BLACKROCK MUNICIPAL TARGET TERM TRUST INC, N-30D, 1997-03-03

BLACKROCK MUNICIPAL TARGET TERM TRUST INC
N-30D, 1997-03-03

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- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERMTRUSTINC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

January 31, 1997

Dear Trust Shareholder:

The domestic fixed income markets over the past twelve months were once again
greatly influenced by interest rate volatility. Significant swings in the pace
of U.S. economic growth influenced the bond market's performance, as every
release of economic data led to market participant speculation regarding the
direction of Federal Reserve monetary policy.

Despite strong growth and rising wage pressures, the Fed's decision not to
raise interest rates at their two most recent policy meetings has markedly
increased the stakes in the bond market. The rationale behind the Fed's decision
not to raise interest rates appears to focus on the benign inflation data
released during the third quarter. Should economic growth slow and inflation
remain benign, the Fed will be proven correct in their inaction and the market
would be expected to rally significantly. On the other hand, signs of a stronger
economy could result in weaker bond prices as the likelihood of a Fed tightening
would increase.

BlackRock maintains a positive view on the bond market. On balance, the
outlook for moderate inflation remains intact, suggesting that further declines
in interest rates are likely. In addition to this favorable fundamental
backdrop, foreign demand for U.S. bonds has increased due to the renewed
attractiveness of the U.S. bond market on a global basis.

This annual report is designed to help you stay informed about your
investment and represents our ongoing commitment to improving our communication
with you. We hope you find this report useful now and in the future. We
appreciate your confidence and look forward to helping you achieve your
long-term investment goals.

Sincerely,

/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
------------------------- ------------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President

1
<PAGE>

January 31, 1997

Dear Shareholder:

We are pleased to present the annual report for The BlackRock Municipal
Target Term Trust Inc. ("the Trust") for the year ended December 31, 1996. We
would like to take this opportunity to review the Trust's stock price and net
asset value (NAV) performance, summarize developments in the fixed income
markets and discuss recent portfolio management activity.

The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BMN". The
Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $10 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2006, while
providing high current income exempt from regular federal income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities throughout the United States.

The table below summarizes the changes in the Trust's stock price and net
asset value over the past year:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
12/31/96 12/31/95 CHANGE HIGH LOW
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK PRICE $10.25 $10.125 +1.24% $10.50 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $10.96 $11.14 (1.62%) $11.30 $10.61
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE FIXED INCOME MARKETS

While 1996 featured several major shifts in sentiment and some
dramatically sharp market moves, the net year-over-year yield changes turned out
to be modest. Yields rose sharply across the Treasury yield curve throughout the
first half of the year in response to data indicating accelerating economic
growth, including a sharp rise in commodity prices, which rekindled inflationary
concerns. The possibility of a stronger economy dampened investor expectations
of continued Federal Reserve easing of monetary policy and initiated whispers of
a potentially more restrictive Fed policy.

Largely softer economic data and continued moderation in the broad
inflation measures during the third and fourth quarters allowed the Fed to leave
short term interest rates unchanged at their most recent policy meetings.
Additionally, a stronger dollar, large foreign buying of U.S. Treasuries and
balanced budget hopes following the November elections also supported the
market. However, Alan Greenspan's mention of "irrational exuberance in the
financial markets" on December 4, 1996 rattled the Treasury market, leading to a
monthlong rise in rates. A resilient housing market and strong consumer
confidence also contributed to the market decline in late December.

Municipal bond performance as measured by the Lehman Municipal Bond Index
outpaced that of taxable bonds (represented by the Lehman Aggregate Index),
returning 4.43% versus 3.63% for taxables. This strong performance is the result
of the relative scarcity of new municipal bond issuance combined with increased
retail demand due to the end of "flat tax" reform concerns. In particular, the
third quarter of 1996 witnessed approximately $60 billion in cash (in the form
of calls, maturities and interest payments) returned to investors and recycled
back into the municipal bond market. As the fourth quarter progressed, however,
retail demand moderated in response to a strengthening stock market and
declining

2
<PAGE>

interest rate levels. The municipal market finished 1996 on a strong note,
outperforming taxables during the latter half of November and into December.

Looking forward, we believe municipal bonds may perform well in early
1997. The "January effect", which refers to the significant amount of cash
returned to individual municipal bond investors in the form of bond calls,
maturities and coupon payments in January, could increase demand for municipals
as this cash is reinvested in the municipal market.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.

Additionally, the Trust employs leverage to enhance its income by
borrowing at short term municipal rates and investing the proceeds in longer
maturity issues which have higher yields. The degree to which the Trust can
benefit from its use of leverage may affect its ability to pay high monthly
income. The Federal Reserve's decision not to increase short interest rates at
their August and September policy meetings has benefited the Trust, as short
term municipal rates (which determine the Trust's borrowing costs) fell.

The following chart compares the Trust's current and December 31, 1995
asset composition:

THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR DECEMBER 31, 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------
City, County and State 22% 21%
- --------------------------------------------------------------------------------
Hospital 15% 15%
- --------------------------------------------------------------------------------
Transportation 14% 14%
- --------------------------------------------------------------------------------
Tax Revenue 13% 14%
- --------------------------------------------------------------------------------
Water & Sewer 10% 10%
- --------------------------------------------------------------------------------
Utility/Power 8% 9%
- --------------------------------------------------------------------------------
Lease Revenue 7% 7%
- --------------------------------------------------------------------------------
Education 4% 4%
- --------------------------------------------------------------------------------
Building 2% 2%
- --------------------------------------------------------------------------------
Pollution Control/Resource Recovery 2% --
- --------------------------------------------------------------------------------
Other 3% 4%
- --------------------------------------------------------------------------------

<PAGE>

We appreciate your continued confidence and look forward to managing The
BlackRock Municipal Target Term Trust Inc. in the coming years to realize its
investment objectives. Please feel free to contact the mutual fund specialists
at BlackRock's marketing center at (800) 227-7BFM (7236) if you have any
questions that are not answered in this report.
Additionally, you can reach us via e-mail at [email protected].

Sincerely,

/s/ Robert S. Kapito /s/ Kevin Klingert
- ----------------------------------- ---------------------------------------
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

- -----------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
- -----------------------------------------------------------------------------
Symbol on New York Stock Exchange: BMN
- --------------------------------------------------------------------------------
Initial Offering Date: September 27, 1991
- --------------------------------------------------------------------------------
Closing Stock Price as of 12/31/96: $10.25
- --------------------------------------------------------------------------------
Net Asset Value as of 12/31/96: $10.96
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 12/31/96 ($10.25)1: 6.00%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share:2 $0.05125
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share:2 $0.6150
- --------------------------------------------------------------------------------

1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2Distribution is not constant and is subject to change.

