UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Morgan Stanley Insured Municipal Income Trust

(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices)(Zip code)

Randy Takian
522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

Registrant’s telephone number, including area code: 212-296-6990

Date of fiscal year end: October 31, 2008

Date of reporting period: July 31, 2008

 

 

Item 1. Schedule of Investments.

The Trust’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

Morgan Stanley Insured Municipal Income Trust
Portfolio of Investments § July 31, 2008 (unaudited)

PRINCIPAL
AMOUNT IN						COUPON				MATURITY
THOUSANDS						RATE				DATE				VALUE
				Tax-Exempt Municipal Bonds (150.9%)
				Arizona (1.4%)
$	1,595			Arizona Certificates of Participation, Ser 2008 A (FSA Insd)			5.00	%			09/01/26			$	1,603,374
	2,500			University of Arizona, 2003 Ser B COPs (AMBAC Insd)			5.00				06/01/23				2,541,650
															4,145,024
				California (32.6%)
	1,475			Alameda County Joint Powers Authority, Ser 2008 (FSA Insd)			5.00				12/01/24				1,511,388
	1,160			Alvord Unified School District, 2007 Election Ser 2007 A (FSA Insd)			5.00				08/01/27				1,190,311
	20,000			Anaheim Public Financing Authority, California, Anaheim Electric Ser 2007-A (MBIA Insd)(a)			4.50				10/01/37				18,106,200
	8,000			California, Ser 2007 (MBIA Insd)			4.25				08/01/33				6,823,999
	3,050			California Department of Water Resources Power Supply, Ser 2008 H (FSA Insd)			5.00				05/01/22				3,178,863
	10,000			California Infrastructure & Economic Development Bank, Bay Area Toll Bridges Seismic Retrofit 1st Lien Ser 2003 A (AMBAC Insd) (ETM) (a)			5.00				01/01/28				10,676,000
	5,000			California Infrastructure & Economic Development Bank, Bay Area Toll Bridges Seismic Retrofit 1st Lien Ser 2003 A (FGIC Insd) (ETM)			5.00				01/01/28				5,338,000
	6,000			Golden State Tobacco Securitization Corporation, California, Enhanced Asset Backed Ser 2005 A (Insd FGIC)			5.00				06/01/38				5,408,400
	9,000			Long Beach, Harbor Refg Ser 1998 A (AMT) (FGIC Insd)			6.00				05/15/18				9,676,890
	3,000			Los Angeles, California, Ser 2004 A (MBIA Insd)			5.00				09/01/24				3,083,760
	5,000			Los Angeles Department of Water & Power, California, Water 2004 Ser C (MBIA Insd) (a)			5.00				07/01/24				5,137,538
	4,000			Oxnard Financing Authority, Water & Power, Water 2004 Ser C (XLCA Insd)			5.00				06/01/28				3,887,000
	3,000			Sacramento County Sanitation District Financing Authority, California, Sacramento Regional Ser 2006 (FGIC Insd)			5.00				12/01/36				2,968,410
	5,000			San Diego County Water Authority, California, Ser 2002 A COPs (MBIA Insd)			5.00				05/01/27				5,060,700
	5,000			San Diego County Water Authority, California, Ser 2004 A COPs (FSA Insd) (a)			5.00				05/01/29				5,036,650
	3,000			San Francisco City & County, City Buildings Ser 2007 A COPs (FGIC Insd)			4.50				09/01/37				2,649,990
	2,000			University of California, Ser 2003 B (AMBAC Insd)			5.00				05/15/22				2,045,980
	3,310			University of California, Ser 2007-S (FSA Insd) (a)			4.50				05/15/31				3,209,915
	2,690			University of California, Ser 2007-S (FSA Insd) (a)			4.50				05/15/35				2,576,350
															97,566,344
				Colorado (2.2%)
	4,000			Arkansas River Power Authority, Colorado, Power Ser 2006 (XLCA Insd)			5.25				10/01/40				3,447,040
	630			Colorado Health Facilities Authority, Ser 2006 (FSA Insd)			4.75				09/01/25				623,435
	3,000			Denver Convention Center Hotel Authority, Refg Ser 2006 (XLCA Insd)			5.00				12/01/30				2,570,820
															6,641,295
				Connecticut (0.5%)
	1,525			Connecticut Health & Educational Facilities Authority, Quinnipiac University Issue Ser 2007 K-2 (MBIA Insd)			5.00				07/01/25				1,542,782
				District of Columbia (2.1%)
	2,000			District of Columbia Ballpark, Ser 2006 B-1 (FGIC Insd)			5.00				02/01/31				1,837,980
	3,000			District of Columbia, American Association for the Advancement of Science Ser 1997 (AMBAC Insd)			5.125				01/01/27				3,008,580
	1,350			District of Columbia Water & Sewer Authority, Refg Sub-Lien Ser 2008A (AGC Insd)			5.00				10/01/28				1,362,771
															6,209,331
				Florida (8.1%)
	1,550			Florida Mid-Bay Bridge Authority, Refg Ser 2008 (AGC Insd)			5.00				10/01/27				1,527,355
	15,000			Miami-Dade County School Board, 2003 Ser A (FGIC Insd)			5.00				08/01/29				14,452,350
	3,000			Orange County School Board, Ser 2001 A COPs (AMBAC Insd)			5.25				08/01/14				3,165,810
	5,000			Tampa Bay Water Authority, Ser 2001 A (FGIC Insd)			5.00				10/01/28				5,002,550
															24,148,065
				Georgia (4.1%)
	5,000			Atlanta, Airport Passenger Facilities Sub-Lien Ser 2004 C (FSA Insd) (a)			5.00				01/01/33				5,002,278
	5,000			Atlanta, Water & Wastewater, Ser 2004 (FSA Insd)			5.00				11/01/23				5,093,600
	2,000			Augusta, Water & Sewer Ser 2004 (FSA Insd)			5.25				10/01/39				2,054,080
															12,149,958

