N-CSRS 1 main.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811- 3329

Variable Insurance Products Fund
 (Exact name of registrant as specified in charter)

82 Devonshire St., Boston, Massachusetts 02109
 (Address of principal executive offices) (Zip code)

Eric D. Roiter, Secretary

82 Devonshire St.

Boston, Massachusetts 02109
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:

December 31

Date of reporting period:

June 30, 2004

Item 1. Reports to Stockholders

Fidelity® Variable Insurance Products:

Equity-Income Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

9

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

13

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines call 1-800-221-5207, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

Equity-Income Portfolio

Fidelity Variable Insurance Products: Equity-Income Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004

% of fund's net assets

Bank of America Corp.

3.0

Exxon Mobil Corp.

2.9

Citigroup, Inc.

2.7

American International Group, Inc.

2.6

Fannie Mae

1.9

13.1

Top Five Market Sectors as of June 30, 2004

% of fund's net assets

Financials

30.2

Industrials

12.6

Consumer Discretionary

10.9

Energy

10.9

Health Care

8.0

Asset Allocation as of June 30, 2004

% of fund's net assets*

Stocks

99.2%

Bonds

0.6%

Short-Term
Investments and
Net Other Assets

0.2%

* Foreign investments

12.0%



Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 97.9%

Shares

Value
(Note 1)

CONSUMER DISCRETIONARY - 10.3%

Auto Components - 0.1%

TRW Automotive Holdings Corp.

611,370

$ 11,524,325

Automobiles - 0.5%

DaimlerChrysler AG

385,800

18,159,606

Toyota Motor Corp. ADR

475,900

38,842,958

57,002,564

Hotels, Restaurants & Leisure - 1.3%

Caesars Entertainment, Inc. (a)

2,730,500

40,957,500

McDonald's Corp.

2,561,300

66,593,800

MGM MIRAGE (a)

446,670

20,966,690

Six Flags, Inc. (a)

1,408,356

10,224,665

138,742,655

Household Durables - 1.0%

LG Electronics, Inc.

237,410

11,269,009

Maytag Corp.

687,020

16,838,860

Newell Rubbermaid, Inc.

1,763,100

41,432,850

Sony Corp. sponsored ADR

587,200

22,342,960

Whirlpool Corp.

128,200

8,794,520

100,678,199

Media - 5.3%

Clear Channel Communications, Inc.

2,650,100

97,921,195

Comcast Corp. Class A (a)

2,852,091

79,944,111

Liberty Media Corp. Class A (a)

3,755,576

33,762,628

Liberty Media International, Inc.
Class A (a)

187,778

6,966,564

The Reader's Digest Association, Inc. (non-vtg.)

1,243,903

19,890,009

Time Warner, Inc. (a)

7,114,850

125,079,063

Viacom, Inc. Class B (non-vtg.)

3,377,818

120,655,659

Vivendi Universal SA sponsored ADR (a)

1,039,500

29,002,050

Walt Disney Co.

1,993,500

50,814,315

564,035,594

Multiline Retail - 0.3%

Big Lots, Inc. (a)

1,141,556

16,506,903

Sears, Roebuck & Co.

452,700

17,093,952

33,600,855

Specialty Retail - 1.6%

Abercrombie & Fitch Co. Class A

979,400

37,951,750

American Eagle Outfitters, Inc. (a)

626,000

18,097,660

Gap, Inc.

1,541,200

37,374,100

Limited Brands, Inc.

2,197,300

41,089,510

Office Depot, Inc. (a)

813,000

14,560,830

Toys 'R' Us, Inc. (a)

1,295,900

20,643,687

169,717,537

Textiles Apparel & Luxury Goods - 0.2%

Liz Claiborne, Inc.

632,940

22,773,181

TOTAL CONSUMER DISCRETIONARY

1,098,074,910

Shares

Value
(Note 1)

CONSUMER STAPLES - 6.1%

Beverages - 0.4%

Anheuser-Busch Companies, Inc.

844,800

$ 45,619,200

Food & Staples Retailing - 0.7%

Albertsons, Inc.

442,100

11,733,334

CVS Corp.

1,469,900

61,765,198

73,498,532

Food Products - 1.2%

Campbell Soup Co.

612,900

16,474,752

Fresh Del Monte Produce, Inc.

242,988

6,140,307

H.J. Heinz Co.

281,120

11,019,904

Hormel Foods Corp.

186,000

5,784,600

Interstate Bakeries Corp.

563,995

6,119,346

Kellogg Co.

194,900

8,156,565

Kraft Foods, Inc. Class A

943,100

29,877,408

Unilever PLC sponsored ADR

1,307,000

51,979,390

135,552,272

Household Products - 2.1%

Colgate-Palmolive Co.

1,705,300

99,674,785

Kimberly-Clark Corp.

1,273,400

83,891,592

Procter & Gamble Co.

710,400

38,674,176

222,240,553

Personal Products - 0.9%

Gillette Co.

2,332,620

98,903,088

Tobacco - 0.8%

Altria Group, Inc.

1,562,800

78,218,140

Loews Corp. - Carolina Group

171,550

4,211,553

82,429,693

TOTAL CONSUMER STAPLES

658,243,338

ENERGY - 10.9%

Energy Equipment & Services - 2.5%

Baker Hughes, Inc.

1,538,300

57,916,995

BJ Services Co. (a)

570,145

26,135,447

Halliburton Co.

583,400

17,653,684

Noble Corp. (a)

930,100

35,241,489

Schlumberger Ltd. (NY Shares)

1,996,600

126,804,066

263,751,681

Oil & Gas - 8.4%

Apache Corp.

647,780

28,210,819

BP PLC sponsored ADR

2,491,842

133,487,976

ChevronTexaco Corp.

1,270,071

119,526,382

Exxon Mobil Corp.

7,103,336

315,459,152

Royal Dutch Petroleum Co.
(NY Shares)

1,143,000

59,058,810

Common Stocks - continued

Shares

Value
(Note 1)

ENERGY - continued

Oil & Gas - continued

Total SA:

Series B

391,400

$ 75,211,424

sponsored ADR

1,697,996

163,143,456

YUKOS Corp. sponsored ADR

248,400

7,899,120

901,997,139

TOTAL ENERGY

1,165,748,820

FINANCIALS - 29.5%

Capital Markets - 6.0%

Bank of New York Co., Inc.

3,223,100

95,016,988

Charles Schwab Corp.

6,391,400

61,421,354

Credit Suisse Group sponsored ADR

735,200

26,327,512

J.P. Morgan Chase & Co.

3,654,550

141,686,904

Janus Capital Group, Inc.

2,332,400

38,461,276

LaBranche & Co., Inc.

517,900

4,360,718

Mellon Financial Corp.

1,716,500

50,344,945

Merrill Lynch & Co., Inc.

1,674,300

90,378,714

Morgan Stanley

2,066,900

109,070,313

Nomura Holdings, Inc.

1,853,000

27,702,350

644,771,074

Commercial Banks - 8.6%

Bank of America Corp.

3,827,984

323,923,982

Bank One Corp.

2,714,138

138,421,038

Banknorth Group, Inc.

339,400

11,023,712

Comerica, Inc.

730,200

40,073,376

Huntington Bancshares, Inc.

387,200

8,866,880

Lloyds TSB Group PLC

2,282,400

17,928,844

PNC Financial Services Group, Inc.

226,500

12,022,620

Royal Bank of Scotland Group PLC

325,447

9,402,838

State Bank of India

463,175

4,544,908

Sumitomo Mitsui Financial Group, Inc.

5,917

41,156,180

U.S. Bancorp, Delaware

2,754,538

75,915,067

Wachovia Corp.

2,359,675

105,005,538

Wells Fargo & Co.

2,243,800

128,412,674

916,697,657

Consumer Finance - 1.2%

American Express Co.

1,687,496

86,703,544

MBNA Corp.

1,456,400

37,560,556

124,264,100

Diversified Financial Services - 3.1%

CIT Group, Inc.

1,191,400

45,618,706

Citigroup, Inc.

6,273,619

291,723,284

337,341,990

Insurance - 7.7%

ACE Ltd.

2,113,415

89,355,186

Allianz AG sponsored ADR

567,200

6,210,840

Allstate Corp.

2,488,000

115,816,400

American International Group, Inc.

3,964,650

282,600,252

Shares

Value
(Note 1)

Assurant, Inc.

274,700

$ 7,246,586

Conseco, Inc. (a)

672,100

13,374,790

Fondiaria-Sai Spa

541,144

12,088,179

Genworth Financial, Inc. Class A

1,295,800

29,738,610

Hartford Financial Services Group, Inc.

1,334,400

91,726,656

Marsh & McLennan Companies, Inc.

368,000

16,699,840

Muenchener Rueckversicherungs-Gesellschaft AG (Reg.)

123,914

13,465,283

Old Republic International Corp.

530,996

12,595,225

St. Paul Travelers Companies, Inc.

2,029,026

82,256,714

The Chubb Corp.

634,000

43,226,120

UnumProvident Corp.

680,100

10,813,590

827,214,271

Real Estate - 0.1%

CarrAmerica Realty Corp.

193,740

5,856,760

Thrifts & Mortgage Finance - 2.8%

Fannie Mae

2,926,100

208,806,496

Freddie Mac

717,900

45,443,070

Housing Development Finance Corp. Ltd.

1,133,500

12,748,947

MGIC Investment Corp.

218,200

16,552,652

Sovereign Bancorp, Inc.

864,250

19,099,925

302,651,090

TOTAL FINANCIALS

3,158,796,942

HEALTH CARE - 7.9%

Health Care Equipment & Supplies - 1.1%

Baxter International, Inc.

3,196,100

110,297,411

Hospira, Inc. (a)

85,700

2,365,320

112,662,731

Health Care Providers & Services - 1.2%

Cardinal Health, Inc.

463,900

32,496,195

Community Health Systems, Inc. (a)

254,100

6,802,257

HCA, Inc.