4
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS** VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 143%
ALABAMA--1.0%
Hoover Brd. of Ed. Spl. Tax. Wts., G.O., AMBAC,
<S> <C> <C> <C> <C>
AAA $ 1,700 6.50%, 2/01/01+ ................................................... No Opt. Call $ 1,853,442
AAA 1,815 6.60%, 2/01/01+ ................................................... No Opt. Call 1,985,501
AAA 1,025 6.625%, 2/01/01+ .................................................. No Opt. Call 1,122,232
-----------
4,961,175
-----------
ALASKA--3.9%
AAA 7,500 Anchorage Elec. Util. Rev., 7.125%, 6/01/06, MBIA ................... 6/99 at 102 8,079,750
AAA 4,845 Fairbanks Mun. Util. Auth. Rev., Ser. A, 7.10%, 1/01/05, AMBAC ...... 1/99 at 102 5,138,026
AAA 9,000 No. Slope Boro., Ser. B, Zero Coupon, 6/30/04, CGIC ................. No Opt. Call 6,153,750
-----------
19,371,526
-----------
ARIZONA--1.1%
AAA 5,010 Tucson Bus. Dev. Fin. Corp. Lease Rev., 6.25%, 7/01/06, FGIC ........ 7/02 at 102 5,387,353
-----------
CALIFORNIA--5.0%
AAA 6,000 California St., G.O., 6.30%, 9/01/06, AMBAC ......................... No Opt. Call 6,675,900
AAA 1,910 California St., Pub. Wrks. Rev., Ser. A, 6.20%, 12/01/06, AMBAC ..... 12/02 at 102 2,066,238
AAA 4,000 Glendale Hosp. Rev., Adventist Hlth. Ctr., Ser. A, 6.50%,
3/01/07, MBIA .................................................... 3/01 at 102 4,304,200
Los Angeles Wst. Wtr. Sys. Rev., MBIA,
AAA 5,570 5.625%, 6/01/07 ................................................. 6/03 at 102 5,795,306
AAA 3,320 Ser. D, 6.60%, 12/01/06 ......................................... 12/00 at 102 3,577,964
AAA 2,500 San Diego Cnty. Regl. Trans. Commn., Tax Rev., Ser. A, 6.00%,
4/01/05, AMBAC .................................................. No Opt. Call 2,705,825
-----------
25,125,433
-----------
COLORADO--2.0%
Denver City & Cnty. Wtr. Brd. Rev., C.O.P., FGIC,
AAA 3,410 6.50%, 11/15/05 ................................................. 11/01 at 101 3,665,750
AAA 1,875 6.60%, 11/15/06 ................................................. 11/01 at 101 2,021,963
AAA 3,865 6.625%, 11/15/07 ................................................ 11/01 at 101 4,154,720
-----------
9,842,433
-----------
DISTRICT OF COLUMBIA--2.0%
AAA 8,250 District of Columbia, G.O., Ser. B, 5.90%, 6/01/06, MBIA ............ 6/04 at 102 8,723,302
-----------
FLORIDA--13.1%
Florida St. Div. Bd. Fin. Dept. Gen. Svcs. Rev.
(Dept. Nat. Res. & Pres.),
AAA 7,000 6.45%, 7/01/07, MBIA ............................................ 7/01 at 101 7,541,310
AAA 6,975 6.75%, 7/01/07, AMBAC ........................................... 7/01 at 102 7,613,352
AAA 2,190 Florida St. Sunshine Skyway Rev., 6.60%, 7/01/07, MBIA .............. 7/01 at 101 2,372,515
Greater Orlando Aviation Auth., Arpt. Facs. Rev., Ser. B, FGIC,
AAA 4,760 6.55%, 10/01/06 ................................................. 10/02 at 102 5,256,325
AAA 5,070 6.55%, 10/01/07 ................................................. 10/02 at 102 5,598,649
AAA 3,155 Gulf Breeze, Local Gov't., Ln. Pkg. Rev., 7.70%, 12/01/15, FGIC ..... 12/99 at 102 3,415,035
AAA 2,650 Jacksonville Hlth. Facs. Auth. Rev., Mem. Med. Ctr., Ser. A,
6.625%, 11/01/01+, MBIA ......................................... No Opt. Call 2,917,835
AAA 7,500 Jacksonville Hosp. Rev., Univ. Med. Ctr. Inc. Proj.,
6.50%, 2/01/07, CONNIE LEE 2/02 at 102 8,088,900
AAA 4,000 Kissimmee Util. Auth. Rev., Elec. Sply., 6.70%, 10/01/07, MBIA ...... 10/97 at 102 4,148,680
AAA 2,000 No. Broward Hosp. Rev., 6.50%, 1/01/07, MBIA ........................ 1/02 at 102 2,174,800
AAA 10,645 Orange Cnty., Tourist Dev. Tax Rev., Ser. A, 6.375%, 10/01/06, AMBAC 10/02 at 102 11,662,236
AAA 2,570 Tampa Auth. Rev., St. Joseph Hlth. Ctr., 6.70%, 12/01/07, MBIA ...... 12/01 at 102 2,814,022
AAA 1,600 Tampa Util. Tax & Spec. Rev., 6.80%, 10/01/06, AMBAC ................ 10/01 at 102 1,769,200
-----------
65,372,859
-----------
</TABLE>

See Notes to Financial Statements.

5
<PAGE>

INDIANA--3.0%
AAA 9,000 Indiana Univ. Rev., Student Fee, Zero Coupon, 8/01/06, AMBAC .... No Opt. Call 5,439,240
AAA 2,270 Noblesville West Indpt. Sch. Bldg. Corp., G.O., 7.00%,
7/01/07, MBIA ............................................... 1/01 at 102 2,492,869
AAA 5,000 Warsaw High Sch. Bldg. Corp., G.O., 6.90%, 7/01/05, MBIA ........ 7/00 at 102 5,382,950
-----------
13,315,059
-----------
KENTUCKY--3.1%
Danville Multi-City Lease Rev., Swr. & Drain Sys., MBIA,
AAA 2,015 6.60%, 3/01/02+ ............................................ No Opt. Call 2,229,739
AAA 2,160 6.65%, 3/01/02+ ............................................ No Opt. Call 2,395,094
AAA 3,750 Kentucky Dev. Fin. Auth. Rev., Sisters of Charity,
6.60%, 11/01/06, MBIA ...................................... 11/01 at 102 4,071,712
AAA 6,410 Kentucky St. Ppty. & Bldgs. Auth. Rev., Proj. 53, 6.625%,
10/01/07, MBIA ............................................. 10/01 at 102 6,996,964
-----------
15,693,509
-----------
LOUISIANA--7.0%
Jefferson Sales Tax Dist. Rev., FGIC,
AAA 21,000 Ser. A, 6.75%, 12/01/06 .................................... 12/02 at 100 23,067,030
AAA 4,000 Ser. B, 6.75%, 12/01/06 .................................... 12/02 at 100 4,393,720
AAA 3,500 Louisiana St., G.O., Ser. A, 6.50%, 5/01/07, AMBAC .............. 5/02 at 102 3,792,460
AAA 5,250 New Orleans, G.O. Ref., Zero Coupon, 9/01/06, AMBAC ............. No Opt. Call 3,197,985
-----------
34,451,195
-----------

