Morgan Stanley Institutional Liquidity Funds

1 The section of each portfolio s prospectus entitled Shareholder Information Pricing of portfolio Shares ishereby deleted and replaced with the following:Pricing of portfolio SharesShares of the Portfolios may be purchased or sold (redeemed) at the NAV next determined after theFund receives your order in good order and State Street Bank and Trust Company (the Custodian )receives monies credited by a Federal Reserve Bank ( Federal Funds ) prior to the close of the Fedwire. You begin earning dividends the same day your Institutional Class shares are purchased providedthe Fund receives your purchase amount in Federal Funds that day as set forth above. Orders topurchase shares of a portfolio must be received by the Fund prior to the following times: for the PrimePortfolio, Government portfolio and Treasury portfolio 5:00 Eastern time; for the GovernmentSecurities portfolio and Treasury Securities portfolio 3:00 Eastern time; and for the Tax-ExemptPortfolio 2:00 Eastern time.

2 On any business day that the NYSE closes early, or when SIFMA recommends that the securities markets close early, the Fund may close early and purchase ordersreceived after such earlier closing times will be processed the following business day. If the NYSE isclosed due to inclement weather, technology problems or any other reason on a day it would normallybe open for business, or the NYSE has an unscheduled early closing on a day it has opened for business,the portfolio reserves the right to treat such day as a business day and accept purchase and redemptionorders until, and calculate its NAV as of, the normally scheduled close of regular trading on the NYSEfor that day, or such time noted above, so long as the Adviser believes there generally remains anadequate market to obtain reliable and accurate market quotations. The Fund may elect to remainopen on days when the NYSE is closed or closes early but on which SIFMA recommends that thebond markets remain open for all or part of the day.

3 Purchase orders received by the Fund and notfunded by 6:00 on the trade date may be subject to an overdraft Stanley Institutional Liquidity FundsSupplement datedDecember 7, 2015 tothe Morgan StanleyInstitutional LiquidityFunds Prospectusesdated February 27,2015 Money MarketPortfolioPrime PortfolioGovernmentPortfolioGovernmentSe curities PortfolioTreasury PortfolioTreasury SecuritiesPortfolio Tax-ExemptPortfolio (each, a portfolio ) prospectus SupplementDecember 7, 2015 Please retain this supplement for future reference. LFMMSPT-1215 Merrill Corp - MS Institutional Liquidity Fund Supplement N-1A 333-104972 12-31-2015 ED | pweakly | 04-Dec-15 18:44 | | Sequence: 1 CHKSUM Content: 41639 Layout: 4722 Graphics: No GraphicsCLEANJOB: 15-24539-1 CYCLE#;BL#: 2.

4 0 TRIM: " x " AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~note-color 2 GRAPHICS: none MANAGEMENT Ticker Fund SymbolPrime portfolio MPFXXG overnment portfolio MVRXXG overnment Securities portfolio MUIXXT reasury portfolio MISXXT reasury Securities portfolio MSUXXTax-Exempt portfolio MTXXXThe Securities and Exchange Commission has not approved or disapproved these securities or passed upon theadequacy of this prospectus . Any representation to the contrary is a criminal : Go Paperless. It s faster, easier and up today at: not be available for all Stanley Institutional Liquidity FundsInstitutionalClass PortfoliosPrime PortfolioGovernment PortfolioGovernment Securities PortfolioTreasury PortfolioTreasury Securities PortfolioTax-Exempt PortfolioProspectusFebruary 27, 2015 Merrill Corp - MS MSILF Institutional Class prospectus [ Funds ] 02-28-2015 ED [AUX] | thunt | 24-Feb-15 10:54 | | Sequence: 1 CHKSUM Content: 13146 Layout: 4121 Graphics: 20811 CLEANJOB: 15-1185-2 CYCLE#;BL#: 6.

