ALLIANCE INSTITUTIONAL RESERVES INC, 485BPOS, 2000-08-29

ALLIANCE INSTITUTIONAL RESERVES INC
485BPOS, 2000-08-29

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<PAGE>

As filed with the Securities and Exchange
Commission on August 29, 2000

File Nos. 33-34001
811-6068

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 18 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940

Amendment No. 18 X

ALLIANCE INSTITUTIONAL RESERVES, INC.
(Exact Name of Registrant as Specified in Charter)

1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including
Area Code:(800) 221-5672

EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York l0105
(Name and address of agent for service)

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

<PAGE>

If appropriate, check the following box:
/ / This post-effective amendment designates a new
effective date for a previously filed post-
effective amendment.

<PAGE>

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

Alliance
Institutional
Reserves

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

o Prime Portfolio
o Government Portfolio
o Tax-Free Portfolio
o Treasury Portfolio

Prospectus
Class A Shares
September 1, 2000

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.

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

<PAGE>

Alliance Institutional Reserves, Inc. consists of five distinct
Portfolios. This prospectus describes the Class A shares of four of the
Portfolios--the Prime Portfolio, Government Portfolio, Tax-Free Portfolio and
Treasury Portfolio. The Portfolios' investment adviser is Alliance Capital
Management L.P., a global investment manager providing diversified services to
institutions and individuals through a broad line of investments including more
than 100 mutual funds.

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RISK/RETURN SUMMARY
--------------------------------------------------------------------------------

The following is a summary of certain key information about the
Portfolios. You will find additional information about the Portfolios, including
a detailed description of the risks of an investment in each Portfolio, after
this summary.

Objectives: The investment objectives of each Portfolio are--in the
following order of priority--safety of principal, excellent liquidity and
maximum current income (exempt from Federal income taxes to the extent described
below in the case of the Tax-Free Portfolio) to the extent consistent with the
first two objectives.

Principal Investment Strategy: The Portfolios are "money market funds"
that seek to maintain a stable net asset value of $1.00 per share. Each
Portfolio pursues its objectives by investing in a portfolio of high-quality,
U.S. dollar-denominated money market securities.

The Portfolios invest primarily in the following money market securities:

o Prime Portfolio Obligations of the U.S. Government, its agencies or
instrumentalities, obligations of certain banks and savings and loan
associations, asset-backed securities and high-quality securities of corporate
issuers (including adjustable rate securities).

o Government Portfolio Obligations of the U.S. Government, its agencies or
instrumentalities and repurchase agreements.

o Tax-Free Portfolio High-quality state and municipal government
tax-exempt debt obligations.

o Treasury Portfolio Obligations of the U.S. Treasury, such as bills,
notes and bonds and repurchase agreements.

Principal Risks: The principal risks of investing in each Portfolio are:

o Interest Rate Risk This is the risk that changes in interest rates will
adversely affect the yield or value of a Portfolio's investments in debt
securities.

o Credit Risk This is the risk that the issuer or guarantor of a debt
security will be unable or unwilling to make timely interest or principal
payments, or to otherwise honor its obligations. The degree of risk for a
particular security may be reflected in its credit rating. Credit risk includes
the possibility that any of a Portfolio's investments will have its credit
ratings downgraded.

In addition, a principal risk of investing in the Tax-Free Portfolio is:

o Municipal Market Risk This is the risk that special factors, such as
political and legislative changes and local business and economic developments,
may adversely affect the yield or value of the Portfolio's investments.

Another important thing for you to note:

An investment in the Portfolios is not a deposit in a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Portfolios seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Portfolios.

PERFORMANCE AND BAR CHART INFORMATION

For each Portfolio, the Risk/Return Summary in cludes a table showing the
Portfolio's average annual total returns and a bar chart showing the Portfolio's
annual total returns. The table and the bar chart provide an indication of the
historical risk of an investment in each Portfolio by showing:

o the Portfolio's average annual total returns for one and five years and
the life of the Portfolio; and

o changes in the Portfolio's performance from year to year over the life
of the Portfolio.

A Portfolio's past performance does not necessarily indicate how it will
perform in the future.

You may obtain current seven-day yield information for any Portfolio by
calling (800) 237-5822.

2
<PAGE>

Prime Portfolio

PERFORMANCE TABLE

Since
1 Year 5 Years Inception*
--------------------------------------------------------------------------------
5.20% 5.55% 5.45%
--------------------------------------------------------------------------------

* Inception date: 8/30/90.

[The folowing was represented as a bar chart in the printed material.]

BAR CHART

n/a 6.29% 3.98% 3.24% 4.29% 5.97% 5.42% 5.62% 5.54% 5.20%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

Calender Year End

During the period shown in the bar chart, the highest return for a quarter
was 1.69% (quarter ending March 31, 1991) and the lowest return for a quarter
was .78% (quarter ending June 30, 1993).

Government Portfolio

PERFORMANCE TABLE

Since
1 Year 5 Years Inception**
--------------------------------------------------------------------------------
5.09% 5.44% 4.83%
--------------------------------------------------------------------------------

[The folowing was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a 3.82% 3.16% 4.22% 5.85% 5.31% 5.51% 5.42% 5.09%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

Calender Year End

During the period shown in the bar chart, the highest return for a quarter
was 1.46% (quarter ending June 30, 1995) and the lowest return for a quarter was
.77% (quarter ending September 30, 1993).

Tax-Free Portfolio

PERFORMANCE TABLE

Since
1 Year 5 Years Inception**
--------------------------------------------------------------------------------
3.23% 3.56% 3.39%
--------------------------------------------------------------------------------

** Inception date: 7/22/91.

[The folowing was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a 3.37% 2.45% 2.83% 3.87% 3.55% 3.68% 3.47% 3.23%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

Calender Year End

During the period shown in the bar chart, the highest return for a quarter
was .98% (quarter ending June 30, 1995) and the lowest return for a quarter was
.56% (quarter ending March 31, 1994).

3
<PAGE>

Treasury Portfolio

PERFORMANCE TABLE

Since
1 Year Inception***
--------------------------------------------------------------------------------
4.82% 4.90%
--------------------------------------------------------------------------------

*** Inception date: 10/15/98.

[The folowing was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a n/a n/a n/a n/a n/a n/a n/a 4.82%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

Calender Year End

During the period shown in the bar chart, the highest return for a quarter
was 1.32% (quarter ending September 30, 1999) and the lowest return for a
quarter was 1.12% (quarter ending March 31, 1999).