MASSACHUSETTS--5.2%
AAA 3,670 Mansfield, G.O., 6.65%, 1/15/07, AMBAC .......................... 1/02 at 102 4,013,365
AAA 20,015 Massachusetts Bay Trans. Auth. Rev., Gen. Tran. Sys.,
Ser. A, MBIA, 6.625%, 3/01/02+ ............................. No Opt. Call 22,021,103
-----------
26,034,468
-----------
</TABLE>

See Notes to Financial Statements.

6
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS** VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHIGAN--9.4%
Detroit Swr. Disp. Rev., FGIC,
AAA $ 1,655 6.60%, 7/01/01+ .............................................. No Opt. Call $ 1,828,974
AAA 1,765 6.65%, 7/01/01+ .............................................. No Opt. Call 1,954,102
AAA 1,880 6.70%, 7/01/01+ .............................................. No Opt. Call 2,081,141
AAA 3,750 Grand Rapids Wtr. Sply. Rev., 6.625%, 1/01/08, FGIC .............. 1/01 at 102 4,033,538
Michigan Mun. Bond Auth.,
AAA 5,000 G.O., Ser. D, Zero Coupon, 5/15/06, MBIA ..................... No Opt. Call 3,077,900
AAA 1,840 Local Gov't. Loan Prog., 6.35%, 11/01/06, AMBAC ............. 11/04 at 102 2,044,498
Michigan St. Bldg. Auth. Rev.,
AAA 3,850 Ser. II, 6.75%, 10/01/07, AMBAC .............................. 10/01 at 102 4,195,268
AAA 11,590 Ser. I, 6.75%, 10/01/07, MBIA ................................ 10/01 at 102 12,629,391
AAA 11,940 Michigan St. Hosp. Fin. Auth. Rev., Sparrow
Oblig. Grp., 6.60%, 11/15/07, MBIA ........................... 11/01 at 102 12,975,556
AAA 2,130 Wayne Cnty., Bldg. Capital Imprvt. Ser. A, 6.50%, 6/01/06, MBIA .. No Opt. Call 2,373,757
-----------
47,194,125
-----------
NEVADA--5.3%
AAA 6,210 Clark Cnty. Flood Ctrl., G.O., 6.40%, 11/01/06, AMBAC ............ 11/01 at 101 6,666,311
Clark Cnty. Sch. Dist., G.O., Ser. A, MBIA,
AAA 11,000 6.70%, 3/01/06 ............................................... 3/01 at 101 11,900,790
AAA 1,500 6.75%, 3/01/07 ............................................... 3/01 at 101 1,622,685
AAA 2,835 Nye Cnty. Sch. Dist., G.O., 7.25%, 5/01/99+, BIG ................. No Opt. Call 3,075,437
AAA 3,250 Reno Hosp. Auth. Rev., St. Mary Regl. Med. Ctr., 6.70%, 7/01/06,
MBIA ........................................................ 7/01 at 102 3,543,637
-----------
26,808,860
-----------
NEW HAMPSHIRE--0.5%
AAA 2,310 New Hampshire High. Ed. Auth. Rev., Elliot Hosp. of Manchester,
6.70%, 10/01/06, AMBAC ........................................ 10/02 at 102 2,523,629
-----------
NEW JERSEY--16.1%
AAA 10,500 Elizabeth, G.O., 6.60%, 8/01/06, MBIA ............................ 8/01 at 102 11,459,490
Howell Twp., Ref. G.O., FGIC,
AAA 7,715 6.70%, 1/01/06 ................................................ 1/02 at 102 8,536,802
AAA 2,925 6.75%, 1/01/07 ................................................ 1/02 at 102 3,229,229
New Jersey St. Hlth. Care Facs. Fin. Auth. Rev.,
Hackensack Med. Ctr., FGIC,
AAA 12,755 6.65%, 7/01/06 ................................................ 7/01 at 102 13,909,327
AAA 3,735 6.70%, 7/01/07 ................................................ 7/01 at 102 4,056,696
AAA 1,765 New Jersey St. Hwy. Auth. Rev., Garden St. Pkwy.,
6.15%, 1/01/07, AMBAC ......................................... 1/02 at 102 1,886,467
AAA 30,000 New Jersey St. Tpk. Auth. Rev., Ser. C, 6.40%, 1/01/07, AMBAC .... 1/01 at 101.5 32,049,600
No. Jersey Dist. Wtr. Sply. Cmnty. Rev., MBIA,
AAA 2,525 Wanaque No. Proj., Ser. B, 6.50%, 11/15/06 ....................... 11/01 at 102 2,747,251
AAA 1,065 Wanaque So. Proj., 6.50%, 7/01/06 ................................ 7/01 at 102 1,170,488
AAA 1,250 Warren Cnty. Poll. Ctrl. Fin. Auth. Rev., 6.55%, 12/01/06, MBIA .. 12/02 at 102 1,380,388
-----------
80,425,738
-----------
NEW MEXICO--0.8%
AAA 3,535 Gallup Poll. Ctrl. Rev., 6.50%, 8/15/07, MBIA ..................... 8/02 at 102 3,840,459
-----------
NEW YORK--12.7%
Mun. Asst. Corp. Rev.,
AAA 3,500 Ser. 61, 6.875%, 7/01/07, FGIC ................................ 7/97 at 102 3,621,240
AAA 6,500 Ser. 61, 6.875%, 7/01/07, AMBAC ............................... 7/97 at 102 6,725,160
AAA 3,500 Ser. 62, 6.90%, 7/01/07, AMBAC ................................ 7/97 at 102 3,621,660
</TABLE>

See Notes to Financial Statements.