5 0 TRIM: " x " AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~note-color 2, ~note-color 3 GRAPHICS: , of Contents PagePortfolio SummaryPrime portfolio 1 Government portfolio 4 Government Securities portfolio 6 Treasury portfolio 8 Treasury Securities portfolio 10

6 Tax-Exempt portfolio 12 Details of the Portfolios 14 Prime portfolio 14 Government portfolio 16 Government Securities portfolio 18 Treasury portfolio 20 Treasury Securities portfolio 22 Tax-Exempt portfolio 23 Additional Information about the Portfolios Investment Strategies and Related Risks 25 Shareholder Information 29 Fund Management 35 Financial Highlights 36 Merrill Corp - MS MSILF Institutional Class prospectus [ Funds ] 02-28-2015 ED [AUX] | thunt | 24-Feb-15 10:54 | | Sequence: 2 CHKSUM Content: 44407 Layout: 25672 Graphics: No GraphicsCLEANJOB: 15-1185-2 CYCLE#;BL#: 6.

7 0 TRIM: " x " AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~note-color 2 GRAPHICS: none Prime portfolio seeks preservation of capital, dailyliquidity and maximum current and ExpensesThe table below describes the expenses that you may payif you buy and hold Institutional Class shares of thePortfolio. The portfolio does not charge any sales loads orother fees when you purchase or redeem portfolio Operating Expenses (expenses that youpay each year as a percentage of the value of your investment) Institutional ClassAdvisory Fee and/or Shareholder Service (12b-1) Fee N/AOther Expenses Annual portfolio Operating Expenses* Waiver and/or Expense Reimbursement* Annual portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement* example below is intended to help you compare thecost of investing in the portfolio s Institutional Class withthe cost of investing in other mutual example assumes that you invest $10,000 in thePortfolio s Institutional Class, your investment has a 5%return each year and that the portfolio s operatingexpenses remain the same.

8 Although your actual costsmay be higher or lower, based on these assumptions yourcosts would be: 1 Year 3 Years 5 Years 10 YearsInstitutional Class $20 $64 $113 $255* The portfolio s Adviser and Administrator, Morgan StanleyInvestment Management Inc., has agreed to reduce itsadvisory fee, its administration fee and/or reimburse thePortfolio s Institutional Class so that Total Annual PortfolioOperating Expenses, excluding certain investment relatedexpenses, taxes, interest and other extraordinary expenses(including litigation), will not exceed The fee waiversand/or expense reimbursements will continue for at least oneyear or until such time as the Fund s Board of Trustees actsto discontinue all or a portion of such waivers and/orreimbursements when it deems such action is Investment StrategiesThe portfolio seeks to maintain a stable net asset value of$ per share by investing in liquid, high quality money market instruments of foreign financial corporations and non-financialcorporations.

9 The portfolio also invests in obligationsissued or guaranteed by the Government and itsagencies and instrumentalities. The portfolio s money mar-ket investments may include commercial paper, corporate debt obligations, debt obligations (includingcertificates of deposit and promissory notes) of or foreign banks, or of branches or sub-sidiaries of foreign banks, or foreign branches of (such as Yankee obligations), certificates of depositof savings banks and savings and loan organizations,asset-backed securities, repurchase agreements andmunicipal portfolio may also invest in dollar-denominatedforeign securities and money market RisksThere can be no assurance that the portfolio will achieveits investment objective. Although the portfolio seeks topreserve the value of your investment at $ per share,it is possible for an investor to lose money by investing inthe portfolio . The risks of investing in the Portfolioinclude: Credit and Interest Rate risk refers tothe possibility that the issuer or guarantor of a securi-ty will be unable to make interest payments and/orrepay the principal on its debt.

10 Interest rate risk refersto fluctuations in the value of a debt security resultingfrom changes in the general level of interest rates. Thehistorically low interest rate environment increases therisk associated with rising interest rates. The Portfoliomay face a heightened level of risk, especially since theFederal Reserve Board has ended its quantitative eas-ing program and may begin to raise rates. Bank activities of and mostforeign banks are subject to comprehensive regula-tions. The enactment of new legislation or regula-tions, as well as changes in interpretation andenforcement of current laws, may affect the mannerof operations and profitability of domestic and for-eign banks. In addition, banks may be particularlysusceptible to certain economic factors. Government governmentsecurities in which the portfolio invests can be subjectto two types of risk: credit risk and interest rate the general level of interest rates goes up, theprices of most fixed-income securities go the general level of interest rates goes down,the prices of most fixed-income securities go up.