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FEES AND EXPENSES OF THE PORTFOLIOS
--------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolios.

Shareholder Fees (fees paid directly from your investment)

None

Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio
assets)

<TABLE>
<CAPTION>
ANNUAL PORTFOLIO OPERATING EXPENSES
-------------------------------------
Prime Government Tax-Free Treasury
----- ---------- -------- --------
<S> <C> <C> <C> <C>
Management Fees ........................... .20% .20% .20% .20%
Other Expenses ............................ .04% .07% .08% .39%
--- --- --- ---
Total Portfolio Operating Expenses ........ .24% .27% .28% .59%
Expense Reimbursement* .................... (.04)% (.07)% (.08)% (.39)%
--- --- --- ---
Net Expenses .............................. .20% .20% .20% .20%
</TABLE>

--------------
* Reflects Alliance's contractual reimbursement during the Portfolios'
respective current fiscal years of a portion of each Portfolio's operating
expenses so that each Portfolio's expense ratio does not exceed .20%. This
reimbursement extends through the end of the Portfolio's current fiscal
year and may be extended by Alliance for additional one year terms.

EXAMPLES**

The examples are to help you compare the cost of investing in a Portfolio with
the cost of investing in other funds. They assume that you invest $10,000 in the
Portfolio for the time periods indicated and then redeem all of your shares at
the end of those periods. They also assume that your investment has a 5% return
each year, the Portfolio's operating expenses stay the same, and all dividends
and distributions are reinvested. Your actual costs may be higher or lower.

<TABLE>
<CAPTION>
Prime Government Tax-Free Treasury
----- ---------- -------- --------
<S> <C> <C> <C> <C>
1 Year .................................... $ 20 $ 20 $ 20 $ 20
3 Years ................................... $ 73 $ 80 $ 82 $150
5 Years ................................... $131 $145 $149 $290
10 Years .................................. $302 $336 $348 $701
</TABLE>

--------------
** These examples assume that Alliance's agreement to bear a portion of each
Portfolio's operating expenses is not extended beyond its initial period
of one year.

4
<PAGE>

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OTHER INFORMATION ABOUT THE PORTFOLIOS' OBJECTIVES, STRATEGIES, AND RISKS
--------------------------------------------------------------------------------

This section of the prospectus provides a more complete description of the
investment objectives and principal strategies and risks of the Portfolios.

Please note:

o Additional descriptions of each Portfolio's strategies and investments,
as well as other strategies and investments not described below, may be found in
the Portfolios' Statement of Additional Information or SAI.

o There can be no assurance that any Portfolio will achieve its investment
objectives.

Investment Objectives and Strategies

As money market funds, the Portfolios must meet the requirements of
Securities and Exchange Commission Rule 2a-7. The Rule imposes strict
requirements on the investment quality, maturity and diversification of each
Portfolio's investments. Under that Rule, each Portfolio's investments must each
have a remaining maturity of no more than 397 days and the Portfolio must
maintain an average weighted maturity that does not exceed 90 days.

Prime Portfolio

The Prime Portfolio's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;

o certificates of deposit, bankers' acceptances, and interest-bearing
savings deposits that are issued or guaranteed by (i) banks or savings and loan
associations that are members of the Federal Deposit Insurance Corporation, or
(ii) foreign branches of U.S. banks and U.S. branches of foreign banks that have
total assets of at least $1 billion (rated or determined by Alliance to be of
comparable quality);

o high-quality commercial paper (or if not rated, commercial paper
determined by Alliance to be of comparable quality) issued by U.S. or foreign
companies and participation interests in loans made to companies that issue such
commercial paper;

o adjustable rate obligations;

o asset-backed securities;

o restricted securities (i.e., securities subject to legal or contractual
restrictions on resale); and

o repurchase agreements that are fully collateralized.

The Portfolio does not invest 25% or more of its assets in securities of
issuers whose principal business activities are in the same industry. This
limitation does not apply to investments in securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, or to bank obligations,
including certificates of deposit, bankers' acceptances and interest-bearing
savings deposits, issued by U.S. banks (including their foreign branches) and
U.S. branches of foreign banks subject to the same regulation as U.S. banks.

Government Portfolio

The Government Portfolio's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;

o adjustable rate obligations; and

o repurchase agreements that are fully collateralized.

The Government Portfolio may commit up to 15% of its net assets to the
purchase of when-issued U.S. Government securities.

As an operating policy, which may be changed without shareholder approval,
the Portfolio seeks to invest in securities that are legal investments for
Federal credit unions.

Tax-Free Portfolio

The Tax-Free Portfolio seeks maximum current income that is exempt from
Federal income taxes by investing principally in a diversified portfolio of
high-grade municipal securities. The Portfolio's income may be subject to state
or local income taxes.

The Portfolio will limit its investments so that no more than 20% of its
total income is derived from munici pal securities that bear interest subject to
the Federal alternative minimum tax.

Municipal Securities. The Tax-Free Portfolio's investments in municipal
securities include municipal

5
<PAGE>

notes and short-term municipal bonds. Municipal notes are generally used to
provide for short-term capital needs and generally have maturities of 397 days
or less. Examples include tax anticipation and revenue anticipation notes, which
are generally issued in anticipation of various seasonal revenues, bond
anticipation notes, and tax-exempt commercial paper. Short-term municipal bonds
may include general obligation bonds, which are secured by the issuer's pledge
of its faith, credit, and taxing power for payment of principal and interest,
and revenue bonds, which are generally paid from the revenue of a particular
facility or a specific excise or other source.

The Tax-Free Portfolio may invest in adjustable rate obligations whose
interest rates are adjusted either at predesignated periodic intervals or
whenever there is a change in the market rate to which the security's interest
rate is tied. These adjustments tend to minimize changes in the market value of
the obligation and, accordingly, enhance the ability of the Portfolio to
maintain a stable net asset value. Adjustable rate securities purchased may
include participation interests in private activity bonds backed by letters of
credit of Federal Deposit Insurance Corporation member banks having total assets
of more than $1 billion.

The Tax-Free Portfolio's municipal securities at the time of purchase are
rated within the two highest quality ratings of Moody's or Standard & Poor's or
judged by Alliance to be of comparable quality.