PRINCIPAL
AMOUNT IN						COUPON				MATURITY
THOUSANDS						RATE				DATE				VALUE
				Hawaii (1.7%)
	5,000			Hawaii Department of Budget & Finance, Hawaiian Electric Co Ser 1999 C (AMT) (AMBAC Insd)			6.20				11/01/29				5,044,000
				Idaho (0.9%)
	2,500			Idaho Housing & Finance Association, Federal Highway Trust, Ser 2008 A (AGC Insd)			5.25				07/15/24				2,671,850
				Illinois (6.7%)
	480			Chicago Transit Authority, Capital Grant Receipts Federal Transit Administration Section 5309 Ser 2008 (AGC Insd)			5.25				06/01/25				499,032
	1,210			Chicago Transit Authority, Capital Grant Receipts Federal Transit Administration Section 5309 Ser 2008 (AGC Insd)			5.25				06/01/26				1,255,085
	5,000			Chicago, O’Hare Int’l Airport, Third Lien Ser 2005 A (MBIA Insd)			5.25				01/01/25				5,021,100
	1,175			DeKalb County Community Unit School District #428, Ser 2008 (FSA Insd)			5.00				01/01/27				1,197,043
	2,000			Illinois Finance Authority, Swedish American Hospital Ser A (FSA Insd)			5.00				11/15/31				1,914,960
	6,575			Kendall, Kane & Will Counties, Community Unit School District #308 Capital Appreciation Ser 2008 (FSA Insd)			0.00				02/01/27				2,493,635
	3,000			Metropolitan Pier & Exposition Authority, McCormick Place Refg Ser 2002 B (MBIA Insd)			0.00	(b)			06/15/18				2,650,020
	5,000			Metropolitan Pier & Exposition Authority, McCormick Place Ser 2002 A (MBIA Insd)			5.25				06/15/42				5,052,750
															20,083,625
				Indiana (1.5%)
	2,000			Indiana Health Facilities Financing Authority, Community Health Ser 2005 A (AMBAC Insd)			5.00				05/01/35				1,890,000
	2,400			Marion County Convention & Recreational Facilities Authority, Refg Ser 2003 A (AMBAC Insd)			5.00				06/01/19				2,479,344
															4,369,344
				Louisiana (1.4%)
	4,000			Lafayette, Utilities Ser 2004 (MBIA Insd)			5.25				11/01/25				4,139,560
				Massachusetts (1.1%)
	3,275			Massachusetts Municipal Wholesale Electric Company, 1993 Ser A (AMBAC Insd) (ETM)			5.00				07/01/10				3,380,029
				Michigan (1.9%)
	2,390			Detroit, Sewage Refg Ser 2003 A (FSA Insd)			5.00				07/01/28				2,392,988
	1,125			Ferris State University of Michigan, Refg Ser 2008 (FSA Insd)			4.50				10/01/23				1,107,923
	425			Ferris State University of Michigan, Refg Ser 2008 (FSA Insd)			4.50				10/01/24				416,368
	760			Wayne State University of Michigan, Refg Ser 2008 (FSA Insd)			5.00				11/15/25				780,877
	960			Wayne State University of Michigan, Refg Ser 2008 (FSA Insd)			5.00				11/15/29				969,936
															5,668,092
				Missouri (0.8%)
	2,500			Missouri Joint Municipal Electric Utility Commission Plum Point Ser 2006 (MBIA Insd)			5.00				01/01/26				2,334,375
				Montana (0.7%)
	2,000			Montana Facility Finance Authority, Bebefits Health Care Ser 2007 (AGC Insd)			5.00				01/01/37				1,967,120
				Nebraska (1.6%)
	5,000			Nebraska Public Power District, 2003 Ser A (AMBAC Insd)			5.00				01/01/35				4,857,000
				Nevada (3.4%)
	5,080			Las Vegas Water District, Impr & Refg Ser 2003 a (FGIC Insd)			5.25				06/01/19				5,357,978
	975			Nevada Department of Business & Industry, Las Vegas Monorail 1st Tier Ser 2000 (AMBAC Insd)			5.375				01/01/40				646,844
	4,000			Nevada Department of Business & Industry, Las Vegas Monorail 1st Tier Ser 2000 (AMBAC Insd) (WI)			5.00				06/01/26				4,109,241
															10,114,063
				New Hampshire (0.4%)
	1,300			New Hampshire Health & Education Facilities Authority, University of New Hampshire Ser 2001 (AMBAC Insd)			5.125				07/01/33				1,300,624
				New Jersey (1.7%)
	4,000			New Jersey Transportation Trust Fund Authority, Ser 2005 C (FGIC Insd)			5.25				06/15/20				4,205,600
	1,000			University of Medicine & Dentistry, Ser 2004 COPs (MBIA Insd)			5.00				06/15/29				962,330
															5,167,930

