replaced with the following:

The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolios. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                                   EMERGING          EMERGING            LATIN
                                                                   MARKETS            MARKETS           AMERICAN
                                                                  PORTFOLIO       DEBT PORTFOLIO       PORTFOLIO
<S>                                                               <C>             <C>                  <C>
SHAREHOLDER FEES
-----------------------------------------------------------------------------------------------------------------
 REDEMPTION FEE (AS A % OF THE AMOUNT REDEEMED)+                     2.00%              2.00%           NONE
-----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
1999 ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)*
MANAGEMENT FEES
-----------------------------------------------------------------------------------------------------------------
 CLASS A                                                             1.25%              0.75%             1.10%
-----------------------------------------------------------------------------------------------------------------
 CLASS B                                                             1.25%              0.75%             1.10%
12b-1 FEES
-----------------------------------------------------------------------------------------------------------------
 CLASS A                                                             NONE               NONE              NONE
-----------------------------------------------------------------------------------------------------------------
 CLASS B                                                             0.25%              0.25%             0.25%
OTHER EXPENSES
-----------------------------------------------------------------------------------------------------------------
 CLASS A                                                             0.39%              0.65%             1.02%
-----------------------------------------------------------------------------------------------------------------
 CLASS B                                                             0.38%              0.65%             1.00%
TOTAL ANNUAL FUND OPERATING EXPENSES
-----------------------------------------------------------------------------------------------------------------
 CLASS A                                                             1.64%              1.40%             2.12%
-----------------------------------------------------------------------------------------------------------------
 CLASS B                                                             1.88%              1.65%             2.35%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
<PAGE>
The paragraph under "HOW TO REDEEM SHARES" on page 10 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares of the Emerging Markets and Emerging Markets Debt
Portfolios redeemed within 60 days of purchase will be subject to a 2%
redemption fee, payable to the Portfolio. The redemption fee is designed to
protect the Portfolio and remaining shareholders from the effects of short-term
trading. The Fund may waive the redemption fee in certain instances, including
when it determines that imposition of the redemption fee is not necessary to
protect the Portfolio from the effects of short-term trading. The redemption fee
is calculated based on and deducted from the redemption proceeds. The Fund will
ordinarily distribute redemption proceeds in cash within one business day of
your redemption request, but it may take up to seven days. However, if you
purchased shares by check, the Fund will not distribute redemption proceeds
until it has collected your purchase payment, which may take up to eight days.
In certain circumstances, for example, if payment of redemption proceeds in cash
would be detrimental to the remaining shareholders, the Portfolio may pay a
portion of the redemption proceeds by a distribution-in-kind of readily
marketable portfolio securities.

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

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000
                           AS PREVIOUSLY SUPPLEMENTED
                                ON JULY 27, 2000
                              AND OCTOBER 23, 2000

                                       OF

                            GLOBAL EQUITY PORTFOLIO
                         INTERNATIONAL EQUITY PORTFOLIO
                       INTERNATIONAL SMALL CAP PORTFOLIO
                           EUROPEAN EQUITY PORTFOLIO

                                 PORTFOLIOS OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of shares of the Portfolios. Shares of the
Portfolios purchased on or after January 29, 2001 and redeemed within 60 days of
purchase will be subject to a 2% redemption fee (short-term trading fee). The
redemption fee is payable to the Portfolio and is designed to protect the
Portfolio and remaining shareholders from the effects of short-term trading in
Portfolio shares. The Fund may waive the redemption fee in certain instances,
including when it determines that imposition of the redemption fee is not
necessary to protect the Portfolio from the effects of short-term trading. In
addition, the 0.50% transaction fee for the International Small Cap Portfolio is
hereby eliminated.
The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO" on page 7 are
hereby deleted and replaced with the following:
The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolios. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                       GLOBAL        INTERNATIONAL       INTERNATIONAL        EUROPEAN
                                                       EQUITY            EQUITY            SMALL CAP           EQUITY
                                                     PORTFOLIO         PORTFOLIO           PORTFOLIO         PORTFOLIO
<S>                                                  <C>             <C>                 <C>                 <C>
Shareholder Fees
-----------------------------------------------------------------------------------------------------------------------
 Redemption Fee (AS A % OF THE AMOUNT
 REDEEMED)+                                             2.00%             2.00%               2.00%             2.00%
-----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------
1999 Annual Fund Operating Expenses
(EXPENSES DEDUCTED FROM FUND ASSETS)*

Management Fees
-----------------------------------------------------------------------------------------------------------------------
 Class A                                                0.80%             0.80%               0.95%             0.80%
-----------------------------------------------------------------------------------------------------------------------
 Class B                                                0.80%             0.80%             N/A                 0.80%