The quality and liquidity of the Tax-Free Portfolio's investments in
municipal securities are supported by credit and liquidity enhancements, such as
letters of credit, from third-party financial institutions. The Portfolio
continuously monitors the credit quality of third-parties; however, changes in
the credit quality of these financial institutions could cause the Portfolio's
investments backed by that institution to lose value and affect the Portfolio's
share price.

The Tax-Free Portfolio also may invest in stand-by commitments, which may
involve certain expenses and risks, but the Portfolio does not expect its
investment in stand-by commitments to comprise a significant portion of its
investments. The Portfolio may commit up to 15% of its net assets to the
purchase of when-issued securities.

Taxable Investments. The Tax-Free Portfolio may invest in taxable
instruments including obligations of the U.S. Government and its agencies,
high-quality certificates of deposit and bankers' acceptances, prime commercial
paper, and repurchase agreements.

Treasury Portfolio

The Treasury Portfolio's investments may include:

o issues of the U.S. Treasury, such as bills, certificates of
indebtedness, notes and bonds;

o adjustable rate obligations; and

o repurchase agreements that are fully collateralized.

The Treasury Portfolio may commit up to 15% of its net assets to the
purchase of when-issued U.S. Treasury securities.

As an operating policy, which may be changed without shareholder approval,
the Portfolio (i) attempts to invest in securities that comply with requirements
of New Jersey law in order to be an eligible investment for boards of education
and other local governmental units in New Jersey, and (ii) does not invest in
securities maintained under the U.S. Treasury STRIPS program or in repurchase
agreements involving these types of securities.

Risk Considerations

The Portfolios' principal risks are interest rate risk and credit risk.
Because the Portfolios invest in short-term securities, a decline in interest
rates will affect the Portfolios' yields as these securities mature or are sold
and the Portfolios purchase new short-term securities with lower yields.
Generally, an increase in interest rates causes the value of a debt instrument
to decrease. The change in value for shorter-term securities is usually smaller
than for securities with longer maturities. Because the Portfolios invest in
securities with short maturities and seek to maintain a stable net asset value
of $1.00 per share, it is possible, though unlikely, that an increase in
interest rates would change the value of your investment.

Credit risk is the possibility that a security's credit rating will be
downgraded or that the issuer of the security will default (fail to make
scheduled interest and principal payments). The Portfolios invest in
highly-rated securities to minimize credit risk.

The Portfolios may invest up to 10% of their net assets in illiquid
securities, including illiquid restricted securities (with respect to each
Portfolio except the Tax-Free Portfolio). Investments in illiquid securities may
be

6
<PAGE>

subject to liquidity risk, which is the risk that, under certain circumstances,
particular investments may be difficult to sell at an advantageous price.
Illiquid restricted securities also are subject to the risk that the Portfolio
may be unable to sell the security due to legal or contractual restrictions on
resale.

The Portfolios' investments in U.S. dollar-denominated obligations (or
credit and liquidity enhancements) of foreign branches of U.S. banks, U.S.
branches of foreign banks, and commercial paper of foreign companies may be
subject to foreign risk. Foreign securities issuers are usually not subject to
the same degree of regulation as U.S. issuers. Reporting, accounting, and
auditing standards of foreign countries differ, in some cases, significantly
from U.S. standards. Foreign risk includes nationalization, expropriation or
confiscatory taxation, political changes or diplomatic developments that could
adversely affect a Portfolio's investments.

The Portfolios also are subject to management risk because they are
actively managed portfolios. Alliance will apply its investment techniques and
risk analyses in making investment decisions for the Portfolios, but there is no
guarantee that its techniques will produce the intended result.

The Tax-Free Portfolio faces municipal market risk. This is the risk that
special factors may adversely affect the value of municipal securities and have
a significant effect on the yield or value of the Portfolio's investments. These
factors include political or legislative changes, uncertainties related to the
tax status of municipal securities, or the rights of investors in these
securities. The Portfolio's investments in certain municipal securities with
principal and interest payments that are made from the revenues of a specific
project or facility, and not general tax revenues, may have increased risks.
Factors affecting the project or facility, such as local business or economic
conditions, could have a significant effect on the project's ability to make
payments of principal and interest on these securities.

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MANAGEMENT OF THE PORTFOLIOS
--------------------------------------------------------------------------------

The Portfolios' investment adviser is Alliance Capital Management L.P.,
1345 Avenue of the Americas, New York, New York 10105. Alliance is a leading
international investment adviser managing client accounts with assets as of June
30, 2000 totaling more than $388 billion (of which more than $185 billion
represented assets of investment companies). As of June 30, 2000, Alliance
managed retirement assets for many of the largest public and private employee
benefit plans (including 29 of the nation's FORTUNE 100 companies), for public
employee retirement funds in 33 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide. The 52
registered investment companies, managed by Alliance, comprising 122 separate
investment portfolios, currently have approximately 6.1 million shareholder
accounts.

Alliance provides investment advisory services and order placement
facilities for the Portfolios. For these advisory services, each Portfolio paid
Alliance, for the fiscal year ended April 30, 2000, as a percentage of average
daily net assets, .20%.

Alliance may make payments from time to time from its own resources, which
may include the management fees paid by the Portfolios, to compensate your
broker-dealer, depository institutions, or other persons for providing
distribution assistance and administrative services and to otherwise promote the
sale of Class A shares of the Portfolios, including paying for the preparation,
printing and distribution of prospectuses and sales literature or other
promotional activities. Financial intermediaries may receive different
compensation for selling the Portfolios' Class A shares and Class B and Class C
shares, which are not offered in this prospectus.

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PURCHASE AND SALE OF SHARES
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How the Portfolios Value Their Shares

Each of the Portfolios' net asset value, or NAV, which is the price at
which shares of the Portfolios are sold and redeemed, is expected to be constant
at $1.00 per share, although this price is not guaranteed. The NAV is calculated
at 12:00 noon and 4:00 p.m., Eastern time, on each Portfolio business day (i.e.,
each weekday exclusive of days the New York Stock Exchange or the banks in
Massachusetts are closed) except for the Tax-Free Portfolio, which is calculated
at 12:00 noon, Eastern time.

7
<PAGE>

To calculate NAV, the Portfolios' assets are valued and totaled,
liabilities subtracted and the balance, called net assets, is divided by the
number of shares outstanding. Each Portfolio values its securities at their
amortized cost. This method involves valuing an instrument at its cost and
thereafter applying a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the investment.