204,800

8,517,632

IMS Health, Inc.

102,999

2,414,297

McKesson Corp.

1,062,800

36,485,924

Tenet Healthcare Corp. (a)

2,188,900

29,353,149

UnitedHealth Group, Inc.

247,800

15,425,550

Wellcare Group, Inc.

6,800

115,600

131,610,604

Pharmaceuticals - 5.6%

Abbott Laboratories

857,000

34,931,320

Bristol-Myers Squibb Co.

2,517,500

61,678,750

GlaxoSmithKline PLC sponsored ADR

467,000

19,361,820

Johnson & Johnson

2,187,200

121,827,040

Merck & Co., Inc.

2,851,900

135,465,250

Pfizer, Inc.

2,939,200

100,755,776

Roche Holding AG (participation certificate)

53,880

5,347,463

Common Stocks - continued

Shares

Value
(Note 1)

HEALTH CARE - continued

Pharmaceuticals - continued

Schering-Plough Corp.

3,803,630

$ 70,291,082

Wyeth

1,436,600

51,947,456

601,605,957

TOTAL HEALTH CARE

845,879,292

INDUSTRIALS - 12.6%

Aerospace & Defense - 4.0%

Bombardier, Inc. Class B (sub. vtg.)

4,147,900

12,500,606

EADS NV

1,540,015

42,973,268

Honeywell International, Inc.

3,094,325

113,345,125

Lockheed Martin Corp.

1,439,400

74,963,952

Northrop Grumman Corp.

903,000

48,491,100

Raytheon Co.

1,286,678

46,024,472

The Boeing Co.

997,800

50,977,602

United Technologies Corp.

379,520

34,718,490

423,994,615

Air Freight & Logistics - 0.1%

Ryder System, Inc.

204,900

8,210,343

Airlines - 0.2%

Southwest Airlines Co.

968,800

16,246,776

Building Products - 0.0%

Masco Corp.

162,300

5,060,514

Commercial Services & Supplies - 0.6%

Viad Corp.

1,061,700

28,676,517

Waste Management, Inc.

1,286,100

39,418,965

68,095,482

Construction & Engineering - 0.2%

Fluor Corp.

368,900

17,585,463

Electrical Equipment - 0.3%

Emerson Electric Co.

550,200

34,965,210

Industrial Conglomerates - 3.5%

3M Co.

342,400

30,819,424

General Electric Co.

3,503,340

113,508,216

Hutchison Whampoa Ltd.

2,602,000

17,764,109

Siemens AG sponsored ADR

248,700

18,035,724

Textron, Inc.

879,800

52,216,130

Tyco International Ltd.

4,230,746

140,206,922

372,550,525

Machinery - 2.8%

Caterpillar, Inc.

575,500

45,717,720

Deere & Co.

394,050

27,638,667

Dover Corp.

410,600

17,286,260

Eaton Corp.

497,400

32,201,676

Illinois Tool Works, Inc.

210,000

20,136,900

Ingersoll-Rand Co. Ltd. Class A

1,114,344

76,120,839

Navistar International Corp. (a)

373,600

14,480,736

Parker Hannifin Corp.

289,700

17,225,562

Shares

Value
(Note 1)

SPX Corp.

851,600

$ 39,548,304

Timken Co.

452,600

11,989,374

302,346,038

Road & Rail - 0.9%

Burlington Northern Santa Fe Corp.

1,504,600

52,766,322

Union Pacific Corp.

807,900

48,029,655

100,795,977

TOTAL INDUSTRIALS

1,349,850,943

INFORMATION TECHNOLOGY - 6.3%

Communications Equipment - 0.7%

Lucent Technologies, Inc. (a)

4,816,600

18,206,748

Motorola, Inc.

2,422,900

44,217,925

Nokia Corp. sponsored ADR

1,077,800

15,671,212

78,095,885

Computers & Peripherals - 1.7%

Hewlett-Packard Co.

4,681,211

98,773,552

International Business Machines Corp.

640,900

56,495,335

Storage Technology Corp. (a)

380,210

11,026,090

Sun Microsystems, Inc. (a)

3,998,675

17,354,250

183,649,227

Electronic Equipment & Instruments - 1.2%

Arrow Electronics, Inc. (a)

729,200

19,557,144

Avnet, Inc. (a)

1,328,830

30,164,441

PerkinElmer, Inc.

591,300

11,849,652

Solectron Corp. (a)

5,152,100

33,334,087

Thermo Electron Corp. (a)

1,155,100

35,507,774

130,413,098

IT Services - 0.2%

Ceridian Corp. (a)

780,800

17,568,000

Office Electronics - 0.3%

Xerox Corp. (a)

1,881,900

27,287,550

Semiconductors & Semiconductor Equipment - 1.2%

Intel Corp.

2,085,300

57,554,280

Micron Technology, Inc. (a)

1,866,200

28,571,522

Rohm Co. Ltd.

148,300

18,010,104

Samsung Electronics Co. Ltd.

65,630

27,116,081

131,251,987

Software - 1.0%

Microsoft Corp.

3,821,200

109,133,472

TOTAL INFORMATION TECHNOLOGY

677,399,219

MATERIALS - 6.8%

Chemicals - 2.8%

Arch Chemicals, Inc.

475,400

13,701,028

Dow Chemical Co.

2,294,100

93,369,870

Eastman Chemical Co.

476,800

22,042,464

Ferro Corp.

519,200

13,852,256

Great Lakes Chemical Corp.

650,500

17,602,530

Common Stocks - continued

Shares

Value
(Note 1)

MATERIALS - continued

Chemicals - continued

Hercules Trust II unit

15,700

$ 12,497,985

Lyondell Chemical Co.

1,389,900

24,170,361

Millennium Chemicals, Inc.

929,150

16,092,878

Olin Corp.

828,000

14,589,360

PolyOne Corp. (a)

1,239,100

9,218,904

PPG Industries, Inc.

390,300

24,389,847

Praxair, Inc.

1,023,124

40,832,879

302,360,362

Containers & Packaging - 0.5%

Smurfit-Stone Container Corp. (a)

2,375,253

47,386,297

Metals & Mining - 2.0%

Alcan, Inc.

955,100

39,524,342

Alcoa, Inc.

2,921,916

96,510,885

Freeport-McMoRan Copper & Gold, Inc. Class B

820,704

27,206,338

Phelps Dodge Corp.

702,200

54,427,522

217,669,087

Paper & Forest Products - 1.5%

Bowater, Inc.

391,300

16,274,167

Georgia-Pacific Corp.

1,562,701

57,788,683

International Paper Co.

645,400

28,849,380

Weyerhaeuser Co.

876,100

55,299,432

158,211,662

TOTAL MATERIALS

725,627,408

TELECOMMUNICATION SERVICES - 4.5%

Diversified Telecommunication Services - 4.3%

BellSouth Corp.

5,200,199

136,349,218

Qwest Communications International, Inc. (a)

2,296,400

8,244,076

SBC Communications, Inc.

6,680,993

162,014,080

Verizon Communications, Inc.

4,242,902

153,550,623

460,157,997

Wireless Telecommunication Services - 0.2%

KDDI Corp.

3,028

17,570,024

TOTAL TELECOMMUNICATION SERVICES

477,728,021

UTILITIES - 3.0%

Electric Utilities - 1.8%

Entergy Corp.

796,700

44,623,167

FirstEnergy Corp.

1,127,400

42,176,034

PG&E Corp. (a)

403,800

11,282,172

TXU Corp.

1,234,820

50,022,558

Wisconsin Energy Corp.

1,293,700

42,187,557

190,291,488

Gas Utilities - 0.1%

NiSource, Inc.

568,729

11,727,192

Shares

Value
(Note 1)

Multi-Utilities & Unregulated Power - 1.1%

Dominion Resources, Inc.

1,174,600

$ 74,093,768

Public Service Enterprise Group, Inc.

594,000

23,777,820

SCANA Corp.

617,300

22,451,201

120,322,789

TOTAL UTILITIES

322,341,469

TOTAL COMMON STOCKS

(Cost $8,302,170,555)

10,479,690,362

Convertible Preferred Stocks - 1.3%

CONSUMER DISCRETIONARY - 0.2%

Automobiles - 0.1%

General Motors Corp.:

Series B, 5.25%

412,200

10,090,656

Series C, 6.25%

253,100

7,314,590

17,405,246

Hotels, Restaurants & Leisure - 0.1%

Six Flags, Inc. 7.25% PIERS

388,400

8,641,900

TOTAL CONSUMER DISCRETIONARY

26,047,146

FINANCIALS - 0.5%

Capital Markets - 0.0%

State Street Corp. 6.75%

24,900

5,688,305

Consumer Finance - 0.2%

Ford Motor Co. Capital Trust II 6.50%

461,500

25,206,207

Insurance - 0.3%

Conseco, Inc. Series B, 5.50%

143,400

3,857,460

The Chubb Corp.:

7.00%

167,700

4,623,992

Series B, 7.00%

120,100

3,355,594

Travelers Property Casualty Corp. 4.50%

240,200

5,670,401

XL Capital Ltd. 6.50%

401,800

10,151,879

27,659,326

TOTAL FINANCIALS

58,553,838

HEALTH CARE - 0.1%

Health Care Equipment & Supplies - 0.1%

Baxter International, Inc. 7.00%

156,900

8,935,455

INFORMATION TECHNOLOGY - 0.4%

Communications Equipment - 0.2%

Motorola, Inc. 7.00%

399,700

19,685,225

Office Electronics - 0.2%

Xerox Corp. Series C, 6.25%

145,650

19,166,666

TOTAL INFORMATION TECHNOLOGY

38,851,891

Convertible Preferred Stocks - continued

Shares

Value
(Note 1)

UTILITIES - 0.1%

Electric Utilities - 0.1%

TXU Corp. 8.75%

226,400

$ 10,725,700

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $137,257,376)