6
<PAGE>

NORTH CAROLINA--1.8%
AAA 6,000 North Carolina Eastern Mun. Pwr. Agcy. Sys. Rev.,
Ser. B, 6.00%, 1/01/06, CAPMAC .......................... No Opt. Call 6,395,640
-----------
NORTH DAKOTA--0.4%
AAA 2,035 Grand Forks Hlth. Care Facs. Rev., United Hosp. Oblig. Grp.,
6.50%, 12/01/06, MBIA ................................... 12/01 at 102 2,198,329
-----------
PENNSYLVANIA--10.3%
AAA 6,200 Beaver Cnty. Hosp. Auth., 6.625%, 7/01/06, AMBAC ........... 7/02 at 102 6,802,578
AAA 1,500 Coatesville Sch. Dist., G.O., 6.60%, 3/01/01+, AMBAC ....... No Opt. Call 1,618,980
AAA 10,000 Harrisburg Auth. Lease Rev., 6.625%, 6/01/01+, CGIC ........ No Opt. Call 10,867,500
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/07, FGIC ...... 11/01 at 101.5 8,022,011
AAA 1,445 Pennsylvania St. Higher Ed. Rev., 6.75%, 7/01/01+, MBIA .... No Opt. Call 1,602,520
AAA 4,500 Pennsylvania St. Tpk. Auth. Rev., Ser. O, 5.80%,
12/01/07, FGIC .......................................... 12/02 at 102 4,702,860
Philadelphia Mun. Auth., Justice Lease Rev.,
AAA 1,550 Ser. A, 7.00%, 11/15/04, MBIA ........................... 11/01 at 102 1,732,389
AAA 2,370 Ser. B, 7.10%, 11/15/01+, FGIC .......................... No Opt. Call 2,674,213
Pittsburgh & Allegheny Cntys. Rev., AMBAC,
AAA 1,015 Ser. A, 6.50%, 7/15/06 .................................. 7/01 at 100 1,083,573
AAA 900 Ser. B, 6.50%, 7/15/06 .................................. 7/01 at 100 960,804
AAA 2,500 Schuylkill Cnty. Redev. Auth. Common Lease Rev.,
Ser. A, 7.00%, 6/01/07, FGIC ............................ 6/02 at 101 2,769,025
AAA 7,800 Westmoreland Cnty., G.O., 6.70%, 8/01/01+, AMBAC ........... No Opt. Call 8,501,298
-----------
51,337,751
-----------
RHODE ISLAND--2.4%
AAA 11,220 Conv. Ctr. Auth. Rev., Ser. A, 6.60%, 5/15/01+, MBIA ...... No Opt. Call 12,327,077
-----------
SOUTH CAROLINA--2.1%
AAA 4,390 Piedmont Mun. Pwr. Agy. Elec. Rev., 6.85%, 1/01/07, FGIC .. 1/01 at 102 4,760,604
AAA 5,100 Rock Hill Util. Sys. Rev., 6.50%, 1/01/07, FGIC ........... 1/01 at 102 5,464,752
-----------
10,225,356
-----------
TENNESSEE--0.5%
AAA 2,350 Met. Nashville, Arpt. Rev., Ser. C, 6.625%, 7/01/07, FGIC . 7/01 at 102 2,522,702
-----------

TEXAS--15.1%
AAA 2,000 Austin Util. Sys. Rev., 6.875%, 5/15/07, AMBAC ............ 5/01 at 102 2,218,880
AAA 8,500 Cypress-Fairbanks Indpt. Sch. Dist., G.O.,
Zero Coupon, 8/01/06, AMBAC ............................ No Opt. Call 5,209,565
AAA 5,800 El Paso Cnty. Tax Ref., G.O., Ser. B, 6.40%,
2/15/07, MBIA .......................................... 2/02 at 100 6,157,918
AAA 3,375 Ft. Bend Cnty., Tax. Perm. Imprvt., G.O., 6.60%, 9/01/02+,
FGIC .................................................. No Opt. Call 3,707,370
Harris Cnty. Rev., Toll Rd. Sr. Lien, Ser. A, FGIC,
AAA 13,555 6.50%, 8/15/02+ ...................................... No Opt. Call 15,024,633
AAA 1,955 6.50%, 8/15/06 ....................................... 8/02 at 102 2,135,603
AAA 590 6.50%, 8/15/07 ....................................... 8/02 at 102 641,460
AAA 15,000 Houston Wtr. & Swr. Sys. Rev., Ser. B, 6.75%, 12/01/08, FGIC 12/01 at 102 16,517,100
AAA 1,900 No. Central Texas Hlth. Fac. Dev. Corp.
Rev., Children's Med. Ctr. of Dallas,
6.375%, 10/01/06, MBIA .............................. 10/01 at 102 2,033,969
AAA 1,550 No. Texas Wtr. Dist., 6.40%, 6/01/07, MBIA ................ 6/03 at 100 1,659,476
AAA 3,000 Round Rock Indpt. Sch. Dist., G.O., 6.75%, 8/15/01+, MBIA . No Opt. Call 3,277,920
</TABLE>

See Notes to Financial Statements.

8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS** VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA $15,000 Texas Mun. Pwr. Agy. Rev., Ref.,
Zero Coupon, 9/01/06, AMBAC .............................. No Opt. Call $ 9,163,050
AAA 3,745 Texas St. Bldg. Fin. Auth. Rev., 7.00%, 2/01/01+, MBIA ...... No Opt. Call 4,089,428
AAA 3,395 Tyler Cnty. Hlth. Facs. Dev. Corp. Rev., Mother
Francis Hosp., 6.50%, 7/01/06, FGIC ...................... 7/02 at 102 3,685,917
------------
75,522,289
-----------
WASHINGTON--4.1%
AAA 1,250 Snohomish Cnty. Pub. Util. Dist., Elec. Rev.,
6.55%, 1/01/07, FGIC ..................................... 1/02 at 102 1,399,275
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 3,835 6.70%, 12/01/06 .......................................... 12/01 at 100 4,129,720
AAA 4,145 6.75%, 12/01/07 .......................................... 12/01 at 100 4,453,761
Washington St. Pub. Pwr. Sply. Sys. Rev., Nuclear Proj.
#2, Ser. A,
AAA 12,875 Zero Coupon, 7/01/06, MBIA ............................... No Opt. Call 7,750,493
AAA 2,265 6.50%, 7/01/05, FGIC ..................................... 7/01 at 102 2,437,253
-----------
20,170,502
-----------
WISCONSIN--0.6%
AAA 2,850 Wisconsin Hlth. & Ed. Fac. Auth., Columbia Hosp.
Rev., 6.50%, 11/15/06, MBIA .............................. 11/01 at 102 3,072,129
-----------
TOTAL LONG-TERM INVESTMENTS--143% (cost $653,745,682) ....... 711,700,885
-----------
SHORT-TERM INVESTMENTS--0.1%
MISSISSIPPI--0.0%
AAA 50 Jackson Cnty. Pollution Control, FRDD, 5.00%, 1/02/97 ....... N/A 50,000
-----------
NEW YORK--0.1%
AAA 300 New York City, Series C, G.O., FRDD, 5.00%, 1/02/97 ......... N/A 300,000
-----------
TOTAL SHORT-TERM INVESTMENTS**--0.1% (cost $350,000) ........ 350,000
-----------
TOTAL INVESTMENTS--143.1% (cost $654,095,682) ............... 712,050,885
Other assets in excess of liabilities--2.1% ................. 10,635,121
-----------
Liquidation value of preferred stock--(45.2%) ............... (225,000,000)