How To Buy Shares

o Initial Investment

You may purchase a Portfolio's shares directly from Alliance Fund
Services, Inc., ("AFS"), by calling (800) 237-5822 and following the procedures
below.

-- After you give AFS the following information, AFS will provide you with
an account number:

a) the name of the account;

b) the address of the account; and

c) the taxpayer identification number.

-- After you receive an account number you may purchase the Portfolio's
shares by instructing your bank to wire Federal funds to AFS exactly as follows:

ABA 0110 0002 8
State Street Bank and Trust Company
Boston, MA 02101
Alliance Institutional Reserves, Inc. -- Prime,
Government, Tax-Free or Treasury Portfolio
DDA 9903-279-9
Your account name
Your account number

-- Mail a completed Application Form to:

Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520

The minimum investment amount is $1,000,000 in the aggregate among the
Portfolios. There is no minimum for subsequent investments. The Portfolios
reserve the right to vary the minimum investment amounts.

o Application Form

-- To obtain an Application Form, please telephone AFS toll-free at (800)
237-5822. You also may obtain information about the Form, purchasing shares, or
other Fund procedures by calling this number.

-- If you decide to change instructions or any other information already
given on your Application Form, send a written notice to AFS at the address
above with your signature guaranteed. Signatures must be guaranteed by an
institution that is an "eligible guarantor" as defined in Rule 17Ad-15 of the
Securities Exchange Act of 1934. This would include such institutions as banks
and brokerage firms.

o Subsequent Investments

You may purchase additional shares in a Portfolio by calling AFS at the
number set forth above and:

-- Instructing your bank to wire Federal funds to AFS under the same
procedures as described above for initial purchases; or

-- Mailing your check or negotiable bank draft payable to Alliance
Institutional Reserves, Inc.--Prime, Government, Tax-Free or Treasury Portfolio
at the address set forth above.

If you invest by a check drawn on a member of the Federal Reserve System,
the check will be converted to Federal funds in one business day following
receipt and then invested in the Portfolio. If you invest by a check drawn on a
bank that is not a member of the Federal Reserve System, the check may take
longer to be converted and invested. All payments must be in U.S. dollars.

How To Sell Shares

You may "redeem" your shares (i.e., sell your shares) on any Portfolio
business day by contacting AFS at (800) 237-5822. A redemption must include your
account name as registered with the Portfolios and the account number. If AFS
receives your telephone redemption order by 4:00 p.m., Eastern time, for the
Prime, Government and Treasury Portfolios and prior to 12:00 Noon, Eastern time,
for the Tax-Free Portfolio, AFS will send the proceeds in Federal funds by wire
to your designated bank account that day. If you recently purchased shares by
check or electronic funds transfer, you cannot redeem your investment until AFS
is reasonably satisfied the check has cleared (which may take up to 15 days).

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<PAGE>

Other

Each Portfolio, except the Tax-Free Portfolio, has two transaction times
each Portfolio business day, 12:00 Noon and 4:00 p.m., Eastern time. The
Tax-Free Portfolio has one transaction time each Portfolio business day, 12:00
Noon, Eastern time. Investments receive the full dividend for a day if the
investor's telephone order is received by AFS by 4:00 p.m., Eastern time, for
the Prime, Government or Treasury Portfolio and Federal funds or bank wire
monies are received by State Street Bank before 4:00 p.m. on that day. For the
Tax-Free Portfolio, investments receive the full dividend for a day if the
investor's telephone order is received by AFS by 12:00 Noon, Eastern time, and
Federal funds or bank wire monies are secured by State Street Bank before 4:00
p.m. on that day.

Redemption proceeds are normally wired the same business day if a
redemption request is received by AFS prior to 4:00 p.m., Eastern time, for the
Prime, Government and Treasury Portfolios and 12:00 Noon, Eastern Time for the
Tax-Free Portfolio, but in no event later than seven days, unless redemptions
have been suspended or postponed due to the determination of an "emergency" by
the Securities and Exchange Commission or to certain other unusual conditions.
Shares do not earn dividends on the day a redemption is effected.

A transaction, service, administrative or other similar fee may be charged
by your broker-dealer, agent, financial representative or other financial
intermediary with respect to the purchase, sale or exchange of shares made
through these financial intermediaries. These financial intermediaries may also
impose requirements with respect to the purchase, sale or exchange of shares
that are different from, or in addition to, those imposed by the Portfolios.

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DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------

The Portfolios' net income is calculated and paid daily as dividends to
shareholders. The dividends are automatically invested in additional shares in
your account. These additional shares are entitled to dividends on following
days resulting in compounding growth of income. The Portfolios expect that their
distributions will primarily consist of net income, or, if any, short-term
capital gains as opposed to long-term capital gains. For Federal income tax
purposes, the Portfolios' dividend distributions of net income (or short-term
capital gains) will be taxable to you as ordinary income. Any long-term capital
gains distributions may be taxable to you as long-term capital gains. The
Portfolios' distributions also may be subject to certain state and local taxes.

Distributions of tax-exempt interest income earned by the Tax-Free
Portfolio are not subject to Federal income tax (other than the alternative
minimum tax as described above), but may be subject to state or local income
taxes. Any exempt interest dividends derived from interest on municipal
securities subject to the alternative minimum tax will be a tax preference item
for purposes of the Federal individual and corporate alternative minimum tax.

Each year shortly after December 31, the Portfolios will send you tax
information stating the amount and type of all its distributions for the year.

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GENERAL INFORMATION
--------------------------------------------------------------------------------

The Portfolios reserve the right to close an account that through
redemption is, in the aggregate among Portfolios, less than $500,000. The
Portfolios will send shareholders 60 days' written notice to increase the
account value before the Portfolios close the account.

During drastic economic or market developments, you might have difficulty
in reaching AFS by telephone, in which event you should issue written
instructions to AFS. AFS is not responsible for the authenticity of telephone
requests to purchase or sell shares. AFS will employ reasonable procedures to
verify that telephone requests are genuine and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without notice.

9
<PAGE>

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FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand a
Portfolio's financial performance for the past five years (or, if shorter, the
period of the Portfolio's operations). Certain information reflects financial
information for a single Portfolio share. The total return in the table
represents the rate that an investor would have earned (or lost) on an
investment in the Portfolio (assuming investment of all dividends and
distributions). The information has been audited by PricewaterhouseCoopers LLP,
the Portfolios' independent accountants, for the fiscal year ended April 30,
2000 and by other independent accountants for periods prior to April 30, 2000.
The report of PricewaterhouseCoopers LLP, along with the Portfolios' financial
statements, appears in the SAI, which is available upon request.