PRINCIPAL
AMOUNT IN						COUPON				MATURITY
THOUSANDS						RATE				DATE				VALUE
				New York (17.7%)
	16,000			Hudson Yards Infrastructure Corporation, 2007 Ser A (MBIA Insd)			4.50				02/15/47				13,960,320
	3,000			Long Island Power Authority, Refg Ser 2003 C (FSA Insd)			5.00				09/01/28				3,029,340
	4,000			Long Island Power Authority, Ser 2006 A (XLCA Insd)			5.00				12/01/26				3,947,760
	3,000			Metropolitan Transportation Authority, Dedicated Tax Fund Refg Ser 2002 A (FSA Insd)			5.25				11/15/24				3,113,070
	10,000			Metropolitan Transportation Authority, Transportation Refg Ser 2002 A (FGIC Insd)			5.00				11/15/25				9,907,900
	2,000			New York City Industrial Development Agency, Queens Baseball Stadium Ser 2006 (AMBAC Insd)			5.00				01/01/31				1,937,040
	2,500			New York City Industrial Development Agency, Yankee Stadium Ser 2006 (FGIC Insd)			5.00				03/01/46				2,354,600
	1,735			New York City Transitional Finance Authority, 2000 Ser C (AMBAC Insd)			5.25				08/01/21				1,797,876
	2,500			New York State Transitional Finance Authority, 2000 Ser C (AMBAC Insd)(c)			5.25				08/01/22				2,614,000
	10,000			Triborough Bridge & Tunnel Authority, Refg 2002 E (MBIA Insd) (a)			5.25				11/15/22				10,399,150
															53,061,056
				North Carolina (3.0%)
	6,000			North Carolina Municipal Power Agency #1, Catawba Ser 2003 (MBIA Insd)			5.25				01/01/19				6,186,660
	3,000			University of North Carolina at Wilmington, Student Housing Ser 2005 COPs (FGIC Insd)			5.00				06/01/36				2,894,940
															9,081,600
				Ohio (0.5%)
	2,545			Cleveland Ohio Public Power System, Ser 2008 B-2 (MBIA Insd)			0.00				11/15/26				955,316
	1,720			Cleveland Ohio Public Power System, Ser 2008 B-2 (MBIA Insd)			0.00				11/15/28				570,937
															1,526,253
				Oregon (1.0%)
	3,000			Oregon Department of Administrative Services, COPs Ser 2005 B (FGIC Insd)			5.00				11/01/24				3,028,830
				Pennsylvania (6.1%)
	5,000			Allegheny County Hospital Development Authority, Pittsburgh Mercy Health Ser 1996 (AMBAC Insd) (ETM)			5.625				08/15/18				5,296,600
	2,000			Delaware County Industrial Development Authority, Aqua Inc Ser A 2005 (AMT) (FGIC Insd)			5.00				11/01/37				1,773,200
	4,110			Pennsylvania, First Ser 2003 (MBIA Insd)(a)			5.00				01/01/13	(d)			4,437,834
	1,450			Pennsylvania Turnpike Commission, Ser 2008 Subser A-1 (AGC Insd)			5.00				06/01/25				1,483,843
	5,000			Philadelphia, Water & Wastewater Ser 1998 (AMBAC Insd)			5.25				12/15/14				5,360,750
															18,352,227