12b-1 Fees
-----------------------------------------------------------------------------------------------------------------------
 Class A                                                None              None                None              None
-----------------------------------------------------------------------------------------------------------------------
 Class B                                                0.25%             0.25%             N/A                 0.25%
Other Expenses
-----------------------------------------------------------------------------------------------------------------------
 Class A                                                0.26%             0.21%               0.25%             0.42%
-----------------------------------------------------------------------------------------------------------------------
 Class B                                                0.26%             0.21%             N/A                 0.43%
Total Annual Fund Operating Expenses
-----------------------------------------------------------------------------------------------------------------------
 Class A                                                1.06%             1.01%               1.20%             1.22%
-----------------------------------------------------------------------------------------------------------------------
 Class B                                                1.31%             1.26%             N/A                 1.48%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
<PAGE>
The second paragraph under "How to purchase shares" on page 11 is hereby deleted
and replaced with the following:

The minimum initial investment generally is $500,000 for Class A shares and
$100,000 for Class B shares of each Portfolio. The minimum additional investment
generally is $1,000 for each account that you have. If the value of your account
falls below the minimum initial investment amount for Class A shares or Class B
shares as a result of share redemptions, the Fund will notify you. Your account
may be subject to involuntary conversion from Class A shares to Class B shares
or involuntary redemption in the case of Class B shares if the value of your
account remains below the minimum initial investment amount for 60 consecutive
days. MSDW Investment Management may waive the minimum initial investment and
involuntary conversion or redemption features for certain investors, including
individuals purchasing through a Financial Intermediary.

The paragraph under "How to redeem shares" on page 12 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares of a Portfolio redeemed within 60 days of purchase
will be subject to a 2% redemption fee, payable to the Portfolio. The redemption
fee is designed to protect the Portfolio and remaining shareholders from the
effects of short-term trading. The Fund may waive the redemption fee in certain
instances, including when it determines that imposition of the redemption fee is
not necessary to protect the Portfolio from the effects of short-term trading.
The redemption fee is calculated based on and deducted from the redemption
proceeds. The Fund will ordinarily distribute redemption proceeds in cash within
one business day of your redemption request, but it may take up to seven days.
However, if you purchased shares by check, the Fund will not distribute
redemption proceeds until it has collected your purchase payment, which may take
up to eight days. In certain circumstances, for example, if payment of
redemption proceeds in cash would be detrimental to the remaining shareholders,
the Portfolio may pay a portion of the redemption proceeds by a
distribution-in-kind of readily marketable portfolio securities.
                            ------------------------

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
                        TO PROSPECTUS DATED MAY 1, 2000

                                       OF

                   ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO

                                 A PORTFOLIO OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Prospectus is hereby amended and supplemented to reflect the imposition of a
redemption fee on certain redemptions of Portfolio shares. Portfolio shares
purchased on or after January 29, 2001 and redeemed within 60 days of purchase
will be subject to a 2% redemption fee (short-term trading fee). The redemption
fee is payable to the Portfolio and is designed to protect the Portfolio and
remaining shareholders from the effects of short-term trading in Portfolio
shares. The Fund may waive the redemption fee in certain instances, including
when it determines that imposition of the redemption fee is not necessary to
protect the Portfolio from the effects of short-term trading.

The paragraph and chart under "FEES AND EXPENSES OF THE PORTFOLIO"on page 4 are
hereby deleted and replaced with the following:

The Commission requires that the Fund disclose in the table below the fees and
expenses that you may pay if you buy and hold shares of the Portfolio. The
Annual Fund Operating Expenses in the table below do not reflect voluntary fee
waivers, which are described in the footnotes below, and/or expense
reimbursements from MSDW Investment Management.

<TABLE>
<CAPTION>
                                                                    ACTIVE INTERNATIONAL
                                                                    ALLOCATION PORTFOLIO
<S>                                                               <C>
SHAREHOLDER FEES
------------------------------------------------------------------------------------------
 REDEMPTION FEE (AS A % OF THE AMOUNT REDEEMED)+                            2.00%
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
1999 ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)*
MANAGEMENT FEES
------------------------------------------------------------------------------------------
 CLASS A                                                                    0.65%
------------------------------------------------------------------------------------------
 CLASS B                                                                    0.65%
12b-1 FEES
------------------------------------------------------------------------------------------
 CLASS A                                                                    NONE
------------------------------------------------------------------------------------------
 CLASS B                                                                    0.25%
OTHER EXPENSES
------------------------------------------------------------------------------------------
 CLASS A                                                                    0.27%
------------------------------------------------------------------------------------------
 CLASS B                                                                    0.27%
TOTAL ANNUAL FUND OPERATING EXPENSES
------------------------------------------------------------------------------------------
 CLASS A                                                                    0.92%
------------------------------------------------------------------------------------------
 CLASS B                                                                    1.17%
</TABLE>

+ PAYABLE TO THE PORTFOLIO ON SHARES REDEEMED WITHIN 60 DAYS OF PURCHASE. THE
  REDEMPTION FEE MAY BE WAIVED BY THE FUND. SEE "SHAREHOLDER INFORMATION" FOR
  MORE INFORMATION ON REDEMPTION FEES.
<PAGE>
The paragraph under "HOW TO REDEEM SHARES" on page 7 is hereby deleted and
replaced with the following:

