MERRILL LYNCH MUNICIPAL STRATEGY FUND INC
SC 13E4/A, 1996-05-31
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         As filed with the Securities and Exchange Commission on May 31, 1996
                                             Securities Act File No. 33-54655
                                    Investment Company Act File No. 811-07203
                                                                           



                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                               ________________

                                SCHEDULE 13E-4
                        ISSUER TENDER OFFER STATEMENT
                    (Pursuant to Section 13(e)(1) of the 
                       Securities Exchange Act of 1934)

                               AMENDMENT NO. 1

                 MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
                               (Name of Issuer)

                 MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
                     (Name of Person(s) Filing Statement)

              Shares of Common Stock, Par Value $0.10 per share
                        (Title of Class of Securities)

                                 59020H 10 4
                    (CUSIP Number of Class of Securities)

                                Arthur Zeikel
                 Merrill Lynch Municipal Strategy Fund, Inc.
                            800 Scudders Mill Road
                        Plainsboro, New Jersey  08536
                                (609) 282-2800
         (Name, Address and Telephone Number of Person Authorized to
 Receive Notices and Communications on Behalf of Person(s) Filing Statement)

                                  Copies to:


Thomas R. Smith, Jr., Esq.              Philip L. Kirstein, Esq.
Brown & Wood                            Merrill Lynch Asset Management
One World Trade Center                  P.O. Box 9011
New York, New York  10048-0557          Princeton, New Jersey  08543-9011


                                April 30, 1996
                      (Date Tender Offer First Published
                      Sent or Given to Security Holders)

                                                                            


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     This Amendment No.  1 to the Issuer  Tender Offer Statement on  Schedule
13E-4 of Merrill Lynch Municipal Strategy Fund, Inc. (the "Fund") relating to
an offer  to purchase (the "Offer") 1,000,000 of  the Fund's shares of common
stock, par value $0.10 per share (the "Shares") and originally filed with the
Securities and  Exchange Commission on  April 30, 1996 constitutes  the final
amendment pursuant to  Rule 13e-4(c)(3) under the Securities  Exchange Act of
1934 and General Instruction D of Schedule 13E-4.



     The Offer  terminated at 12:00 midnight, New York  time, on May 28, 1996
(the  "Expiration Date").   Pursuant  to the  Offer, 139,023.590  Shares were
tendered, all  of which were  accepted by  the Fund for  repurchase at a  net
asset value of $9.85 per share, as determined as of the close of the New York
Stock Exchange  on the Expiration  Date, for an  aggregate purchase  price of
$1,369,382.36.
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                                  SIGNATURE


     After due inquiry  and to the best of my knowledge and belief, I certify
that  the information  set forth  in  this statement  is  true, complete  and
correct.


                         MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.



May 31, 1996   By   /s/ Terry K. Glenn                                     
                  ------------------------------------------
                              (Terry K. Glenn,
                               Executive Vice President)
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