143,114,030

Corporate Bonds - 0.6%

Principal
Amount

Convertible Bonds - 0.6%

CONSUMER DISCRETIONARY - 0.4%

Hotels, Restaurants & Leisure - 0.1%

Royal Caribbean Cruises Ltd. liquid yield option note 0% 2/2/21

$ 11,239,000

6,019,946

Media - 0.2%

Liberty Media Corp.3.5% 1/15/31 (c)

11,400,000

10,274,250

News America, Inc. liquid yield option note 0% 2/28/21 (c)

22,670,000

12,936,182

23,210,432

Specialty Retail - 0.1%

Gap, Inc. 5.75% 3/15/09

8,590,000

13,341,129

TOTAL CONSUMER DISCRETIONARY

42,571,507

FINANCIALS - 0.2%

Diversified Financial Services - 0.1%

Navistar Financial Corp. 4.75% 4/1/09 (c)

2,760,000

2,688,985

Tyco International Group SA yankee 3.125% 1/15/23

5,220,000

8,441,262

11,130,247

Insurance - 0.1%

Loews Corp. 3.125% 9/15/07

5,340,000

5,099,700

TOTAL FINANCIALS

16,229,947

INFORMATION TECHNOLOGY - 0.0%

Electronic Equipment & Instruments - 0.0%

Celestica, Inc. liquid yield option note 0% 8/1/20

620,000

343,325

TOTAL CONVERTIBLE BONDS

59,144,779

Nonconvertible Bonds - 0.0%

CONSUMER DISCRETIONARY - 0.0%

Media - 0.0%

XM Satellite Radio, Inc. 12% 6/15/10

60,000

67,800

TOTAL CORPORATE BONDS

(Cost $57,411,759)

59,212,579

Money Market Funds - 0.7%

Shares

Value
(Note 1)

Fidelity Cash Central Fund, 1.16% (b)

33,635,088

$ 33,635,088

Fidelity Securities Lending Cash Central Fund, 1.18% (b)

44,428,150

44,428,150

TOTAL MONEY MARKET FUNDS

(Cost $78,063,238)

78,063,238

TOTAL INVESTMENT
PORTFOLIO - 100.5%

(Cost $8,574,902,928)

10,760,080,209

NET OTHER ASSETS - (0.5)%

(57,548,792)

NET ASSETS - 100%

$ 10,702,531,417

Security Type Abbreviations

PIERS

-

Preferred Income Equity Redeemable Securities

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $25,899,417 or 0.2% of net assets.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,242,086,579 and $1,084,758,593, respectively.

The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $74,321 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $6,828,300. The weighted average interest rate was 1.15%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America

88.0%

France

2.5%

United Kingdom

2.2%

Japan

1.6%

Netherlands Antilles

1.2%

Netherlands

1.0%

Others (individually less than 1%)

3.5%

100.0%

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including securities loaned of $42,097,513) (cost $8,574,902,928) - See accompanying schedule

$ 10,760,080,209

Receivable for investments sold

16,571,487

Receivable for fund shares sold

3,272,928

Dividends receivable

13,561,803

Interest receivable

530,313

Prepaid expenses

21,868

Other affiliated receivables

39,347

Other receivables

242,788

Total assets

10,794,320,743

Liabilities

Payable for investments purchased

$ 24,444,091

Payable for fund shares redeemed

16,701,391

Accrued management fee

4,192,686

Distribution fees payable

326,420

Other affiliated payables

902,491

Other payables and accrued expenses

794,097

Collateral on securities loaned, at value

44,428,150

Total liabilities

91,789,326

Net Assets

$ 10,702,531,417

Net Assets consist of:

Paid in capital

$ 8,265,840,765

Undistributed net investment income

77,069,325

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

175,028,199

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

2,184,593,128

Net Assets

$ 10,702,531,417

Initial Class:
Net Asset Value, offering
price and redemption price per share ($8,427,364,611 ÷ 357,918,433 shares)

$ 23.55

Service Class:
Net Asset Value, offering
price and redemption price per share ($1,110,886,939 ÷ 47,322,784 shares)

$ 23.47

Service Class 2:
Net Asset Value, offering
price and redemption price per share ($1,160,353,958 ÷ 49,773,902 shares)

$ 23.31

Service Class 2R:
Net Asset Value, offering
price and redemption price per share ($3,925,909 ÷
168,876 shares)

$ 23.25

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 110,438,341

Interest

3,627,276

Security lending

670,300

Total income

114,735,917

Expenses

Management fee

$ 25,151,080

Transfer agent fees

3,482,831

Distribution fees

1,850,821

Accounting and security lending fees

701,194

Non-interested trustees' compensation

25,250

Appreciation in deferred trustee compensation account

26,206

Custodian fees and expenses

148,965

Registration fees

8,658

Audit

56,934

Legal

7,489

Interest

2,179

Miscellaneous

244,234

Total expenses before reductions

31,705,841

Expense reductions

(368,136)

31,337,705

Net investment income (loss)

83,398,212

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities

188,227,588

Foreign currency transactions

7,952

Total net realized gain (loss)

188,235,540

Change in net unrealized appreciation (depreciation) on:

Investment securities (net of decrease in deferred foreign taxes of $917,197)

86,942,512

Assets and liabilities in foreign currencies

(27,406)

Total change in net unrealized appreciation (depreciation)

86,915,106

Net gain (loss)

275,150,646

Net increase (decrease) in net assets resulting from operations

$ 358,548,858

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 83,398,212

$ 156,056,293

Net realized gain (loss)

188,235,540

162,136,844

Change in net unrealized appreciation (depreciation)

86,915,106

2,060,660,428

Net increase (decrease) in net assets resulting from operations

358,548,858

2,378,853,565

Distributions to shareholders from net investment income

(160,632,605)

(152,426,442)

Distributions to shareholders from net realized gain

(38,902,738)

-

Total distributions

(199,535,343)

(152,426,442)

Share transactions - net increase (decrease)

150,501,277

95,024,961

Redemption fees

5

6,803

Total increase (decrease) in net assets

309,514,797

2,321,458,887

Net Assets

Beginning of period

10,393,016,620

8,071,557,733

End of period (including undistributed net investment income of $77,069,325 and undistributed net investment income of $153,745,641, respectively)

$ 10,702,531,417

$ 10,393,016,620

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Service Class 2R

Shares

Sold

12,567,990

2,602,046

11,373,695

94,079

Reinvested

6,898,356

858,454

759,147

2,031

Redeemed

(24,003,533)

(2,508,390)

(2,287,876)

(9,756)

Net increase (decrease)

(4,537,187)

952,110

9,844,966

86,354

Dollars

Sold

$ 293,008,871

$ 60,477,287

$ 262,015,556

$ 2,159,963

Reinvested

161,766,458

20,079,239

17,642,584

47,062

Redeemed

(556,202,619)

(57,804,072)

(52,465,395)

(223,657)

Net increase (decrease)

$ (101,427,290)

$ 22,752,454

$ 227,192,745

$ 1,983,368

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Service Class 2R

Shares

Sold

32,080,268

11,240,469

21,169,436

138,968

Reinvested

7,869,268

847,723

452,997

1,082

Redeemed

(57,207,152)

(8,346,250)

(4,117,145)

(83,694)

Net increase (decrease)

(17,257,616)

3,741,942

17,505,288

56,356

Dollars

Sold

$ 628,858,276

$ 219,068,172

$ 416,030,936

$ 2,784,343

Reinvested

130,865,933

14,063,717

7,478,977

17,815

Redeemed

(1,083,344,265)

(159,436,339)

(79,803,985)

(1,558,619)

Net increase (decrease)

$ (323,620,056)

$ 73,695,550

$ 343,705,928

$ 1,243,539

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Service Class 2R

From net investment income

$ 130,573,823

$ 16,025,683

$ 13,995,319

$ 37,780

From net realized gain

31,192,635

4,053,555

3,647,265

9,283

Total

$ 161,766,458

$ 20,079,238

$ 17,642,584

$ 47,063

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Service Class 2R

From net investment income

$ 130,865,933

$ 14,063,717

$ 7,478,977

$ 17,815

From net realized gain

-

-

-

-

Total

$ 130,865,933

$ 14,063,717

$ 7,478,977

$ 17,815

See accompanying notes which are an integral part of the financial statements.

Equity-Income Portfolio

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 23.18

$ 18.16

$ 22.75

$ 25.52

$ 25.71

$ 25.42

Income from Investment Operations

Net investment income (loss) E

.19

.36

.34

.34

.40

.41

Net realized and unrealized gain (loss)

.63

5.01

(4.08)

(1.51)

1.46

1.10

Total from investment operations

.82

5.37

(3.74)

(1.17)

1.86

1.51

Distributions from net investment income

(.36)

(.35)

(.36)

(.42)

(.44)

(.38)

Distributions from net realized gain

(.09)

-

(.49)

(1.18)

(1.61)

(.84)

Total distributions

(.45)

(.35)

(.85)

(1.60)

(2.05)

(1.22)

Redemption fees added to paid in capital

E,G

- E,G

- E,G

-

-

-

Net asset value, end of period

$ 23.55

$ 23.18

$ 18.16

$ 22.75

$ 25.52

$ 25.71

Total Return B, C, D

3.53%

30.33%

(16.95)%

(4.96)%

8.42%

6.33%

Ratios to Average Net Assets F

Expenses before expense reductions

.56% A

.57%

.57%

.58%

.56%

.57%

Expenses net of voluntary waivers, if any

.56% A

.57%

.57%

.58%

.56%

.57%

Expenses net of all reductions

.56% A

.56%

.56%

.57%

.55%

.56%

Net investment income (loss)

1.61% A

1.83%

1.70%

1.47%

1.68%

1.57%

Supplemental Data

Net assets, end of period (000 omitted)

$ 8,427,365

$ 8,402,963

$ 6,895,940

$ 9,256,205

$ 9,969,086

$ 11,014,291

Portfolio turnover rate

21% A

26%

25%

24%

22%

27%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

G Amount represents less than $.01 per share.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 23.11