				Rhode Island (3.7%)
	10,000			Rhode Island Depositors Economic Protection Corporation, Refg 1992 Ser B (MBIA Insd) (ETM)			6.00				08/01/17				10,936,300
				South Carolina (5.2%)
	1,500			Medical University Hospital Authority, FHA Insured Mtge Ser 2004 A (MBIA Insd)			5.25				02/15/25				1,527,915
	10,000			South Carolina Public Service Authority, Santee Cooper Ser 2003 A (AMBAC Insd) (a)			5.00				01/01/27				10,142,325
	4,000			South Carolina Public Service Authority, Santee Cooper 2006 Ser A (MBIA Insd)			5.00				01/01/36				3,952,760
															15,623,000
				Texas (23.3%)
	3,020			Amarillo Health Facilities Corporation, Baptist St Anthony’s Hospital Ser 1998 (FSA Insd)			5.50				01/01/16				3,273,861
	5,075			Amarillo Health Facilities Corporation, Baptist St Anthony’s Hospital Ser 1998 (FSA Insd)			5.50				01/01/17				5,497,341
	9,000			Dallas-Fort Worth International Airport, Ser 2003 A (AMT) (FSA Insd) (a)			5.375				11/01/22				9,003,502
	1,000			Friendswood Independent School District, Ser 2008 (PSF Insd)			5.00				02/15/27				1,018,210
	2,160			Harris County Health Facilities Development Corp, Thermal Utility Ser 2008 (AGC Insd)			5.25				11/15/24				2,246,940
	15,000			Houston, Combined Utility First Lien Refg 2004 Ser A (FGIC Insd)			5.25				05/15/23				15,215,400
	4,000			Houston, Public Impr & Refg Ser 2001 B (FSA Insd)			5.50				03/01/17				4,239,200
	1,175			Houston Community College System, Sr Lien Student Fee Ser 2008 (FSA Insd)			5.00				04/15/25				1,204,904
	330			Houston Community College System, Sr Lien Student Fee Ser 2008 (FSA Insd)			5.00				04/15/26				337,105
	3,975			Houston Hotel Occupancy, Capital Appreciation Ser 2001 B (FSA Insd)			0.00				09/01/26				1,498,018
	1,550			Humble Independent School District, Unlimited Tax School Building Ser 2008A (AGC Insd)			5.00				02/15/25				1,585,386
	8,200			North Texas Tollway Authority, First Tier Capital Appreciation Refg Ser 2008D (AGC Insd)			0.00				01/01/28				2,631,544
	8,575			Lower Colorado River Authority, Refg Ser 1999 A (MBIA Insd)			5.00				05/15/31				8,448,177
	5,000			Lower Colorado River Authority, Refg Ser 2001 A (FSA Insd)			5.00				05/15/26				5,035,850
	3,000			San Antonio, Water & Refg Ser 2002 A (FSA Insd)			5.00				05/15/32				2,999,760
	4,000			Texas Turnpike Authority, Central Texas Ser 2002 A (AMBAC Insd)			5.50				08/15/39				4,063,480
	1,510			Victoria Independent School District, Unlimited Tax School Building Ser 2008 (PSF Insd)			5.00				02/15/24				1,558,546
															69,857,224