Net Assets Applicable to Common Shareholders--100% .......... $ 497,686,006
============
</TABLE>

- ----------
+This bond is prerefunded. See glossary for definition.
++Option call provisions: date (month/year) and prices of the earliest option
call or redemption. There may be other call provisions at varying prices
at later dates.
*Rating: Using the higher of Standard & Poor's, Moody's or Fitch's rating.
**For purposes of amortized cost valuation, the maturity date of these
instruments are considered to be the next date on which the security can be
redeemed at par or the next date on which the rate of interest is adjusted.

- --------------------------------------------------------------------------------
KEY TO ABBREVIATIONS

AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty Insurance Company
CAPMAC -- Capital Markets Assurance Corporation
CGIC -- Capital Guaranteed Insurance Company
C.O.P. -- Certificate of Participation
CONNIE LEE -- College Construction Loan Insurance Association
FGIC -- Financial Guaranty Insurance Company
FRDD -- Floating Rate DailyDemand
FSA -- Financial Security Assurance
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
- --------------------------------------------------------------------------------
9

See Notes to Financial Statements.
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------

ASSETS
Investments, at value (cost
$654,095,682) (Note 1) ................................... $712,050,885
Interest receivable ........................................ 11,582,208
Cash ....................................................... 69,921
------------
723,703,014
------------
LIABILITIES
Dividends payable--common stock ............................ 268,366
Dividends payable--preferred stock ......................... 114,566
Advisory fee payable (Note 2) .............................. 222,509
Administration fee payable (Note 2) ........................ 44,501
Other accrued expenses ..................................... 367,066
------------
1,017,008
------------
NET INVESTMENT ASSETS ...................................... $722,686,006
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ..................................... $ 454,106
Paid-in capital in excess of par ....................... 421,119,385
Preferred stock (Note 4) ................................. 225,000,000
------------
646,573,491

Undistributed net investment income ...................... 18,154,268
Accumulated net realized gain ............................ 3.044
Net unrealized appreciation .............................. 57,955,203
------------
Net investment assets, December 31, 1996 ................. $722,686,006
============
Net assets applicable to common
shareholders ............................................... $497,686,006
============
Net asset value per common share:
($497,686,006 / 45,410,639 shares of
common stock issued and outstanding) ..................... $10.96
=======

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------

NET INVESTMENT INCOME

Income
Interest and discount earned ................................ $ 42,816,245
------------

Expenses
Investment advisory ......................................... 2,545,338
Auction agent ............................................... 566,000
Administration .............................................. 509,068
Custodian ................................................... 205,000
Reports to shareholders ..................................... 125,000
Directors ................................................... 72,000
Transfer agent .............................................. 55,000
Audit ....................................................... 25,000
Legal ....................................................... 20,000
Miscellaneous ............................................... 363,712
------------
Total expenses ............................................ 4,486,118
------------
Net investment income ......................................... 38,330,127
------------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Net realized gain on investments ............................ 138,402
Net change in unrealized appreciation
(depreciation) on investments ............................. (11,034,435)
------------
Net loss on investments ..................................... (10,896,033)
------------

NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS ................................... $ 27,434,094
============

See Notes to Financial Statements ......

10
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENTS OF CHANGES
IN NET INVESTMENT ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
1996 1995
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:
Net investment income ............................................. $ 38,330,127 $ 39,312,334
Net realized gain on investments .................................. 138,402 1,759,203
Net change in unrealized appreciation (depreciation) on investments (11,034,435) 49,939,651
------------- -------------
Net increase in net investment assets resulting from operations ... 27,434,094 91,011,188
------------- -------------
Dividends and distributions:
To preferred shareholders from net investment income .............. (7,850,109) (8,475,663)
To preferred shareholders from capital gains ...................... (30,359) (454,791)
To common shareholders from net investment income ................. (27,819,265) (27,927,543)
To common shareholders from capital gains ......................... (108,032) (1,500,458)
------------- -------------
(35,807,765) (38,358,455)
------------- -------------
Total increase (decrease) ................................... (8,373,671) 52,652,733
------------- -------------
NET INVESTMENT ASSETS

Beginning of year ...................................................... 731,059,677 678,406,944
------------- -------------
End of year ............................................................ $ 722,686,006 $ 731,059,677
============= =============
</TABLE>

See Notes to Financial Statements.

11
<PAGE>

- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 11.14 $ 9.98 $ 11.30 $ 10.04 $ 9.56

Net investment income .......................... .84 .87 .83 .82 .82
Net realized and unrealized gain (loss) on
investments .................................. (.24) 1.14 (1.39) 1.17 .42

Net increase (decrease) from investment operations .60 2.01 (.56) 1.99 1.24

Dividends from net investment income to:
Preferred shareholders ......................... (.17) (.19) (.14) (.12) (.15)
Common shareholders ............................ (.61) (.62) (.62) (.61) (.61)
Total dividends ................................ (.78) (.81 (.76) (.73) (.76)
Distributions from capital gains to:
Preferred shareholders ......................... --* (.01) -- -- --
Common shareholders ............................ --* (.03) -- -- --

Total distributions ............................ -- (.04) -- -- --
Net asset value, end of year** ................... $ 10.96 $ 11.14 $ 9.98 $ 11.30 $ 10.04
Market value, end of year** ...................... $ 10.25 $ 10.125 $ 8.875 $ 10.375 $ 10.00

TOTAL INVESTMENT RETURN+: ........................ 7.43% 21.67% (8.89%) 10.01% 10.51%

RATIOS TO AVERAGE NET ASSETS
OFCOMMONSHAREHOLDERS++:
Operating expenses ............................... .91% .90% .94% .87% .91%
Net investment income ............................ 7.75% 8.06% 7.91% 7.61% 8.43%

SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ................................. $ 494,667 $ 487,923 $ 475,529 $ 492,138 $ 441,368
Portfolio turnover ............................... 5% 9% 21% 1% 35%
Net assets of common shareholders, end of year
(in thousands) ................................. $ 497,686 $ 506,060 $ 453,407 $ 513,339 $ 455,954
Asset coverage per share of preferred stock,
end of year# ................................... $ 80,298 $ 81,243 $ 150,783 $ 164,075 $ 151,323
Preferred stock outstanding (in thousands) ....... $ 225,000 $ 225,000 $ 225,000 $ 225,000 $ 225,000
</TABLE>

- ----------
* Actual amount paid to preferred shareholders was $0.0007 and to common
shareholders was $0.0024.
** Net asset value and market value are published in The Wall Street
Journal each Monday.
# A stock split occured on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common
stock at the current market price on the first day and a sale at the
current market price on the last day of each period reported.
Dividends are assumed, for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment
plan. This calculation does not reflect brokerage commissions. Total
investment returns for periods of less than one full year are not
annualized.
++ Ratios calculated on the basis of income and expenses applicable to
both the common and preferred shares relative to the average net
assets of common shareholders. Ratios do not reflect the effect of
dividend payments to preferred shareholders. The information above
represents the audited operating performance data for a share of
common stock outstanding, total investment return, ratios to average
net assets and other supplemental data, for each of the years
indicated. This information has been determined based upon financial
information provided in the financial statements and market value data
for the Trust's common stock.

See Notes to Financial Statements.

12
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. ACCOUNTING The BlackRock Municipal Target Term Trust Inc.
POLICIES (the "Trust"), a Maryland corporation is a
diversified closed-end management investment
company. The Trust's investment objective is to manage a diversified portfolio
of investment grade securities that will return $10 per share to investors on or
about December 31, 2006 while providing current income exempt from regular
federal income tax. The ability of issuers of debt securities held by the Trust
to meet their obligations may be affected by economic developments in a specific
state, industry or region. No assurance can be given that the Trust's investment
objective will be achieved.

The following is a summary of significant accounting policies followed by
the Trust.

SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.

Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost, if their term to maturity from date of purchase is
60 days or less, or by amortizing their value on the 61st day prior to maturity,
if their original term to maturity from date of purchase exceeded 60 days.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust amortizes premium and accretes original issue discount on securities
purchased using the interest method.

FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal income tax provision is required.

DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends to common
shareholders monthly from net investment income. Capital gains, if any, in
excess of loss carryforwards may be distributed annually. Dividends and
distributions are recorded on the ex-dividend date. Dividends and distributions
to preferred shareholders are accrued and determined as described in Note 4.

RECLASSIFICATION OF CAPITAL ACCOUNTS: Effective Jan-uary 1, 1994, the Trust
began accounting and reporting for permanent differences between financial and
tax reporting in accordance with the American Institute of Certified Public
Accountants' Statement of Position, 93-2; Determination, Disclosure and
Financial Statement Presentation of Income, Capital Gain and Return of Capital
Distributions by Investment Companies.The effect of adopting the statement for
the year ended December 31, 1995 was to decrease accumulated net realized gain
and increase undistributed net investment income by $4,426. Net investment
income, net realized gains and net assets were not affected by this change.

ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2. AGREEMENTS The Trust has an Investment Advisory Agreement
with BlackRock Financial Management, Inc. (the
"Adviser") a wholly-owned corporate subsidiary of PNC Asset Management Group,
Inc., the holding company for PNC's asset management business and an
Administration Agreement with Prudential Mutual Fund Management, Inc. ("PMF"),
an indirect, wholly owned subsidiary of The Prudential Insurance Company of
America.

The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to PMF is also computed weekly
and payable monthly at an annual rate of 0.07% of the Trust's average weekly net
investment assets.

<PAGE>

Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser. PMF pays occupancy and certain clerical
and accounting costs of the Trust. The Trust bears all other costs and expenses.

NOTE 3. PORTFOLIO Purchases and sales of investment securities,
SECURITIES other than short-term investments for the year
ended December 31, 1996 aggregated $31,912,768 and
$35,713,254, respectively.

The federal income tax basis of the Trust's investments at December 31,
1996 was substantially the same as the basis for financial reporting purposes
and, accordingly, net and gross unrealized appreciation was $57,955,203.

NOTE 4. CAPITAL There are 200 million shares of $.01 par value
common stock authorized. Of the 45,410,639 common
shares outstanding at December 31, 1996, the Adviser owned 10,639 shares. As of
December 31, 1996, there were 9,000 preferred shares outstanding as follows:
Series W7-3,000, Series F7-3,000 and Series W28-3,000.

The Trust may classify or reclassify any unissued shares of common stock
into one or more series of preferred stock. On November 21, 1991 the Trust
reclassified 4,500 shares of common stock and issued 3 series of Auction Market
Preferred Stock ("Preferred Stock") as follows: Series W7--1,500 shares, Series
F7--1,500 shares and Series W28--1,500 shares. The Preferred Stock had a
liquidation value of $50,000 per share plus any accumulated but unpaid
dividends. On May 16, 1995 shareholders approved a proposal to split each share
of preferred stock into two shares and simultaneously reduce each share's
liquidation preference from $50,000 to $25,000 plus any accumulated but unpaid
dividends. The stock split occurred on July 24, 1995.

Dividends on Series W7 and Series F7 are cumulative at a rate which is
reset every 7 days based on the results of an auction. Dividends on Series W28
are also cumulative at a rate which is reset every 28 days based on the results
of an auction. Dividend rates ranged from 2.50% to 4.25% during the year ended
December 31, 1996.

The Trust may not declare dividends or make other distributions on shares
of common stock or purchase any such shares if, at the time of the declaration,
distribution, or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.

The Preferred Stock is redeemable at the option of the Trust, in whole or
in part, on any dividend payment date at $25,000 per share plus any accumulated
or unpaid dividends whether or not declared. The Preferred Stock is also subject
to mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.

The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by shareholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the Preferred
shares and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.

NOTE 5. DIVIDENDS Subsequent to December 31, 1996, the Board of
Directors of the Trust declared dividends from
undistributed earnings of $0.05125 per common share payable January 31, 1997 to
shareholders of record on January 15, 1997.

For the period January 1, 1997 to January 31, 1997 dividends and
distributions declared on preferred shares totalled $673,725 in aggregate for
the three outstanding preferred share series.