$ 18.10

$ 22.67

$ 25.45

$ 25.66

$ 25.39

Income from Investment Operations

Net investment income (loss) E

.17

.34

.32

.31

.37

.38

Net realized and unrealized gain (loss)

.62

5.00

(4.06)

(1.51)

1.46

1.11

Total from investment operations

.79

5.34

(3.74)

(1.20)

1.83

1.49

Distributions from net investment income

(.34)

(.33)

(.34)

(.40)

(.43)

(.38)

Distributions from net realized gain

(.09)

-

(.49)

(1.18)

(1.61)

(.84)

Total distributions

(.43)

(.33)

(.83)

(1.58)

(2.04)

(1.22)

Redemption fees added to paid in capital

- E,G

- E,G

- E,G

-

-

-

Net asset value, end of period

$ 23.47

$ 23.11

$ 18.10

$ 22.67

$ 25.45

$ 25.66

Total Return B, C, D

3.41%

30.22%

(17.00)%

(5.09)%

8.30%

6.25%

Ratios to Average Net Assets F

Expenses before expense reductions

.66% A

.67%

.67%

.68%

.66%

.67%

Expenses net of voluntary waivers, if any

.66% A

.67%

.67%

.68%

.66%

.67%

Expenses net of all reductions

.66% A

.66%

.66%

.67%

.65%

.66%

Net investment income (loss)

1.51% A

1.73%

1.60%

1.37%

1.58%

1.47%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,110,887

$ 1,071,483

$ 771,516

$ 836,017

$ 634,897

$ 437,332

Portfolio turnover rate

21% A

26%

25%

24%

22%

27%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

G Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 F

Selected Per-Share Data

Net asset value, beginning of period

$ 22.96

$ 18.00

$ 22.59

$ 25.41

$ 25.18

Income from Investment Operations

Net investment income (loss) E

.16

.31

.28

.27

.32

Net realized and unrealized gain (loss)

.61

4.97

(4.04)

(1.50)

1.95

Total from investment operations

.77

5.28

(3.76)

(1.23)

2.27

Distributions from net investment income

(.33)

(.32)

(.34)

(.41)

(.43)

Distributions from net realized gain

(.09)

-

(.49)

(1.18)

(1.61)

Total distributions

(.42)

(.32)

(.83)

(1.59)

(2.04)

Redemption fees added to paid in capital

- E,H

- E,H

- E,H

-

-

Net asset value, end of period

$ 23.31

$ 22.96

$ 18.00

$ 22.59

$ 25.41

Total Return B, C, D

3.34%

30.03%

(17.15)%

(5.23)%

10.19%

Ratios to Average Net Assets G

Expenses before expense reductions

.82% A

.82%

.83%

.84%

.83% A

Expenses net of voluntary waivers, if any

.82% A

.82%

.83%

.84%

.83% A

Expenses net of all reductions

.81% A

.81%

.82%

.83%

.82% A

Net investment income (loss)

1.36% A

1.58%

1.44%

1.21%

1.41% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,160,354

$ 916,679

$ 403,632

$ 226,078

$ 39,911

Portfolio turnover rate

21% A

26%

25%

24%

22%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 22.91

$ 17.99

$ 21.82

Income from Investment Operations

Net investment income (loss) E

.16

.31

.18

Net realized and unrealized gain (loss)

.62

4.96

(4.01)

Total from investment operations

.78

5.27

(3.83)

Distributions from net investment income

(.35)

(.35)

-

Distributions from net realized gain

(.09)

-

-

Total distributions

(.44)

(.35)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 23.25

$ 22.91

$ 17.99

Total Return B, C, D

3.39%

30.05%

(17.55)%

Ratios to Average Net Assets G

Expenses before expense reductions

.82% A

.82%

.85% A

Expenses net of voluntary waivers, if any

.82% A

.82%

.85% A

Expenses net of all reductions

.81% A

.81%

.84% A

Net investment income (loss)

1.36% A

1.57%

1.45% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 3,926

$ 1,891

$ 471

Portfolio turnover rate

21% A

26%

25%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

H Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Equity-Income Portfolio

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Equity-Income Portfolio (the fund) is a fund of Variable Insurance Products Fund (the trust) (referred to in this report as Fidelity Variable Insurance Products: Equity Income Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered nontaxable distributions or capital gain distributions for income tax purposes. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), prior period premium and discount on debt securities, market discount and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 2,704,753,289

|

Unrealized depreciation

(529,578,585)

Net unrealized appreciation (depreciation)

$ 2,175,174,704

Cost for federal income tax purposes

$ 8,584,905,505

Trading (Redemption) Fees. Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .48% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

Equity-Income Portfolio

4. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan - continued

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 549,203

|

Service Class 2

1,298,023

Service Class 2R

3,595

$ 1,850,821

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 2,767,209

|

Service Class

360,175

Service Class 2

354,461

Service Class 2R

986

$ 3,482,831

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $493,725 for the period.

Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $367,594 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $542.

8. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 11% of the total outstanding shares of the fund and two otherwise unaffiliated shareholders were the owners of record of 35% of the total outstanding shares of the fund.

Equity-Income Portfolio

Semiannual Report

Equity-Income Portfolio

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Adviser

FMR Co., Inc.

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

JPMorgan Chase Bank
New York, NY

VIPEI-SANN-0804
1.705693.106

Fidelity® Variable Insurance Products:

Growth Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

9

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

13

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines call 1-800-221-5207 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

Growth Portfolio

Fidelity Variable Insurance Products: Growth Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004

% of fund's net assets

Pfizer, Inc.

4.7

Microsoft Corp.

2.8

Cisco Systems, Inc.

2.8

Intel Corp.

2.1

Dell, Inc.

2.0

14.4

Top Five Market Sectors as of June 30, 2004

% of fund's net assets

Information Technology

38.3

Health Care

20.2

Consumer Discretionary

11.3

Financials

9.9

Industrials

7.7

Asset Allocation as of June 30, 2004

% of fund's net assets*

Stocks

98.2%

Short-Term
Investments and
Net Other Assets

1.8%

* Foreign investments

11.2%



Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.2%

Shares

Value
(Note 1)

CONSUMER DISCRETIONARY - 11.3%

Hotels, Restaurants & Leisure - 1.0%

Hilton Group PLC

1,860,741

$ 9,343,793

McDonald's Corp.

1,433,200

37,263,200

Rank Group PLC

2,796,306

15,262,797

Starbucks Corp. (a)

868,700

37,771,076

99,640,866

Internet & Catalog Retail - 1.1%

eBay, Inc. (a)

798,200

73,394,490

InterActiveCorp (a)

1,520,784

45,836,430

119,230,920

Media - 4.0%

E.W. Scripps Co. Class A

419,700

44,068,500

Fox Entertainment Group, Inc.
Class A (a)

1,889,900

50,460,330

Lamar Advertising Co. Class A (a)

1,208,100

52,371,135

News Corp. Ltd.:

ADR

574,500

20,348,790

sponsored ADR

328,861

10,812,950

Pixar (a)

447,812

31,127,412

SBS Broadcasting SA (a)

195,400

6,000,734

Time Warner, Inc. (a)

2,191,500

38,526,570

Univision Communications, Inc.
Class A (a)

1,734,200

55,373,006

Viacom, Inc. Class B (non-vtg.)

1,419,530

50,705,612

Walt Disney Co.

2,173,400

55,399,966

415,195,005

Multiline Retail - 0.7%

Nordstrom, Inc.

841,300

35,847,793

Saks, Inc.

2,452,800

36,792,000

72,639,793

Specialty Retail - 4.2%

Aeropostale, Inc. (a)

366,600

9,865,206

Best Buy Co., Inc.

1,757,600

89,180,624

Circuit City Stores, Inc.

3,081,400

39,904,130

Foot Locker, Inc.

471,480

11,475,823

Gap, Inc.

3,182,700

77,180,475

Home Depot, Inc.

4,477,800

157,618,560

Staples, Inc.

1,547,900

45,368,949

Weight Watchers International, Inc. (a)

353,900

13,851,646

444,445,413

Textiles Apparel & Luxury Goods - 0.3%

NIKE, Inc. Class B

457,400

34,648,050

TOTAL CONSUMER DISCRETIONARY

1,185,800,047

CONSUMER STAPLES - 4.9%

Beverages - 1.8%

PepsiCo, Inc.

2,905,600

156,553,728

The Coca-Cola Co.

728,600

36,779,728

193,333,456

Shares

Value
(Note 1)

Food & Staples Retailing - 1.2%

Wal-Mart Stores, Inc.

1,768,400

$ 93,300,784

Walgreen Co.

883,400

31,987,914

125,288,698

Food Products - 0.2%

Bunge Ltd.

266,500

10,377,510

Smithfield Foods, Inc. (a)

324,200

9,531,480

19,908,990

Household Products - 1.1%

Colgate-Palmolive Co.

857,600

50,126,720

Procter & Gamble Co.

1,210,120

65,878,933

116,005,653

Personal Products - 0.6%

Gillette Co.

1,436,300

60,899,120

TOTAL CONSUMER STAPLES

515,435,917

ENERGY - 5.0%

Energy Equipment & Services - 4.8%

Baker Hughes, Inc.

1,913,570

72,045,911

BJ Services Co. (a)

332,860

15,258,302

Cooper Cameron Corp. (a)

568,800

27,700,560

ENSCO International, Inc.

743,600

21,638,760

Global Industries Ltd. (a)

773,065

4,421,932

Grant Prideco, Inc. (a)

526,300

9,715,498

Halliburton Co.