PRINCIPAL
AMOUNT IN						COUPON				MATURITY
THOUSANDS						RATE				DATE				VALUE
				Utah (1.7%)
	5,000			Intermountain Power Agency, Utah, 2003 Ser A (FSA Insd)			5.00				07/01/21				5,143,400
				Virginia (1.0%)
	3,000			Richmond Metropolitan Authority, Refg Ser 2002 (FGIC Insd)			5.25				07/15/22				3,128,940
				Washington (11.9%)
	6,000			Cowlitz County, Public Utility District # 1, Production Ser 2006 (MBIA Insd)			5.00				09/01/31				5,879,040
	5,000			King County, Sewer Refg 2001 (FGIC Insd)			5.00				01/01/31				5,012,249
	8,025			Port of Seattle, Passenger Facility Ser 1998 A (MBIA Insd)(a)			5.00				12/01/23				8,045,464
	5,000			Port of Seattle, Ser 2001 B (AMT) (MBIA Insd)			5.625				02/01/24				5,011,700
	2,890			Seattle, Water Refg 2003 (MBIA Insd)			5.00				09/01/20				2,976,729
	2,870			Seattle, Water Refg 2003 (MBIA Insd)			5.00				09/01/23				2,941,004
	2,500			Spokane School District #81, Ser 2005 (MBIA Insd)			0.00	(e)			12/01/23				2,505,875
	4,300			Washington State Motor Vehicle Fuel Tax, Ser 2004F (AMBAC Insd)			0.00				12/01/29				1,379,741
	2,000			Washington State Health Care Facilities Authority, Kadlec Medical Center Ser 2006 A (AGC Insd)			5.00				12/01/30				1,976,000
															35,727,802
				West Virginia (1.0%)
	2,900			West Virginia Water Development Authority, Loan Program II Refg Ser 2003 B (AMBAC Insd)			5.25				11/01/23				2,999,586
				Total Tax-Exempt Municipal Bonds (Cost $457,415,124)											451,966,629