<TABLE>
<CAPTION>
PRIME PORTFOLIO
----------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net investment income (a) ................................ .0540 .0518 .0552 .0530 .0560
----------- ----------- ----------- ----------- -----------
Less: Dividends
Dividends from net investment income ..................... (.0540) (.0518) (.0552) (.0530) (.0560)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Return
Total investment return based on net asset value (b) ..... 5.54% 5.31% 5.68% 5.44% 5.76%
Ratios/Supplemental Data
Net assets, end of year (in millions) .................... $ 1,788 $ 1,671 $ 1,765 $ 867 $ 493
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ............ .20% .20% .20% .20% .20%
Expenses, before waivers and reimbursements ............ .24% .24% .24% .29% .32%
Net investment income (a) .............................. 5.39% 5.16% 5.52% 5.31% 5.54%
</TABLE>

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

See footnote summary on page 12

10
<PAGE>

<TABLE>
<CAPTION>
GOVERNMENT PORTFOLIO
----------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net investment income (a) ................................ .0527 .0505 .0543 .0519 .0552
----------- ----------- ----------- ----------- -----------
Less: Dividends
Dividends from net investment income .................. (.0527) (.0505) (.0543) (.0519) (.0552)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Return
Total investment return based on net asset value (b) ..... 5.40% 5.18% 5.58% 5.33% 5.67%
Ratios/Supplemental Data
Net assets, end of year (in millions) .................... $ 442 $ 394 $ 275 $ 327 $ 151
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ............ .20% .20% .20% .20% .20%
Expenses, before waivers and reimbursements ............ .27% .29% .28% .35% .36%
Net investment income (a) .............................. 5.30% 5.01% 5.43% 5.22% 5.50%
</TABLE>

<TABLE>
<CAPTION>
TAX-FREE PORTFOLIO
----------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net investment income (a) ................................ .0342 .0321 .0363 .0347 .0372
----------- ----------- ----------- ----------- -----------
Less: Dividends
Dividends from net investment income ..................... (.0342) (.0321) (.0363) (.0347) (.0372)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Return
Total investment return based on net asset value (b) ..... 3.47% 3.26% 3.70% 3.53% 3.79%
Ratios/Supplemental Data
Net assets, end of year (in millions) .................... $ 407 $ 256 $ 294 $ 183 $ 184
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ............ .20% .20% .20% .20% .20%
Expenses, before waivers and reimbursements ............ .28% .28% .28% .33% .48%
Net investment income (a) .............................. 3.45% 3.22% 3.61% 3.46% 3.73%
</TABLE>

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

See footnote summary on page 12.

11
<PAGE>

TREASURY PORTFOLIO
----------------------
June 29,
Year Ended 1998(c) to
April 30, April 30,
2000 1999
---------- ----------

Net asset value, beginning of period ............... $ 1.00 $ 1.00
------- -------
Income From Investment Operations
Net investment income (a) .......................... .0504 .0401
------- -------
Less: Dividends
Dividends from net investment income ............... (.0504) (.0401)
------- -------
Net asset value, end of period ..................... $ 1.00 $ 1.00
======= =======
Total Return
Total investment return based on net asset value (b) 5.15% 4.09%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $ 4 $ 4
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ...... .20% .20%(d)
Expenses, before waivers and reimbursements ...... .59% 1.42%(d)
Net investment income (a) ........................ 5.03% 4.82%(d)

(a) Net of expenses reimbursed or waived by the Adviser.

(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends at net asset value during the period, and redemption on the last
day of the period. Total investment return calculated for a period of less
than one year is not annualized.

(d) Annualized.

12
<PAGE>

For more information about the Portfolios, the following documents are available
upon request:

o Annual/Semi-Annual Reports to Shareholders

The Portfolios' annual and semi-annual reports to shareholders contain
additional information on the Portfolios' investments.

o Statement of Additional Information (SAI)

You may request a free copy of a current annual/semi-annual report or the SAI,
or make inquiries concerning the Portfolios, by contacting your broker or other
financial intermediary, or by contacting Alliance:

By mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520,
Secaucus, New Jersey 07096

By phone: For Information and Literature:
(800) 824-1916

Or you may view or obtain these documents from the Securities and Exchange
Commission:

In person: at the Securities and Exchange
Commission's Public Reference
Room in Washington, D.C.

By phone: (800) SEC-0330 (for information on the
operation of the public reference room only)

By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)

By electronic mail: [email protected]
(duplicating fee required)

On the Internet: www.sec.gov

You may also find more information about Alliance and the Portfolios on the
Internet at: www.Alliancecapital.com.

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

Table of Contents
-----------------

RISK/RETURN SUMMARY ....................................................... 2
Performance and Bar Chart Information ................................... 2
FEES AND EXPENSES OF THE PORTFOLIOS ....................................... 4
OTHER INFORMATION ABOUT THE PORTFOLIOS'
OBJECTIVES, STRATEGIES, AND RISKS ....................................... 5
Investment Objectives and Strategies .................................... 5
Prime Portfolio ......................................................... 5
Government Portfolio .................................................... 5
Tax-Free Portfolio ...................................................... 5
Treasury Portfolio ...................................................... 6
Risk Considerations ..................................................... 6
MANAGEMENT OF THE PORTFOLIOS .............................................. 7
PURCHASE AND SALE OF SHARES ............................................... 7
How The Portfolios Value Their Shares ................................... 7
How To Buy Shares ....................................................... 8
How To Sell Shares ...................................................... 8
Other ................................................................ 9
DIVIDENDS, DISTRIBUTIONS AND TAXES ........................................ 9
GENERAL INFORMATION ....................................................... 9
FINANCIAL HIGHLIGHTS ...................................................... 10

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

File No. 811-6068

<PAGE>

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

Alliance
Institutional
Reserves

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

o Prime Portfolio
o Government Portfolio
o Tax-Free Portfolio
o Treasury Portfolio

Prospectus
Class B Shares
September 1, 2000

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.