2,923,200

88,456,032

National-Oilwell, Inc. (a)

1,114,600

35,098,754

Rowan Companies, Inc. (a)

1,159,408

28,208,397

Schlumberger Ltd. (NY Shares)

1,274,500

80,943,495

Smith International, Inc. (a)

452,400

25,225,824

Transocean, Inc. (a)

986,600

28,552,204

Varco International, Inc. (a)

1,266,100

27,714,929

Weatherford International Ltd. (a)

756,940

34,047,161

499,027,759

Oil & Gas - 0.2%

YUKOS Corp. sponsored ADR

673,181

21,407,156

TOTAL ENERGY

520,434,915

FINANCIALS - 9.9%

Capital Markets - 1.6%

Ameritrade Holding Corp. (a)

1,361,800

15,456,430

E*TRADE Financial Corp. (a)

2,973,100

33,150,065

Goldman Sachs Group, Inc.

507,400

47,776,784

Merrill Lynch & Co., Inc.

427,600

23,081,848

Morgan Stanley

438,700

23,150,199

Nomura Holdings, Inc.

1,782,000

26,640,900

169,256,226

Commercial Banks - 1.6%

Bank of America Corp.

602,700

51,000,474

Bank One Corp.

1,003,990

51,203,490

Common Stocks - continued

Shares

Value
(Note 1)

FINANCIALS - continued

Commercial Banks - continued

Fifth Third Bancorp

500,400

$ 26,911,512

UCBH Holdings, Inc.

965,900

38,172,368

167,287,844

Consumer Finance - 2.8%

American Express Co.

2,607,600

133,978,488

Capital One Financial Corp.

720,900

49,295,142

MBNA Corp.

2,807,930

72,416,515

Providian Financial Corp.

1,455,100

21,346,317

SLM Corp.

396,600

16,042,470

293,078,932

Diversified Financial Services - 0.5%

Citigroup, Inc.

1,076,010

50,034,465

Insurance - 2.6%

ACE Ltd.

639,100

27,021,148

AFLAC, Inc.

1,507,720

61,530,053

American International Group, Inc.

2,282,066

162,665,664

XL Capital Ltd. Class A

212,500

16,035,250

267,252,115

Thrifts & Mortgage Finance - 0.8%

Fannie Mae

802,900

57,294,944

Freddie Mac

325,800

20,623,140

New York Community Bancorp, Inc.

447,500

8,784,425

86,702,509

TOTAL FINANCIALS

1,033,612,091

HEALTH CARE - 20.2%

Biotechnology - 3.8%

Biogen Idec, Inc. (a)

490,000

30,992,500

Cephalon, Inc. (a)

558,300

30,148,200

CSL Ltd.

935,032

14,573,956

Digene Corp. (a)

30,126

1,100,503

Eyetech Pharmaceuticals, Inc.

480,500

20,623,060

Genentech, Inc. (a)

1,481,700

83,271,540

Genzyme Corp. - General Division (a)

780,500

36,941,065

IDEXX Laboratories, Inc. (a)

212,400

13,368,456

ImClone Systems, Inc. (a)

284,300

24,390,097

Ligand Pharmaceuticals, Inc.
Class B (a)

834,100

14,496,658

MedImmune, Inc. (a)

453,100

10,602,540

Millennium Pharmaceuticals, Inc. (a)

2,560,956

35,341,193

ONYX Pharmaceuticals, Inc. (a)

469,300

19,879,548

OSI Pharmaceuticals, Inc. (a)

202,000

14,228,880

Pharmion Corp.

264,100

12,919,772

QLT, Inc. (a)

393,000

7,837,019

Tanox, Inc. (a)

1,042,600

19,882,382

Telik, Inc. (a)

459,400

10,965,878

401,563,247

Shares

Value
(Note 1)

Health Care Equipment & Supplies - 4.1%

Alcon, Inc.

711,200

$ 55,935,880

Bausch & Lomb, Inc.

95,900

6,240,213

Baxter International, Inc.

1,865,800

64,388,758

Becton, Dickinson & Co.

1,028,300

53,265,940

C.R. Bard, Inc.

366,400

20,756,560

Dade Behring Holdings, Inc. (a)

465,600

22,125,312

Medtronic, Inc.

2,403,100

117,079,032

Respironics, Inc. (a)

234,300

13,765,125

St. Jude Medical, Inc. (a)

1,004,000

75,952,600

429,509,420

Health Care Providers & Services - 0.3%

UnitedHealth Group, Inc.

489,400

30,465,150

Wellcare Group, Inc.

6,600

112,200

30,577,350

Pharmaceuticals - 12.0%

Abbott Laboratories

2,135,200

87,030,752

Allergan, Inc.

522,800

46,801,056

Barr Pharmaceuticals, Inc. (a)

1,791,425

60,371,023

Elan Corp. PLC sponsored ADR (a)

1,140,500

28,215,970

Eli Lilly & Co.

894,970

62,567,353

Johnson & Johnson

3,319,520

184,897,264

Merck & Co., Inc.

1,083,060

51,445,350

Pfizer, Inc.

14,561,625

499,172,501

Roche Holding AG
(participation certificate)

307,139

30,482,821

Schering-Plough Corp.

6,156,400

113,770,272

Wyeth

2,659,600

96,171,136

1,260,925,498

TOTAL HEALTH CARE

2,122,575,515

INDUSTRIALS - 7.7%

Aerospace & Defense - 3.2%

Bombardier, Inc. Class B (sub. vtg.)

8,244,400

24,846,306

EADS NV

1,697,000

47,353,848

Embraer - Empresa Brasileira de Aeronautica SA sponsored ADR

1,183,210

33,827,974

General Dynamics Corp.

353,400

35,092,620

Goodrich Corp.

1,143,580

36,971,941

Honeywell International, Inc.

310,300

11,366,289

Lockheed Martin Corp.

538,720

28,056,538

Precision Castparts Corp.

789,700

43,188,693

The Boeing Co.

1,557,100

79,552,239

340,256,448

Airlines - 0.3%

Ryanair Holdings PLC sponsored ADR (a)

1,010,800

33,134,024

Common Stocks - continued

Shares

Value
(Note 1)

INDUSTRIALS - continued

Commercial Services & Supplies - 0.9%

Herman Miller, Inc.

429,700

$ 12,435,518

Monster Worldwide, Inc. (a)

1,162,441

29,897,983

Robert Half International, Inc.

1,633,600

48,632,272

90,965,773

Industrial Conglomerates - 3.1%

3M Co.

1,328,500

119,578,285

General Electric Co.

3,224,740

104,481,576

Siemens AG sponsored ADR

428,300

31,060,316

Tyco International Ltd.

2,128,800

70,548,432

325,668,609

Machinery - 0.2%

Joy Global, Inc.

533,951

15,986,493

TOTAL INDUSTRIALS

806,011,347

INFORMATION TECHNOLOGY - 38.3%

Communications Equipment - 10.4%

3Com Corp. (a)

4,796,500

29,978,125

Alcatel SA sponsored ADR (a)

1,100,700

17,049,843

Alvarion Ltd. (a)

1,201,200

15,951,936

Andrew Corp. (a)

606,000

12,126,060

Avaya, Inc. (a)

3,371,000

53,228,090

Brocade Communications Systems, Inc. (a)

6,965,100

41,651,298

Cisco Systems, Inc. (a)

12,312,120

291,797,244

Corning, Inc. (a)

9,000

117,540

Extreme Networks, Inc. (a)

2,039,100

11,255,832

F5 Networks, Inc. (a)

368,600

9,760,528

Foundry Networks, Inc. (a)

2,192,300

30,845,661

Harris Corp.

1,347,000

68,360,250

Juniper Networks, Inc. (a)

1,895,600

46,574,892

Motorola, Inc.

5,330,150

97,275,238

Nortel Networks Corp. (a)

14,059,900

70,158,996

QUALCOMM, Inc.

2,215,300

161,672,594

Research in Motion Ltd. (a)

165,600

11,328,435

Scientific-Atlanta, Inc.

1,706,000

58,857,000

Telefonaktiebolaget LM Ericsson ADR (a)

2,283,100

68,310,352

1,096,299,914

Computers & Peripherals - 5.8%

Dell, Inc. (a)

5,963,300

213,605,406

Diebold, Inc.

330,200

17,457,674

EMC Corp. (a)

4,726,000

53,876,400

International Business Machines Corp.

1,774,670

156,437,161

Lexmark International, Inc. Class A (a)

419,400

40,484,682

Network Appliance, Inc. (a)

2,476,590

53,320,983

Quanta Computer, Inc.

15,455,000

32,917,263

Sun Microsystems, Inc. (a)

6,269,600

27,210,064

UNOVA, Inc. (a)

520,800

10,546,200

605,855,833

Shares

Value
(Note 1)

Electronic Equipment & Instruments - 3.2%

Agilent Technologies, Inc. (a)

739,860

$ 21,663,101

Amphenol Corp. Class A (a)

1,322,582

44,068,432

Arrow Electronics, Inc. (a)

426,700

11,444,094

Flextronics International Ltd. (a)

2,676,600

42,691,770

Hon Hai Precision Industries Co. Ltd.

5,599,000

20,848,228

Mettler-Toledo International, Inc. (a)

334,300

16,427,502

Molex, Inc.

549,900

17,640,792

National Instruments Corp.

1,569,629

48,109,129

Solectron Corp. (a)

4,272,300

27,641,781

Thermo Electron Corp. (a)

860,500

26,451,770

Waters Corp. (a)

1,341,100

64,077,758

341,064,357

Internet Software & Services - 1.2%

EarthLink, Inc. (a)

2,092,088

21,653,111

Openwave Systems, Inc. (a)

1,729,373

21,963,037

Yahoo!, Inc. (a)

2,269,132

82,437,566

126,053,714

IT Services - 1.2%

BearingPoint, Inc. (a)

3,072,021

27,248,826

First Data Corp.

2,131,600

94,898,832

122,147,658

Office Electronics - 0.1%

Zebra Technologies Corp. Class A (a)

77,900

6,777,300

Semiconductors & Semiconductor Equipment - 10.6%

Agere Systems, Inc.:

Class A (a)

8,448,145

19,430,734

Class B (a)

6,893,509

14,821,044

Altera Corp. (a)

2,455,100

54,552,322

Analog Devices, Inc.