You may redeem Portfolio shares directly from the Fund, through the Distributor
or through your Financial Intermediary, each described above under "How to
purchase shares." The redemption price will be the net asset value per share
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. Shares redeemed within 60 days of purchase will be subject
to a 2% redemption fee, payable to the Portfolio. The redemption fee is designed
to protect the Portfolio and remaining shareholders from the effects of
short-term trading. The Fund may waive the redemption fee in certain instances,
including when it determines that imposition of the redemption fee is not
necessary to protect the Portfolio from the effects of short-term trading. The
redemption fee is calculated based on and deducted from the redemption proceeds.
The Fund will ordinarily distribute redemption proceeds in cash within one
business day of your redemption request, but it may take up to seven days.
However, if you purchased shares by check, the Fund will not distribute
redemption proceeds until it has collected your purchase payment, which may take
up to eight days. In certain circumstances, for example, if payment of
redemption proceeds in cash would be detrimental to the remaining shareholders,
the Portfolio may pay a portion of the redemption proceeds by a
distribution-in-kind of readily marketable portfolio securities.

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

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
                       SUPPLEMENT DATED JANUARY 18, 2001
            TO STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 2000

                                       OF

              MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
                                 P.O. BOX 2798
                             BOSTON, MASSACHUSETTS
                                   02208-2798
                            ------------------------

The Statement of Additional Information is hereby amended and supplemented to
reflect the imposition of a redemption fee on certain redemptions of Portfolio
shares. Shares of certain Portfolios purchased on or after January 29, 2001 and
redeemed within 60 days of purchase will be subject to a 2% redemption fee
(short-term trading fee). The redemption fee is payable to the Portfolio and is
designed to protect the Portfolio and remaining shareholders from the effects of
short-term trading in Portfolio shares. The Fund may waive the redemption fee in
certain instances, including when it determines that imposition of the
redemption fee is not necessary to protect the Portfolio from the effects of
short-term trading. In addition, the 0.50% transaction fee for the International
Small Cap Portfolio is hereby eliminated.
                            ------------------------

The second paragraph under "PURCHASE OF SHARES" on page 27 is hereby deleted and
replaced with the following:

Shares of each Portfolio may be purchased at the net asset value per share next
determined after receipt by the Fund or its designee of a purchase order as
described under "Methods of Purchase" and "Investment through Financial
Intermediaries." Class B Shares of the Money Market Portfolio are available for
purchase only through Financial Intermediaries (as discussed below) that have
made arrangements with the Fund. The net asset value per share of each Portfolio
is calculated on days that the NYSE is open for business. Net asset value per
share is determined (i) for each non-money market Portfolio, as of the close of
trading of the NYSE (normally 4:00 p.m. Eastern Time); (ii) for the Money Market
Portfolio, as of 12:00 noon Eastern Time; and (iii) for the Municipal Money
Market Portfolio, as of 11:00 a.m. Eastern Time (for each Portfolio, the
"Pricing Time").
                            ------------------------

The second paragraph under "REDEMPTION OF SHARES" on page 29 is hereby deleted
and replaced with the following:

Class A shares of each Portfolio and Class B shares of each Portfolio, except
for the International Small Cap and Municipal Money Market Portfolios that do
not offer Class B shares, may be redeemed at any time at the net asset value per
share calculated at the next Pricing Time, which may be more or less than the
purchase price of your shares. Shares of the European Real Estate, Asian Real
Estate, Asian Equity, Japanese Equity, Emerging Markets, Emerging Markets Debt,
Global Equity, International Equity, International Small Cap, European Equity,
International Magnum, Global Fixed Income and Active International Allocation
Portfolios redeemed within 60 days of purchase will be subject to a 2%
redemption fee, payable to the Portfolio. The redemption fee is designed to
protect the Portfolio and remaining shareholders from the effects of short-term
trading. The Fund may waive the redemption fee in certain instances, including
when it determines that imposition of the redemption fee is not necessary to
protect the Portfolio from the effects of short-term trading. The redemption fee
is calculated based on and deducted from the redemption proceeds. The redemption
fee does not apply to Portfolio shares acquired through reinvestment of
dividends or distributions. In satisfying a redemption request, the Fund will
automatically redeem shares acquired through reinvestment of dividends and
distributions or held longer than 60 days, to the extent possible, unless a
shareholder requests otherwise at the time of redemption.
<PAGE>
The first paragraph under "EXCHANGE FEATURES" on page 30 is hereby deleted and
replaced with the following:

You may exchange shares of each Portfolio that you own for shares of any other
available Portfolio(s) of the Fund, subject to certain limitations. Any such
exchange will be based on the respective net asset values of the shares
involved. There is no sales commission or sales charge of any kind (although a
2% redemption fee may be charged on exchanges of certain Portfolios within 60
days of purchase). You cannot exchange shares of the International Equity
Portfolio because it is currently closed to new investors. In addition, certain
Portfolios are not operational or may be unavailable to shareholders who
purchased Portfolio shares through a Financial Intermediary. Contact your
Financial Intermediary to determine which Portfolios are available for exchange.
                            ------------------------

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE


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