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

<PAGE>

Alliance Institutional Reserves, Inc. consists of five distinct
Portfolios. This prospectus describes the Class B shares of four of the
Portfolios--the Prime Portfolio, Government Portfolio, Tax-Free Portfolio and
Treasury Portfolio. The Portfolios' investment adviser is Alliance Capital
Management L.P., a global investment manager providing diversified services to
institutions and individuals through a broad line of investments including more
than 100 mutual funds.

--------------------------------------------------------------------------------
RISK/RETURN SUMMARY
--------------------------------------------------------------------------------

Objectives: The investment objectives of each Portfolio are--in the
following order of priority--safety of principal, excellent liquidity and
maximum current income (exempt from Federal income taxes to the extent
described below in the case of the Tax-Free Portfolio) to the extent consistent
with the first two objectives.

The Portfolios invest primarily in the following money market securities:

o Government Portfolio Obligations of the U.S. Government, its agencies or
instrumentalities and repurchase agreements.

o Tax-Free Portfolio High-quality state and municipal government
tax-exempt debt obligations.

o Treasury Portfolio Obligations of the U.S. Treasury, such as bills,
notes and bonds and repurchase agreements.

Principal Risks: The principal risks of investing in each Portfolio are:

o Interest Rate Risk This is the risk that changes in interest rates will
adversely affect the yield or value of a Portfolio's investments in debt
securities.

In addition, a principal risk of investing in the Tax-Free Portfolio is:

Another important thing for you to note:

PERFORMANCE AND BAR CHART INFORMATION

For each Portfolio, the Risk/Return Summary includes a table showing the
Portfolio's average annual total returns and a bar chart showing the Portfolio's
annual total returns. The table and the bar chart provide an indication of the
historical risk of an investment in each Portfolio by showing:

o the Portfolio's average annual total returns for one year and the life
of the Portfolio; and

o changes in the Portfolio's performance from year to year over the life
of the Portfolio.

A Portfolio's past performance does not necessarily indicate how it will
perform in the future.

You may obtain current seven-day yield information for any Portfolio by
calling (800) 237-5822 or your financial intermediary.

2
<PAGE>

Prime Portfolio

PERFORMANCE TABLE

Since
1 Year Inception*
--------------------------------------------------------------------------------
5.10% 5.14%
--------------------------------------------------------------------------------

* Inception date: 8/14/98.

[The following was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a n/a n/a n/a n/a n/a n/a n/a 5.10%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

During the period shown in the bar chart, the highest return for a quarter
was 1.36% (quarter ending December 31, 1999) and the lowest return for a quarter
was 1.18% (quarter ending June 30, 1999).

Government Portfolio

PERFORMANCE TABLE

Since
1 Year Inception**
--------------------------------------------------------------------------------
5.06% 5.07%
--------------------------------------------------------------------------------

** Inception date: 8/7/98.

[The following was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a n/a n/a n/a n/a n/a n/a n/a 5.06%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

During the period shown in the bar chart, the highest return for a quarter
was 1.32% (quarter ending December 31, 1999) and the lowest return for a quarter
was 1.17% (quarter ending March 31, 1999).

Tax-Free Portfolio

PERFORMANCE TABLE

Since
1 Year Inception***
--------------------------------------------------------------------------------
3.13% 3.15%
--------------------------------------------------------------------------------

*** Inception date: 8/17/98.

[The following was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a n/a n/a n/a n/a n/a n/a n/a 3.13%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

During the period shown in the bar chart, the highest return for a quarter
was .88% (quarter ending December 31, 1999) and the lowest return for a quarter
was .67% (quarter ending March 31, 1999).

3
<PAGE>

Treasury Portfolio

PERFORMANCE TABLE

Since
1 Year Inception****
--------------------------------------------------------------------------------
4.54% 4.54%
--------------------------------------------------------------------------------

**** Inception date: 12/31/98.

[The following was represented as a bar chart in the printed material.]

BAR CHART

n/a n/a n/a n/a n/a n/a n/a n/a n/a 4.54%
--------------------------------------------------------------------------------
90 91 92 93 94 95 96 97 98 99

During the period shown in the bar chart, the highest return for a quarter
was 1.25% (quarter ending December 31, 1999) and the lowest return for a quarter
was 1.11% (quarter ending June 30, 1999).

--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE PORTFOLIOS
--------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolios.

Shareholder Fees (fees paid directly from your investment)

None

Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio
assets)

<TABLE>
<CAPTION>
ANNUAL PORTFOLIO OPERATING EXPENSES
----------------------------------------

Prime Government Tax-Free Treasury
----- ---------- -------- --------
<S> <C> <C> <C> <C>
Management Fees................ .20% .20% .20% .20%
Distribution (12b-1) Fees...... .10% .10% .10% .10%
Other Expenses................ .04% .07% .07% .17%
---- ---- ---- ----
Total Portfolio Operating Expenses. .34% .37% .37% .47%
Expense Reimbursement*......... (.04)% (.07)% (.07)% (.17)%
---- ---- ---- ----
Net Expenses.................... .30% .30% .30% .30%
</TABLE>

-------------
* Reflects Alliance's contractual reimbursement during the Portfolios'
respective current fiscal years of a portion of each Portfolio's operating
expenses so that each Portfolio's expense ratio does not exceed .30%. This
reimbursement extends through the end of the Portfolio's current fiscal
year and may be extended by Alliance for additional one year terms.

EXAMPLES**

<TABLE>
<CAPTION>
Prime Government Tax-Free Treasury
----- ---------- -------- --------
<S> <C> <C> <C> <C>
1 Year............................$ 31 $ 31 $ 31 $ 31
3 Years...........................$105 $112 $112 $134
5 Years...........................$187 $201 $201 $246
10 Years......................... $427 $461 $461 $575
</TABLE>

-------------
** These examples assume that Alliance's agreement to bear a portion of each
Portfolio's operating expenses is not extended beyond its initial period
of one year.

4
<PAGE>

This section of the prospectus provides a more complete description of the
investment objectives and principal strategies and risks of the Portfolios.

Please note:

o There can be no assurance that any Portfolio will achieve its investment
objectives.

Investment Objectives and Strategies

Prime Portfolio

The Prime Portfolio's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;

o certificates of deposit, bankers' acceptances, and interest bearing
savings deposits that are issued or guaranteed by (i) banks or savings and loan
associations that are members of the Federal Deposit Insurance Corporation or
(ii) foreign branches of U.S. banks and U.S. branches of foreign banks that have
total assets of at least $1 billion (rated or determined by Alliance to be of
comparable quality);

o adjustable rate obligations;

o asset-backed securities;

o restricted securities (i.e., securities subject to legal or contractual
restrictions on resale); and

o repurchase agreements that are fully collateralized.