1,283,900

60,446,012

Applied Materials, Inc. (a)

1,496,300

29,357,406

ASML Holding NV (NY Shares) (a)

3,950,276

67,589,222

Broadcom Corp. Class A (a)

1,346,500

62,975,805

Chartered Semiconductor Manufacturing Ltd. ADR (a)

2,578,700

20,990,618

Integrated Circuit Systems, Inc. (a)

1,552,759

42,172,934

Intel Corp.

7,910,600

218,332,560

Intersil Corp. Class A

2,090,936

45,289,674

KLA-Tencor Corp. (a)

915,200

45,192,576

Lam Research Corp. (a)

1,927,000

51,643,600

LSI Logic Corp. (a)

2,990,500

22,787,610

MediaTek, Inc.

2,249,000

17,954,483

Microchip Technology, Inc.

672,900

21,223,266

PMC-Sierra, Inc. (a)

2,517,900

36,131,865

Samsung Electronics Co. Ltd.

110,380

45,605,258

Semiconductor Manufacturing International Corp. sponsored ADR

1,458,540

15,650,134

Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR

5,511,173

45,797,848

Teradyne, Inc. (a)

2,474,900

56,180,230

Texas Instruments, Inc.

485,550

11,740,599

Common Stocks - continued

Shares

Value
(Note 1)

INFORMATION TECHNOLOGY - continued

Semiconductors & Semiconductor Equipment - continued

Tokyo Electron Ltd.

578,300

$ 32,910,653

United Microelectronics Corp. sponsored ADR (a)

6,438,062

27,748,047

Xilinx, Inc.

1,274,300

42,446,933

1,108,971,433

Software - 5.8%

Adobe Systems, Inc.

431,267

20,053,916

Cadence Design Systems, Inc. (a)

2,863,000

41,885,690

Compuware Corp. (a)

2,052,637

13,547,404

Electronic Arts, Inc. (a)

236,931

12,924,586

Microsoft Corp.

10,273,350

293,406,876

Novell, Inc. (a)

1,917,000

16,083,630

Oracle Corp. (a)

2,329,891

27,795,600

SAP AG sponsored ADR

1,256,600

52,538,446

Symantec Corp. (a)

353,688

15,484,461

Synopsys, Inc. (a)

1,512,293

42,994,490

Take-Two Interactive Software, Inc. (a)

1,109,100

33,982,824

VERITAS Software Corp. (a)

1,243,667

34,449,576

605,147,499

TOTAL INFORMATION TECHNOLOGY

4,012,317,708

MATERIALS - 0.6%

Containers & Packaging - 0.2%

Owens-Illinois, Inc. (a)

1,034,200

17,333,192

Smurfit-Stone Container Corp. (a)

540,449

10,781,958

28,115,150

Metals & Mining - 0.4%

Arch Coal, Inc.

374,500

13,702,955

CONSOL Energy, Inc.

197,500

7,110,000

Massey Energy Co.

676,800

19,092,528

39,905,483

TOTAL MATERIALS

68,020,633

TELECOMMUNICATION SERVICES - 0.3%

Wireless Telecommunication Services - 0.3%

Nextel Communications, Inc.
Class A (a)

1,332,500

35,524,450

TOTAL COMMON STOCKS

(Cost $8,135,114,138)

10,299,732,623

Preferred Stocks - 0.0%

Shares

Value
(Note 1)

Convertible Preferred Stocks - 0.0%

INFORMATION TECHNOLOGY - 0.0%

Communications Equipment - 0.0%

Chorum Technologies, Inc.
Series E (a)(d)

88,646

$ 37,231

Nonconvertible Preferred Stocks - 0.0%

HEALTH CARE - 0.0%

Biotechnology - 0.0%

Geneprot, Inc. Series A (d)

826,000

2,891,000

TOTAL PREFERRED STOCKS

(Cost $5,910,390)

2,928,231

Convertible Bonds - 0.0%

Principal
Amount

INFORMATION TECHNOLOGY - 0.0%

Semiconductors & Semiconductor Equipment - 0.0%

Micron Technology, Inc. 2.5% 2/1/10 (c)

$ 1,523,000

2,156,431

TOTAL CONVERTIBLE BONDS

(Cost $1,523,000)

2,156,431

Money Market Funds - 2.3%

Shares

Fidelity Cash Central Fund, 1.16% (b)

210,501,797

210,501,797

Fidelity Securities Lending Cash Central Fund, 1.18% (b)

26,582,300

26,582,300

TOTAL MONEY MARKET FUNDS

(Cost $237,084,097)

237,084,097

TOTAL INVESTMENT
PORTFOLIO - 100.5%

(Cost $8,379,631,625)

10,541,901,382

NET OTHER ASSETS - (0.5)%

(55,225,922)

NET ASSETS - 100%

$ 10,486,675,460

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $2,156,431 or 0.0% of net assets.

(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,928,231 or 0.0% of net assets.

Additional information on each holding is as follows:

Security

Acquisition Date

Acquisition Cost

Chorum Technologies, Inc. Series E

9/19/00

$ 1,528,257

Geneprot, Inc. Series A

7/7/00

$ 4,543,000

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $4,018,145,049 and $4,440,163,364, respectively.

The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $414,823 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which the loans were outstanding amounted to $21,844,594. The weighted average interest rate was 1.13%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America

88.8%

Taiwan

1.4%

Netherlands

1.1%

Canada

1.1%

Others (individually less than 1%)

7.6%

100.0%

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $4,332,499,000 of which $2,090,079,000, $2,197,712,000 and $44,708,000 will expire on December 31, 2009, 2010 and 2011, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including securities loaned of $25,868,492) (cost $8,379,631,625) - See accompanying schedule

$ 10,541,901,382

Receivable for investments sold

52,553,169

Receivable for fund shares sold

2,747,696

Dividends receivable

4,338,062

Interest receivable

110,885

Prepaid expenses

23,151

Other affiliated receivables

40,355

Other receivables

867,622

Total assets

10,602,582,322

Liabilities

Payable for investments purchased

$ 76,888,817

Payable for fund shares redeemed

5,937,759

Accrued management fee

4,964,012

Distribution fees payable

265,808

Other affiliated payables

888,829

Other payables and accrued expenses

379,337

Collateral on securities loaned, at value

26,582,300

Total liabilities

115,906,862

Net Assets

$ 10,486,675,460

Net Assets consist of:

Paid in capital

$ 12,150,294,964

Undistributed net investment income

4,018,820

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(3,829,834,877)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

2,162,196,553

Net Assets

$ 10,486,675,460

Initial Class:
Net Asset Value, offering price
and redemption price per share ($8,339,175,590 ÷
265,368,515 shares)

$ 31.42

Service Class:
Net Asset Value, offering price
and redemption price per share ($1,396,905,855 ÷
44,615,705 shares)

$ 31.31

Service Class 2:
Net Asset Value, offering price
and redemption price per share ($748,179,671 ÷
24,060,808 shares)

$ 31.10

Service Class 2R:
Net Asset Value, offering price
and redemption price per share ($2,414,344 ÷ 77,879 shares)

$ 31.00

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 36,456,917

Special Dividends

4,905,600

Interest

214,993

Security lending

390,677

Total income

41,968,187

Expenses

Management fee

$ 30,698,594

Transfer agent fees

3,488,361

Distribution fees

1,567,522

Accounting and security lending fees

705,285

Non-interested trustees' compensation

25,526

Appreciation in deferred trustee compensation account

23,050

Custodian fees and expenses

165,961

Audit

54,087

Legal

12,613

Interest

21,958

Miscellaneous

263,364

Total expenses before reductions

37,026,321

Expense reductions

(1,714,681)

35,311,640

Net investment income (loss)

6,656,547

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities

555,640,981

Foreign currency transactions

30,470

Total net realized gain (loss)

555,671,451

Change in net unrealized appreciation (depreciation) on:

Investment securities

(412,522,781)

Assets and liabilities in foreign currencies

(70,917)

Total change in net unrealized appreciation (depreciation)

(412,593,698)

Net gain (loss)

143,077,753

Net increase (decrease) in net assets resulting from operations

$ 149,734,300

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 6,656,547

$ 23,031,175

Net realized gain (loss)

555,671,451

49,130,228

Change in net unrealized appreciation (depreciation)

(412,593,698)

2,530,101,870

Net increase (decrease) in net assets resulting from operations

149,734,300

2,602,263,273

Distributions to shareholders from net investment income

(25,185,765)

(23,104,405)

Share transactions - net increase (decrease)

(244,847,476)

(285,825,613)

Redemption fees

5

2,361

Total increase (decrease) in net assets

(120,298,936)

2,293,335,616

Net Assets

Beginning of period

10,606,974,396

8,313,638,780

End of period (including undistributed net investment income of $4,018,820 and undistributed net investment income of $22,711,797, respectively)

$ 10,486,675,460

$ 10,606,974,396

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Service Class 2R

Shares

Sold

7,073,494

2,484,479

6,020,770

41,408

Reinvested

677,303

70,256

26,349

100

Redeemed

(19,234,101)

(3,263,099)

(1,836,810)

(8,300)

Net increase (decrease)

(11,483,304)

(708,364)

4,210,309

33,208

Dollars

Sold

$ 224,136,194

$ 78,535,528

$ 188,061,083

$ 1,293,724

Reinvested

22,052,984

2,279,802

849,771

3,208

Redeemed

(602,494,862)

(102,210,060)

(57,101,879)

(252,969)

Net increase (decrease)

$ (356,305,684)

$ (21,394,730)

$ 131,808,975

$ 1,043,963

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Service Class 2R

Shares

Sold

23,586,131

8,385,408

13,542,393

50,235

Reinvested

941,499

102,591

14,708

31

Redeemed

(47,048,733)

(8,519,590)

(3,984,642)

(14,664)

Net increase (decrease)

(22,521,103)

