FEDERATED ADJUSTABLE RATE U.S. GOVERNMENT FUND, INC.
SUPPLEMENT TO PROSPECTUS DATED APRIL 30, 1997
On page 15 of the prospectus, please delete the fourth and fifth
paragraphs under the section entitled "Adviser's Background" and
replace them with the following:
"Todd A. Abraham has been the Fund's portfolio manager since October
1995. Mr. Abraham has been a Vice President of the Fund's
investment adviser since July 1997. Mr. Abraham joined Federated
Investors in 1993 as an Investment Analyst and served as
Assistant Vice President from 1995 to 1997. Mr. Abraham served as
a Portfolio Analyst at Ryland Mortgage Co. from 1992 to 1993. Mr.
Abraham is a Chartered Financial Analyst and received his M.B.A.
in finance from Loyola College.
Robert E. Cauley has been the Fund's portfolio manager since October
1997. Mr. Cauley joined Federated Investors in 1996 as an
Assistant Vice President of the Fund's adviser. Mr. Cauley served
as an Associate in the Asset-Backed Securities Group at Lehman
Brothers Holding, Inc. from 1994 to 1996. From 1992 to 1994, Mr.
Cauley served as a Senior Associate/Corporate Finance at Barclays
Bank, PLC. Mr. Cauley earned his M.S.I.A., concentrating in
Finance and Economics, from Carnegie Mellon University."
October 30, 1997
FEDERATED INVESTORS
Federated Securities Corp., Distributor
Cusip 314072109
G00754-05 (10/97)
[GRAPHIC OMITTED]