NUMBER OF

SHARES (000)

Short-Term Investment (f) (6.7%)

Investment Company

20,182

Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class (Cost $20,181,912)

20,181,912

Total Investments (Cost $477,597,036)

472,148,541

PRINCIPAL
AMOUNT IN
THOUSANDS
				Floating Rate Note Obligations Related to Securities Held (-20.6%)
	(61,885	)		Notes with interest rates ranging from 1.51% to 2.59% at July 31, 2008 and contractual maturities of collateral ranging from 01/01/13 to 10/01/37 (g) (Cost $(61,885,000))							(61,885,000	)
				Total Net Investments (Cost $415,712,036) (h) (i)			137.0	%			410,263,541
				Other Assets in Excess of Liabilites			(1.3	)			3,903,637
				Preferred Shares of Beneficial Interest			(38.3	)			(114,700,000	)
				Net Assets Applicable to Common Shareholders			100.0	%			299,467,178

FUTURES CONTRACTS OPEN AT JULY 31, 2008

										UNREALIZED
NUMBER OF				DESCRIPTION, DELIVERY		UNDERLYING FACE				APPRECIATION
CONTRACTS		LONG/SHORT		MONTH AND YEAR		AMOUNT AT VALUE				(DEPRECIATION)
510		Long		U.S. Treasury Notes 10 Year September 2008		$	58,562,346			$	481,819
815		Long		Swap Future 5 Year September 2008			87,905,395				308,417
505		Short		U.S. Treasury Notes 5 Year September 2008			(56,224,650	)			(400,708	)
9		Short		U.S. Treasury Notes 10 Year September 2008			(954,000	)			(7,333	)
271		Short		U.S. Treasury Bonds 20 Year September 2008			(31,300,500	)			(388,093	)
362		Short		Swap Future 10 Year September 2008			(39,853,938	)			(326,759	)
				Net Unrealized Depreciation							($307,550	)

INTEREST RATE SWAP CONTRACTS OPEN AT JULY 31, 2008:

UNREALIZED

NOTIONAL

PAYMENTS

PAYMENTS

TERMINATION

APPRECIATION

COUNTERPARTY

AMOUNT (000)

RECEIVED BY FUND

MADE BY FUND

DATE

(DEPRECIATION)

JPMorgan Chase Bank N.A.

$

20,780

Fixed Rate 5.385%

Floating Rate 0.00%

@

February 14, 2018

$

88,523

Bank of America N.A.

4,690

Fixed Rate 5.58

Floating Rate 0.00

@

February 28, 2018

52,153

Bank of America N.A.

5,890

Fixed Rate 5.070

Floating Rate 0.00

@

April 14, 2018

(46,237

)

Bank of America N.A.

5,870

Fixed Rate 4.982

Floating Rate 0.00

@

April 15, 2018

(64,453

)

Merrill Lynch & Co.

7,830

Fixed Rate 5.00

Floating Rate 0.00

@

April 15, 2018

(81,119

)

JPMorgan Chase Bank N.A.

26,460

Floating Rate 0.00

@

Fixed Rate 5.831

February 14, 2023

(221,470

)

Bank of America N.A.

5,901

Floating Rate 0.00

@

Fixed Rate 5.99

February 28, 2023

(75,179

)

Bank of America N.A.

7,535

Floating Rate 0.00

@

Fixed Rate 5.47

April 14, 2023

11,604

Bank of America N.A.

7,165

Floating Rate 0.00

@

Fixed Rate 5.38

April 15, 2023

28,660

Merrill Lynch & Co.

10,065

Floating Rate 0.00

@

Fixed Rate 5.395

April 15, 2023

36,133

Net Unrealized Depreciation

($271,384

)

Item 2. Controls and Procedures.

(a) The Trust’s principal executive officer and principal financial officer have concluded that the Trust’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the Trust’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Item 3. Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Insured Municipal Income Trust
/s/ Randy Takian   Randy Takian
Principal Executive Officer
September 18, 2008

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Randy Takian   Randy Takian
Principal Executive Officer
September 18, 2008
/s/ Francis Smith   Francis Smith
Principal Financial Officer
September 18, 2008