(31,591)

9,572,459

35,602

Dollars

Sold

$ 625,883,728

$ 221,233,256

$ 361,842,888

$ 1,388,031

Reinvested

20,552,932

2,232,378

318,424

671

Redeemed

(1,198,774,049)

(217,996,235)

(102,097,753)

(409,884)

Net increase (decrease)

$ (552,337,389)

$ 5,469,399

$ 260,063,559

$ 978,818

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Service Class 2R

From net investment income

$ 22,052,984

$ 2,279,802

$ 849,771

$ 3,208

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Service Class 2R

From net investment income

$ 20,552,932

$ 2,232,378

$ 318,424

$ 671

Growth Portfolio

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 31.04

$ 23.44

$ 33.61

$ 43.66

$ 54.93

$ 44.87

Income from Investment Operations

Net investment income (loss) E

.02 F

.07

.07

.07

.03

.07

Net realized and unrealized gain (loss)

.44

7.60

(10.17)

(7.27)

(5.27)

15.10

Total from investment operations

.46

7.67

(10.10)

(7.20)

(5.24)

15.17

Distributions from net investment income

(.08)

(.07)

(.07)

(.03)

(.06)

(.08)

Distributions from net realized gain

-

-

-

(2.82)

(5.97)

(5.03)

Total distributions

(.08)

(.07)

(.07)

(2.85)

(6.03)

(5.11)

Redemption fees added to paid in capital

- E,H

- E,H

- E,H

-

-

-

Net asset value, end of period

$ 31.42

$ 31.04

$ 23.44

$ 33.61

$ 43.66

$ 54.93

Total Return B, C, D

1.47%

32.85%

(30.10)%

(17.67)%

(10.96)%

37.44%

Ratios to Average Net Assets G

Expenses before expense reductions

.66% A

.67%

.67%

.68%

.65%

.66%

Expenses net of voluntary waivers, if any

.66% A

.67%

.67%

.68%

.65%

.66%

Expenses net of all reductions

.63% A

.64%

.61%

.65%

.64%

.65%

Net investment income (loss)

.15% A

.28%

.25%

.19%

.07%

.14%

Supplemental Data

Net assets, end of period (000 omitted)

$ 8,339,176

$ 8,594,509

$ 7,016,147

$ 11,458,659

$ 15,517,271

$ 17,142,411

Portfolio turnover rate

76% A

61%

90%

105%

103%

84%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F Investment income per share reflects a special dividend which amounted to $.01 per share.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

H Amount represents less than $.01 per share.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 30.92

$ 23.34

$ 33.48

$ 43.51

$ 54.80

$ 44.82

Income from Investment Operations

Net investment income (loss) E

.01 F

.05

.04

.03

(.02)

.02

Net realized and unrealized gain (loss)

.43

7.58

(10.14)

(7.24)

(5.25)

15.07

Total from investment operations

.44

7.63

(10.10)

(7.21)

(5.27)

15.09

Distributions from net investment income

(.05)

(.05)

(.04)

-

(.05)

(.08)

Distributions from net realized gain

-

-

-

(2.82)

(5.97)

(5.03)

Total distributions

(.05)

(.05)

(.04)

(2.82)

(6.02)

(5.11)

Redemption fees added to paid in capital

- E,H

- E,H

- E,H

-

-

-

Net asset value, end of period

$ 31.31

$ 30.92

$ 23.34

$ 33.48

$ 43.51

$ 54.80

Total Return B, C, D

1.42%

32.78%

(30.20)%

(17.74)%

(11.05)%

37.29%

Ratios to Average Net Assets G

Expenses before expense reductions

.77% A

.77%

.77%

.78%

.76%

.77%

Expenses net of voluntary waivers, if any

.77% A

.77%

.77%

.78%

.76%

.77%

Expenses net of all reductions

.73% A

.74%

.71%

.75%

.74%

.75%

Net investment income (loss)

.05% A

.18%

.15%

.09%

(.04)%

.04%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,396,906

$ 1,401,298

$ 1,058,738

$ 1,655,758

$ 1,847,051

$ 916,330

Portfolio turnover rate

76% A

61%

90%

105%

103%

84%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F Investment income per share reflects a special dividend which amounted to $.01 per share.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

H Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 G

Selected Per-Share Data

Net asset value, beginning of period

$ 30.72

$ 23.21

$ 33.34

$ 43.43

$ 53.40

Income from Investment Operations

Net investment income (loss) E

(.02) F

.01

- I

(.02)

(.09)

Net realized and unrealized gain (loss)

.44

7.53

(10.09)

(7.22)

(3.86)

Total from investment operations

.42

7.54

(10.09)

(7.24)

(3.95)

Distributions from net investment income

(.04)

(.03)

(.04)

(.03)

(.05)

Distributions from net realized gain

-

-

-

(2.82)

(5.97)

Total distributions

(.04)

(.03)

(.04)

(2.85)

(6.02)

Redemption fees added to paid in capital

- E,I

- E,I

- E,I

-

-

Net asset value, end of period

$ 31.10

$ 30.72

$ 23.21

$ 33.34

$ 43.43

Total Return B, C, D

1.36%

32.54%

(30.30)%

(17.87)%

(8.88)%

Ratios to Average Net Assets H

Expenses before expense reductions

.92% A

.92%

.93%

.93%

.91% A

Expenses net of voluntary waivers, if any

.92% A

.92%

.93%

.93%

.91% A

Expenses net of all reductions

.89% A

.89%

.87%

.90%

.90% A

Net investment income (loss)

(.10)% A

.02%

(.01)%

(.06)%

(.19)% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 748,180

$ 609,798

$ 238,543

$ 191,475

$ 57,095

Portfolio turnover rate

76% A

61%

90%

105%

103%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F Investment income per share reflects a special dividend which amounted to $.01 per share.

G For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

I Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 G

Selected Per-Share Data

Net asset value, beginning of period

$ 30.65

$ 23.20

$ 31.05

Income from Investment Operations

Net investment income (loss) E

(.02) F

.01

(.01)

Net realized and unrealized gain (loss)

.43

7.51

(7.84)

Total from investment operations

.41

7.52

(7.85)

Distributions from net investment income

(.06)

(.07)

-

Redemption fees added to paid in capital E,I

-

-

-

Net asset value, end of period

$ 31.00

$ 30.65

$ 23.20

Total Return B, C, D

1.33%

32.54%

(25.28)%

Ratios to Average Net Assets H

Expenses before expense reductions

.92% A

.92%

.96% A

Expenses net of voluntary waivers, if any

.92% A

.92%

.96% A

Expenses net of all reductions

.88% A

.90%

.90% A

Net investment income (loss)

(.10)% A

.02%

(.03)% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 2,414

$ 1,369

$ 210

Portfolio turnover rate

76% A

61%

90%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F Investment income per share reflects a special dividend which amounted to $.01 per share.

G For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

I Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Growth Portfolio

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Growth Portfolio (the fund) is a fund of Variable Insurance Products Fund (the trust) (referred to in this report as Fidelity Variable Insurance Products: Growth Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered nontaxable distributions or capital gain distributions for income tax purposes. Large, non-recurring dividends recognized by the fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends to net investment income per share is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 2,397,984,284

|

Unrealized depreciation

(263,319,281)

Net unrealized appreciation (depreciation)

$ 2,134,665,003

Cost for federal income tax purposes

$ 8,407,236,379

Trading (Redemption) Fees. Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .58% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

Growth Portfolio

4. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan - continued

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 709,744

|

Service Class 2

855,290

Service Class 2R

2,488

$ 1,567,522

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 2,789,501

|

Service Class

465,988

Service Class 2

232,191

Service Class 2R

681

$ 3,488,361

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $193,333 for the period.

Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $1,714,681 for the period.

8. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 12% of the total outstanding shares of the fund and two otherwise unaffiliated shareholders were the owners of record of 36% of the total outstanding shares of the fund.

Growth Portfolio

Semiannual Report

Growth Portfolio

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Adviser

FMR Co., Inc.

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

Mellon Bank, N.A.
Pittsburgh, PA

VIPGRWT-SANN-0804
1.705692.106

Fidelity® Variable Insurance Products:

Value Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

7

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

11

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines call 1-800-221-5207 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

Value Portfolio

Fidelity Variable Insurance Products: Value Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004

% of fund's net assets

Exxon Mobil Corp.

4.9

Verizon Communications, Inc.

4.3

Burlington Resources, Inc.

4.1

International Business Machines Corp.

4.1

American International Group, Inc.

3.7

21.1

Top Five Market Sectors as of June 30, 2004

% of fund's net assets

Financials

27.6

Industrials

13.7

Energy

13.0

Consumer Discretionary

10.6

Information Technology

7.6

Asset Allocation as of June 30, 2004

% of fund's net assets*

Stocks

99.0%

Short-Term
Investments and
Net Other Assets

1.0%

* Foreign investments

4.2%



Semiannual Report

Fidelity Variable Insurance Products: Value Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.8%

Shares

Value (Note 1)

CONSUMER DISCRETIONARY - 10.6%

Automobiles - 0.2%

Nissan Motor Co. Ltd. sponsored ADR

370

$ 8,277

Hotels, Restaurants & Leisure - 0.8%

Hilton Hotels Corp.

1,100

20,526

Marriott International, Inc. Class A

320

15,962

36,488

Internet & Catalog Retail - 2.2%

InterActiveCorp (a)

3,360

101,270

Media - 6.0%

Belo Corp. Series A

390

10,472

McGraw-Hill Companies, Inc.

140

10,720

News Corp. Ltd. ADR

2,650

93,863

Omnicom Group, Inc.

740

56,159

The DIRECTV Group, Inc. (a)

160

2,736

Viacom, Inc. Class B (non-vtg.)

1,420

50,722

Washington Post Co. Class B

30

27,900

XM Satellite Radio Holdings, Inc.
Class A (a)

800

21,832

274,404

Multiline Retail - 0.9%

JCPenney Co., Inc.