The Portfolio does not invest 25% or more of its assets in securities of
issuers whose principal business activities are in the same industry. This
limitation does not apply to investments in securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, or to bank obligations,
including certificates of deposit, bankers' acceptances and interest bearing
savings deposits, issued by U.S. banks (including their foreign branches) and
U.S. branches of foreign banks subject to the same regulation as U.S. banks.

Government Portfolio

The Government Portfolio's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;

o adjustable rate obligations; and

o repurchase agreements that are fully collateralized.

The Government Portfolio may commit up to 15% of its net assets to the
purchase of when-issued U.S. Government securities.

As an operating policy, which may be changed without shareholder approval,
the Portfolio seeks to invest in securities that are legal investments for
Federal credit unions.

Tax-Free Portfolio

The Portfolio will limit its investments so that no more than 20% of its
total income is derived from municipal securities that bear interest subject to
the Federal alternative minimum tax.

Municipal Securities. The Tax-Free Portfolio's investments in municipal
securities include municipal

5
<PAGE>

notes and short-term municipal bonds. Municipal notes are generally used to
provide for short-term capital needs and generally have maturities of 397 days
or less. Examples include tax anticipation and revenue anticipation notes, which
are generally issued in anticipation of various seasonal revenues, bond
anticipation notes, and tax-exempt commercial paper. Short-term municipal bonds
may include general obligation bonds, which are secured by the issuer's pledge
of its faith, credit, and taxing power for payment of principal and interest,
and revenue bonds, which are generally paid from the revenues of a particular
facility or a specific excise or other source.

The quality and liquidity of the Tax-Free Portfolio's investments in
municipal securities are supported by credit and liquidity enhancements, such as
letters of credit, from third-party financial institutions. The Portfolio
continuously monitors the credit quality of third parties; however, changes in
the credit quality of these financial institutions could cause the Portfolio's
investments backed by that institution to lose value and affect the Portfolio's
share price.

Treasury Portfolio

The Treasury Portfolio's investments may include:

o issues of the U.S. Treasury, such as bills, certificates of
indebtedness, notes and bonds;

o adjustable rate obligations; and

o repurchase agreements that are fully collateralized.

The Treasury Portfolio may commit up to 15% of its net assets to the
purchase of when-issued U.S. Treasury securities.

Risk Considerations

6
<PAGE>

--------------------------------------------------------------------------------
MANAGEMENT OF THE PORTFOLIOS
--------------------------------------------------------------------------------

Alliance may make payments from time to time from its own resources, which
may include the management fees paid by the Portfolios to compensate your
broker-dealer, depository institutions, or other persons for providing
distribution assistance and administrative services and to otherwise promote the
sale of Class B shares of the Portfolios, including paying for the preparation,
printing, and distribution of prospectuses and sales literature or other
promotional activities.

--------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
--------------------------------------------------------------------------------

How The Portfolios Value Their Shares

Each of the Portfolios' net asset value, or NAV, which is the price at
which shares of the Portfolios are sold and redeemed, is expected to be constant
at $1.00 per share, although this price is not guaranteed. The NAV is calculated
at 12:00 Noon and 4:00 p.m., Eastern time, on each Portfolio business day (i.e.,
each weekday exclusive of days the New York Stock Exchange or the banks in
Massachusetts are closed) except for the Tax-Free Portfolio, which is calculated
at 12:00 Noon, Eastern time.

7
<PAGE>

How To Buy Shares

o Initial Investment

You may purchase Class B shares through your financial intermediary by
instructing the intermediary to invest in one or more of the Portfolios.

The minimum investment amount is $1,000,000 in the aggregate among the
Portfolios. There is no minimum for subsequent investments. The Portfolios
reserve the right to vary the minimum amounts.

o Subsequent Investments

By Check:

Mail or deliver your check or negotiable draft pay able to your financial
intermediary, who will deposit it into the Portfolio(s). Please designate the
appropriate Portfolio and indicate your brokerage account number, if applicable,
on the check or draft.

By Sweep:

Your financial intermediary may offer an automatic "sweep" for the
Portfolio in the operation of brokerage cash accounts for its customers. Contact
your financial intermediary to determine if a sweep is available and what the
sweep parameters are.

How To Sell Shares

You may "redeem" your shares (i.e., sell your shares) on any Portfolio
business day by contacting your financial intermediary. If your redemption
request is received by Alliance Fund Services, Inc. ("AFS") prior to 4:00 p.m.,
Eastern time, for the Prime, Government and Treasury Portfolios and prior to
12:00 Noon, Eastern time, for the Tax-Free Portfolio, your redemption proceeds
normally will be wired the same business day. If you recently purchased shares
by check or electronic funds transfer, you cannot redeem your investment until
the Portfolio is reasonably satisfied the check has cleared (which may take up
to 15 days).

If your financial intermediary offers an automatic sweep arrangement, you
also may redeem your shares by sweep. The sweep will automatically transfer from
your Portfolio account sufficient amounts to cover security purchases in your
brokerage account.

Other

8
<PAGE>

aries may also impose requirements with respect to the purchase, sale or
exchange of shares that are different from, or in addition to, those imposed by
the Portfolios.

--------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------

Each year shortly after December 31, the Portfolios will send you tax
information stating the amount and type of all its distributions for the year.

--------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
--------------------------------------------------------------------------------

The Fund has adopted a plan under SEC Rule 12b-1 that allows the
Portfolios to pay asset-based sales charges or distribution and service fees in
connection with the distribution of each Portfolio's Class B shares. The amount
of these fees for the Portfolios' Class B shares is .10% as a percentage of
aggregate average daily net assets. Because these fees are paid out of the
Portfolios' assets on an on-going basis, over time these fees will increase the
cost of your investment and may cost you more than paying other types of sales
fees. Financial intermediaries may receive different compensation for selling
the Portfolios' Class B shares and Class A and Class C shares, which are not
offered in this prospectus.