14
<PAGE>

NOTE 6. QUARTERLY DATA
(UNAUDITED)

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
NET INCREASE
NET REALIZED AND (DECREASE) IN
UNREALIZED NET INVESTMENT
NET INVESTMENT GAIN (LOSS) ON ASSETS RESULTING
INCOME INVESTMENTS FROM OPERATIONS
PER PER PER
QUARTERLY TOTAL COMMON COMMON COMMON
PERIOD INCOME AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE
- ------------------ ---------- ------------------ -------------------- ------------------
January 1, 1995 to
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1995 $ 10,652,689 $ 9,619,611 $.21 $ 29,779,929 $ .66 $ 39,399,540 $ .87
April 1, 1995 to
June 30, 1995 10,600,843 9,529,910 .21 5,897,362 .13 15,427,272 .34
July 1, 1995 to
September 30, 1995 11,745,300 10,646,786 .24 6,545,040 .14 17,191,826 .38
October 1, 1995 to
December 31, 1995 10,702,981 9,516,027 .21 9,476,523 .21 18,992,550 .42
January 1, 1996 to
March 31, 1996 10,733,378 9,619,451 .21 (12,417,987) (.27) (2,798,536) (.06)
April 1, 1996 to
June 30, 1996 10,695,653 9,569,406 .21 (6,119,277) (.13) 3,450,129 .08
July 1, 1996 to
September 30, 1996 10,694,241 9,560,525 .21 2,101,127 .04 11,661,652 .25
October 1, 1996 to
December 31, 1996 10,692,973 9,580,745 .21 5,540,104 .12 15,120,849 .33
- ----------------------------------------------------------------------------------------------------------
</TABLE>

- ---------------------------------------------------------------------------------------------------
DIVIDENDS
COMMON SHARES PREFERRED SHARES*
PERIOD
PER PER SHARE PRICE OF END
QUARTERLY COMMON COMMON COMMON STOCK NET ASSET
PERIOD AMOUNT SHARE AMOUNT SHARE HIGH LOW VALUE
- ------------------ ----------------- ----------------- ------------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1995 to
March 31, 1995 $ 6,981,886 $.15375 $ 2,233,857 $.05 $9 7/8 $8 3/4 $ 10.65
April 1, 1995 to
June 30, 1995 6,981,885 .15375 2,260,138 .05 10 9 5/8 10.79
July 1, 1995 to
September 30, 1995 7,161,132 .15770 2,120,077 .05 10 3/16 9 3/4 10.96
October 1, 1995 to
December 31, 1995 8,303,098 .18284 2,315,382 .05 10 5/8 10 11.14
January 1, 1996 to
March 31, 1996 6,981,886 .15375 1,988,126 .04 10 1/2 10 10.88
April 1, 1996 to
June 30, 1996 6,981,885 .15375 2,006,491 .05 10 3/8 10 10.76
July 1, 1996 to
September 30, 1996 6,981,703 .15375 1,915,998 .04 10 3/8 10 10.82
October 1, 1996 to
December 31, 1996 6,981,823 .15375 1,969,853 .04 10 1/2 10 1/8 10.96
- ---------------------------------------------------------------------------------------------------
</TABLE>

* For the year ended December 31, 1996 the average annualized rate paid to
preferred shareholders was 3.50%.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

The Shareholders and
Board of Directors of
The BlackRock Municipal Target Term Trust Inc.:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The BlackRock Municipal Target Term Trust Inc.
as of December 31, 1996 and the related statement of operations for the year
then ended, the statement of changes in net investment assets for each of the
two years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
text basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1996 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Municipal Target Term Trust Inc. as of December 31, 1996, the results of its
operations, the changes in its net investment assets and the financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.

/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP

New York, New York
February 3, 1997

16
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's fiscal year end as to the federally exempt interest dividends
received by you during such fiscal year. Accordingly, we are advising you that
during the year ended December 31, 1996 the Trust paid a total of $0.612621 in
dividends per common share that were federally tax-exempt interest dividends.

Additionally, the following summarizes the special taxable distributions
declared by the Trust during the fiscal year:

SHORT-TERM LONG-TERM
RECORD PAYABLE CAPITAL GAINS CAPITALGAINS
DATE DATE PER SHARE* PER SHARE
------ ------- ----------- -----------

Common Stock 12/16/96 12/31/96 $0.001633 $0.000746
Preferred Stock:
Series W-7 12/04/96 12/05/96 $2.310000 $1.060000
Series F-7 12/06/96 12/09/96 $2.290000 $1.050000
Series W-28 12/24/96 12/26/96 $2.340000 $1.070000

* - Short-term capital gains are taxable as ordinary income.
For purposes of preparing your annual federal income tax return, however, you
should report the amounts as reflected on the appropriate Form 1099-DIV or
substitute 1099 DIV.

- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------

Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested by State Street Bank and Trust Company (the "Plan
Agent") in Trust shares. Shareholders who do not participate in the Plan will
receive all distributions in cash paid by check in United States dollars mailed
directly to the shareholders of record (or if the shares are held in street or
other nominee name, then to the nominee) by the transfer agent, as dividend
disbursing agent.

The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange for the participants' accounts. The Trust will not issue shares
under the Plan.

Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.

The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the Trust.However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Trust at least 90 days before the record
date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent upon at least 90 days' written notice to all
shareholders of the Trust. All correspondence concerning the Plan should be
directed to the Plan Agent at (800) 699-1BFM. The addresses are on the front of
this report.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders, or to its charter
or by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.

17
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------

THE TRUST'S INVESTMENT OBJECTIVE

The Trust's investment objective is to provide current income exempt from
regular Federal income tax and to return $10 per share (the initial public
offering price per share) to investors on or about December 31, 2006.

WHO MANAGES THE TRUST?

BlackRock Financial Management, Inc. (BlackRock or the Adviser) is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages
approximately $43 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded on the New York or American
Stock Exchanges, several open-end funds and over 100 separate accounts for
various clients in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset
Management Group, Inc. which is a division of PNC Bank, N.A., one of the nations
largest banking organizations.

WHAT CAN THE TRUST INVEST IN?

The Trust intends to invest substantially all of its assets in a diversified
portfolio of tax-exempt Municipal Obligations which are rated Aaa by Moody's or
AAA by S&P or are covered by insurance or a guaranty of the timely payment of
both principal and interest from an entity having a Aaa or AAA rating or are
determined by the Trust's adviser to be of comparable credit quality.

WHAT IS THE ADVISER'S INVESTMENT STRATEGY?

The primary investment strategy for the Trust is to seek to closely match the
maturity of the assets of the portfolio with the future return of the initial
investment on or about December 31, 2006. Accordingly, the majority of the
funds' assets are invested in securities which have maturities that are similar
to the maturity date of the fund. Most municipal securities, however, have
optional redemption provisions (or "calls") which allow the issuer to redeem the
bonds on specified dates prior to their maturity. While call features are more
predictable than prepayments on mortgage-backed securities, they require
additional active, management considerations for the Trust. If a portion of the
Trust is invested in callable bonds, the yield to call date is analyzed instead
of the yield to the maturity of the bond, and should the security be called,
BlackRock will generally seek to reinvest the proceeds in additional assets with
maturities which are not significantly longer than the remaining term of the
Trust. In addition, in order to seek to earn back the underwriting discount and
upfront expenses and have the ability to return the full initial investment at
the end of the term, the Trust generally seeks to retain a small portion of the
income earned on its portfolio each year.