--------------------------------------------------------------------------------
GENERAL INFORMATION
--------------------------------------------------------------------------------

9
<PAGE>

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand a
Portfolio's financial performance for the period of its operations. Certain
information reflects financial information for a single Portfolio share. The
total return in the table represents the rate that an investor would have earned
(or lost) on an investment in the Portfolio (assuming investment of all
dividends and distributions). The information has been audited by
PricewaterhouseCoopers LLP, the Port folios' independent accountants, for the
fiscal year ended April 30, 2000 and by other independent accountants for
periods prior to April 30, 2000. The report of PricewaterhouseCoopers LLP, along
with the Portfolios' financial statements, appears in the SAI, which is
available upon request.

<TABLE>
<CAPTION>
PRIME PORTFOLIO
---------------------------
Year August 14,
Ended 1998(c) to
April 30, April 30,
2000 1999
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00
----------- -----------
Income From Investment Operations
Net investment income (a) .......................... .0530 .0358
----------- -----------
Less: Dividends
Dividends from net investment income ............... (.0530) (.0358)
----------- -----------
Net asset value, end of period ..................... $ 1.00 $ 1.00
=========== ===========
Total Return
Total investment return based on net asset value (b) 5.44% 3.65%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $ 1,871 $ 536
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ..... .30% .30%(d)
Expenses, before waivers and reimbursements ..... .34% .36%(d)
Net investment income (a) ....................... 5.44% 4.82%(d)
</TABLE>

<TABLE>
<CAPTION>
GOVERNMENT
PORTFOLIO
---------------------------
Year August 7,
Ended 1998(c) to
April 30, April 30,
2000 1999
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00
----------- -----------
Income From Investment Operations
Net investment income (a) .......................... .0516 .0361
----------- -----------
Less: Dividends
Dividends from net investment income ............... (.0516) (.0361)
----------- -----------
Net asset value, end of period .................. $ 1.00 $ 1.00
=========== ===========
Total Return
Total investment return based on net asset value (b) 5.29% 3.68%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $ 198 $ 136
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ..... .30% .30%(d)
Expenses, before waivers and reimbursements ..... .37% .41%(d)
Net investment income (a) ....................... 5.19% 4.73%(d)
</TABLE>

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

See footnote summary on page 11.

10
<PAGE>

<TABLE>
<CAPTION>
TAX-FREE PORTFOLIO
-----------------------
Year August 17,
Ended 1998(c) to
April 30, April 30,
2000 1999
--------- ---------
<S> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00
--------- ---------
Income From Investment Operations
Net investment income (a) .......................... .0333 .0210
--------- ---------
Less: Dividends
Dividends from net investment income ............... (.0333) (.0210)
--------- ---------
Net asset value, end of period ..................... $ 1.00 $ 1.00
========= =========
Total Return
Total investment return based on net asset value (b) 3.37% 2.13%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $ 375 $ 193
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ..... .30% .30%(d)
Expenses, before waivers and reimbursements ..... .37% .42%(d)
Net investment income (a) ....................... 3.37% 2.88%(d)
</TABLE>

<TABLE>
<CAPTION>
TREASURY PORTFOLIO
-----------------------
Year December 31,
Ended 1998(c) to
April 30, April 30,
2000 1999
--------- ---------
<S> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00
--------- ---------
Income From Investment Operations
Net investment income (a) .......................... .0494 .0143
--------- ---------
Less: Dividends
Dividends from net investment income ............... (.0494) (.0143)
--------- ---------
Net asset value, end of period .................. $ 1.00 $ 1.00
========= =========
Total Return
Total investment return based on net asset value (b) 5.05% 1.44%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $ 85 $ 15
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ..... .30% .30%(d)
Expenses, before waivers and reimbursements ..... .47% 1.08%(d)
Net investment income (a) ....................... 5.04% 4.42%(d)
</TABLE>

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

(a) Net of expenses reimbursed or waived by the Adviser.

(d) Annualized.

11
<PAGE>

(This page left intentionally blank.)

12
<PAGE>

For more information about the Portfolios, the following documents are available
upon request:

o Annual/Semi-Annual Reports to Shareholders

The Portfolios' annual and semi-annual reports to shareholders contain
additional information on the Portfolios' investments.

o Statement of Additional Information (SAI)

By mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, NJ 07096

By phone: For Information and Literature:
(800) 824-1916

Or you may view or obtain these documents from the Securities and Exchange
Commission:

In person: at the Securities and Exchange
Commission's Public Reference
Room in Washington, D.C.
By phone: (800) SEC-0330 (for information on the
operation of the public reference room only)
By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
By electronic mail: [email protected]
(duplicating fee required)
On the Internet: www.sec.gov

You also may find more information about Alliance and the Portfolios on the
Internet at: www.Alliancecapital.com.

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

Table of Contents
-----------------

RISK/RETURN SUMMARY ....................................................... 2
Performance and Bar Chart Information .................................. 2
FEES AND EXPENSES OF THE PORTFOLIOS ....................................... 4
OTHER INFORMATION ABOUT THE PORTFOLIOS'
OBJECTIVES, STRATEGIES, AND RISKS ...................................... 5
Investment Objectives and Strategies ................................... 5
Prime Portfolio ........................................................ 5
Government Portfolio ................................................... 5
Tax-Free Portfolio .................................................. 5
Treasury Portfolio ..................................................... 6
Risk Considerations .................................................... 6
MANAGEMENT OF THE PORTFOLIOS .............................................. 7
PURCHASE AND SALE OF SHARES ............................................... 7
How The Portfolios Value Their Shares .................................. 7
How To Buy Shares ...................................................... 8
How To Sell Shares ..................................................... 8
Other .................................................................. 8
DIVIDENDS, DISTRIBUTIONS AND TAXES ........................................ 9
DISTRIBUTION ARRANGEMENTS ................................................. 9
GENERAL INFORMATION ....................................................... 9
FINANCIAL HIGHLIGHTS ...................................................... 10

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File No. 811-6068

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Alliance
Institutional
Reserves

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o Prime Portfolio
o Government Portfolio
o Tax-Free Portfolio
o Treasury Portfolio

Prospectus
Class C Shares
September 1, 2000

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
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<PAGE>

Alliance Institutional Reserves, Inc. consists of five distinct
Portfolios. This prospectus describes the Class C shares of four of the
Portfolios--the Prime Portfolio, Government Portfolio, Tax-Free Portfolio and
Treasury Portfolio. The Portfolios' investment adviser is Alliance Capital
Management L.P., a global investment manager providing diversified services to
institutions and individuals through a broad line of investments including more
than 100 mutual funds.