In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from Federal income tax to
investors. The portfolio managers will attempt to achieve this objective by
investing in securities that provide competitive tax-exempt income. In addition,
leverage will be used (in an amount up to 35% of the total assets) to enhance
the income of the portfolio. In order to maintain competitive yields as the
Trust approaches maturity and depending on market conditions, the Adviser will
attempt to purchase securities with call protection or maturities as close to
the Trust's maturity date as possible. Securities with call protection should
provide the portfolio with some degree of protection against reinvestment risk
during times of lower prevailing interest rates. Since the Trust's primary goal
is to return the initial offering price at maturity, any cash that the Trust
receives prior to its maturity date will be reinvested in securities with
maturities which coincide with the remaining term of the Trust. It is important
to note that the Trust will be managed so as to preserve the integrity of the
return of the initial offering price. If market conditions, such as high
interest rate volatility, force a choice between current income and risking the
return of the initial offering price, it is likely that the return of the
initial offering price will be emphasized.

<PAGE>

HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?

The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, State Street
Bank and Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial advisor to determine whether their brokerage
firm offers dividend reinvestment services.

LEVERAGE CONSIDERATIONS IN A TERM TRUST

Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 35% of total assets.

Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. BlackRock's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should BlackRock consider
that reduction to be in the best interests of the shareholders.

SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS

THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.

RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.

DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.

LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.

MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BMN) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.

ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.

ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.

MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.

ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax.

<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
GLOSSARY

CLOSED-END FUND: Investment vehicle which initially offers a
fixed number of shares and trades on a stock
exchange. The fund invests in a portfolio of
securities in accordance with its stated
investment objectives and policies.

DISCOUNT: When a fund's net asset value is greater than
its stock price the fund is said to be trading
at a discount.

DIVIDEND: This is income generated by securities in a
portfolio and distributed to shareholders after
the deduction of expenses. This Trust declares
and pays dividends on a monthly basis.

DIVIDEND REINVESTMENT: Shareholders may elect to have all dividends and
distributions of capital gains automatically
reinvested into additional shares of the Trust.

MARKET PRICE: Price per share of a security trading in the
secondary market. For a closed-end fund, this is
the price at which one share of the fund trades
on the stock exchange. If you were to buy or
sell shares, you would pay or receive the market
price.

NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust,
plus income accrued on its investments, minus
any liabilities including accrued expenses,
divided by the total number of outstanding
shares. It is the underlying value of a single
share on a given day. Net asset value for the
Trust is calculated weekly and published in
Barron's on Saturday and THE NEW YORK TIMES or
THE WALL STREET JOURNAL each Monday.

PREMIUM: When a fund's stock price is greater than its
net asset value, the fund is said to be trading
at a premium.

PRE-REFUNDED BONDS: These securities are collaterized by U.S.
Government securities which are held in escrow
and are used to pay principal and interest on
the tax exempt issue and retire the bond in full
at the date indicated, typically at a premium to
par.

<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- ----------------------------------------------------------------------------------------
TAXABLE TRUSTS
- ----------------------------------------------------------------------------------------
STOCK TERMINATION
PERPETUAL TRUSTS SYMBOL DATE
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A

TERM TRUSTS
The BlackRock 1998 Term Trust Inc. BBT 12/98
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BLK 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09

TAX-EXEMPT TRUSTS
- ----------------------------------------------------------------------------------------
STOCK TERMINATION
PERPETUAL TRUSTS SYMBOL DATE

The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A

TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</TABLE>

IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE CALL BLACKROCK AT (800) 227-7BFM (7236)
OR CONSULT WITH YOUR FINANCIAL ADVISOR.

21
<PAGE>

- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------

BlackRock Financial Management (BlackRock) is a registered investment
adviser which specializes in managing high quality fixed income securities, both
taxable and tax exempt. BlackRock currently manages approximately $43 billion of
assets across the government, mortgage, corporate and municipal sectors. These
assets are managed on behalf of institutional and individual investors in 21
closed-end funds traded either on the New York Stock Exchange or American Stock
Exchange, several open-end funds and over 100 institutional clients in the
United States and overseas. BlackRock's institutional investor base includes
Chrysler Corporation Master Retirement Trust, General Retirement System of the
City of Detroit, State Treasurer of Florida, Ford Motor Company Pension Plan,
General Electric Pension Trust and Unisys Corporation Master Trust.

BlackRock was formed in April 1988 by fixed income professionals who
sought to create an asset management firm specializing in managing fixed income
securities for individuals and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety of
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities market, including the
creation of the CMO, the floating rate CMO, the senior/subordinated pass-through
and the multi-class asset-backed security.

BlackRock is unique among asset management and advisory firms in the
significant emphasis it places on the development of proprietary analytical
capabilities. A quarter of the professionals at BlackRock work full-time in the
design, maintenance and use of such systems which are otherwise not generally
available to investors. BlackRock's proprietary analytical tools are used for
evaluating, investing in and designing investment strategies and portfolios of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.

BlackRock has developed investment products which respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. BlackRock introduced the first closed-end mortgage fund, the first
taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAAf rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
BlackRock's closed-end funds currently have dividend reinvestment plans which
are designed to provide an ongoing source of demand for the stock in the
secondary market. BlackRock manages a ladder of alternative investment vehicles,
with each fund having specific investment objectives and policies.

In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
you may have about your BlackRock funds and thank you for the continued trust
you place in our abilities.

<PAGE>

BLACKROCK

DIRECTORS
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein

OFFICERS
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Karen H. Sabath, Secretary

INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM

ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, NY 10019

CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 669-1BFM

AUCTION AGENT
Bankers Trust Company Four
Albany Street New York, NY 10006

INDEPENDENT AUDITORS
Deloitte & Touche LLP Two
World Financial Center
New York, NY 10281-1434

LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022

THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
c/o Prudential Mutual Fund Management LLC
Gateway Center 3
100 Mulberry Street
Newark, NJ07102-4077
092476-10-5
092476-20-4
092476-30-3
092476-40-2

BLACKROCK
================================================================================
THE
MUNICIPAL TARGET
TERM TRUST INC.
================================================================================
ANNUAL REPORT
DECEMBER 31, 1996

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