1,070

40,403

Textiles Apparel & Luxury Goods - 0.5%

Perry Ellis International, Inc. (a)

400

10,104

Polo Ralph Lauren Corp. Class A

430

14,814

24,918

TOTAL CONSUMER DISCRETIONARY

485,760

CONSUMER STAPLES - 5.4%

Beverages - 0.3%

The Coca-Cola Co.

300

15,144

Food & Staples Retailing - 1.7%

Albertsons, Inc.

1,020

27,071

Safeway, Inc. (a)

2,030

51,440

78,511

Food Products - 0.8%

McCormick & Co., Inc. (non-vtg.)

1,080

36,720

Household Products - 1.2%

Colgate-Palmolive Co.

800

46,760

Procter & Gamble Co.

110

5,988

52,748

Personal Products - 1.3%

Estee Lauder Companies, Inc. Class A

240

11,707

Gillette Co.

1,090

46,216

57,923

Shares

Value (Note 1)

Tobacco - 0.1%

Altria Group, Inc.

140

$ 7,007

TOTAL CONSUMER STAPLES

248,053

ENERGY - 13.0%

Energy Equipment & Services - 2.1%

ENSCO International, Inc.

1,300

37,830

Rowan Companies, Inc. (a)

300

7,299

Smith International, Inc. (a)

100

5,576

Weatherford International Ltd. (a)

990

44,530

95,235

Oil & Gas - 10.9%

Ashland, Inc.

180

9,506

BP PLC sponsored ADR

1,400

74,998

Burlington Resources, Inc.

5,230

189,221

Exxon Mobil Corp.

5,040

223,823

497,548

TOTAL ENERGY

592,783

FINANCIALS - 27.6%

Capital Markets - 6.8%

Allied Capital Corp.

600

14,652

Bank of New York Co., Inc.

140

4,127

Charles Schwab Corp.

16,300

156,643

J.P. Morgan Chase & Co.

1,480

57,380

Morgan Stanley

1,260

66,490

Northern Trust Corp.

260

10,993

310,285

Commercial Banks - 7.8%

Bank of America Corp.

1,460

123,545

Bank One Corp.

840

42,840

Fifth Third Bancorp

410

22,050

Wachovia Corp.

1,500

66,750

Wells Fargo & Co.

1,780

101,869

357,054

Consumer Finance - 1.1%

American Express Co.

270

13,873

SLM Corp.

960

38,832

52,705

Diversified Financial Services - 2.8%

Citigroup, Inc.

2,730

126,945

Insurance - 4.9%

AFLAC, Inc.

350

14,284

American International Group, Inc.

2,350

167,508

Scottish Re Group Ltd.

180

4,185

St. Paul Travelers Companies, Inc.

640

25,946

The Chubb Corp.

150

10,227

222,150

Common Stocks - continued

Shares

Value (Note 1)

FINANCIALS - continued

Real Estate - 0.9%

Apartment Investment & Management Co. Class A

50

$ 1,557

Capital Automotive (SBI)

160

4,693

Manufactured Home Communities, Inc.

1,080

35,845

42,095

Thrifts & Mortgage Finance - 3.3%

Bank Mutual Corp.

300

3,270

Fannie Mae

2,040

145,574

148,844

TOTAL FINANCIALS

1,260,078

HEALTH CARE - 6.2%

Biotechnology - 0.0%

Genentech, Inc. (a)

40

2,248

Health Care Equipment & Supplies - 1.3%

Medtronic, Inc.

1,200

58,464

Health Care Providers & Services - 1.5%

Cardinal Health, Inc.

60

4,203

McKesson Corp.

500

17,165

Tenet Healthcare Corp. (a)

1,300

17,433

UnitedHealth Group, Inc.

450

28,013

66,814

Pharmaceuticals - 3.4%

Johnson & Johnson

160

8,912

Merck & Co., Inc.

630

29,925

Pfizer, Inc.

3,140

107,639

Wyeth

270

9,763

156,239

TOTAL HEALTH CARE

283,765

INDUSTRIALS - 13.7%

Aerospace & Defense - 5.2%

Goodrich Corp.

4,550

147,102

Honeywell International, Inc.

1,440

52,747

Precision Castparts Corp.

670

36,642

236,491

Commercial Services & Supplies - 0.6%

Princeton Review, Inc. (a)

200

1,514

R.R. Donnelley & Sons Co.

820

27,076

28,590

Industrial Conglomerates - 2.1%

3M Co.

40

3,600

General Electric Co.

2,900

93,960

97,560

Shares

Value (Note 1)

Machinery - 3.7%

Caterpillar, Inc.

340

$ 27,010

Deere & Co.

180

12,625

Dover Corp.

2,920

122,932

Pall Corp.

300

7,857

170,424

Road & Rail - 2.1%

Landstar System, Inc. (a)

440

23,263

Norfolk Southern Corp.

2,650

70,278

93,541

TOTAL INDUSTRIALS

626,606

INFORMATION TECHNOLOGY - 7.4%

Communications Equipment - 0.1%

Nokia Corp. sponsored ADR

200

2,908

Computers & Peripherals - 5.0%

Apple Computer, Inc. (a)

520

16,921

Diebold, Inc.

410

21,677

EMC Corp. (a)

500

5,700

International Business Machines Corp.

2,120

186,878

231,176

Software - 2.3%

Microsoft Corp.

3,250

92,820

Salesforce.com, Inc.

60

964

Take-Two Interactive Software, Inc. (a)

400

12,256

106,040

TOTAL INFORMATION TECHNOLOGY

340,124

MATERIALS - 6.3%

Chemicals - 4.7%

Air Products & Chemicals, Inc.

1,080

56,646

Eastman Chemical Co.

2,350

108,641

FMC Corp. (a)

690

29,746

Lyondell Chemical Co.

1,000

17,390

Millennium Chemicals, Inc.

200

3,464

215,887

Containers & Packaging - 0.7%

Smurfit-Stone Container Corp. (a)

1,640

32,718

Metals & Mining - 0.9%

Alcoa, Inc.

500

16,515

International Steel Group, Inc.

290

8,628

Nucor Corp.

200

15,352

40,495

TOTAL MATERIALS

289,100

TELECOMMUNICATION SERVICES - 7.0%

Diversified Telecommunication Services - 7.0%

SBC Communications, Inc.

3,080

74,690

Common Stocks - continued

Shares

Value (Note 1)

TELECOMMUNICATION SERVICES - continued

Diversified Telecommunication Services - continued

Sprint Corp. - FON Group

2,700

$ 47,520

Verizon Communications, Inc.

5,430

196,512

318,722

UTILITIES - 1.6%

Electric Utilities - 1.6%

American Electric Power Co., Inc.

700

22,400

Entergy Corp.

870

48,729

71,129

TOTAL COMMON STOCKS

(Cost $4,144,443)

4,516,120

Convertible Preferred Stocks - 0.2%

INFORMATION TECHNOLOGY - 0.2%

Office Electronics - 0.2%

Xerox Corp. Series C, 6.25%

60

7,896

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $7,180)

7,896

Money Market Funds - 1.7%

Fidelity Cash Central Fund, 1.16% (b)
(Cost $80,384)

80,384

80,384

TOTAL INVESTMENT PORTFOLIO - 100.7%

(Cost $4,232,007)

4,604,400

NET OTHER ASSETS - (0.7)%

(32,770)

NET ASSETS - 100%

$ 4,571,630

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $3,463,888 and $3,177,991, respectively.

The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $338 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $300,000 all of which will expire on December 31, 2010.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Value Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (cost $4,232,007) - See accompanying schedule

$ 4,604,400

Receivable for investments sold

20,541

Receivable for fund shares sold

688

Dividends receivable

4,795

Interest receivable

123

Prepaid expenses

8

Receivable from investment adviser for expense reductions

8,487

Other receivables

324

Total assets

4,639,366

Liabilities

Payable to custodian bank

$ 34,418

Payable for investments purchased

13,359

Payable for fund shares redeemed

98

Accrued management fee

2,170

Distribution fees payable

723

Other affiliated payables

3,001

Other payables and accrued expenses

13,967

Total liabilities

67,736

Net Assets

$ 4,571,630

Net Assets consist of:

Paid in capital

$ 4,391,741

Undistributed net investment income

15,343

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(207,847)

Net unrealized appreciation (depreciation) on investments

372,393

Net Assets

$ 4,571,630

Initial Class:
Net Asset Value, offering price and redemption price per share ($433,217 ÷ 39,754 shares)

$ 10.90

Service Class:
Net Asset Value, offering price and redemption price per share ($1,051,417 ÷ 96,722 shares)

$ 10.87

Service Class 2:
Net Asset Value, offering price and redemption price per share ($3,086,996 ÷ 285,214 shares)

$ 10.82

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 39,301

Interest

1,101

Total income

40,402

Expenses

Management fee

$ 12,888

Transfer agent fees

2,521

Distribution fees

4,293

Accounting fees and expenses

16,500

Non-interested trustees' compensation

10

Custodian fees and expenses

7,907

Registration fees

83

Audit

24,049

Legal

11

Miscellaneous

69

Total expenses before reductions

68,331

Expense reductions

(42,660)

25,671

Net investment income (loss)

14,731

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities

101,442

Foreign currency transactions

(5)

Total net realized gain (loss)

101,437

Change in net unrealized appreciation (depreciation) on investment securities

(117,362)

Net gain (loss)

(15,925)

Net increase (decrease) in net assets resulting from operations

$ (1,194)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Value Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 14,731

$ 12,726

Net realized gain (loss)

101,437

289,825

Change in net unrealized appreciation (depreciation)

(117,362)

625,643

Net increase (decrease) in net assets resulting from operations

(1,194)

928,194

Distributions to shareholders from net investment income

-

(13,029)

Share transactions - net increase (decrease)

324,143

571,085

Total increase (decrease) in net assets

322,949

1,486,250

Net Assets

Beginning of period

4,248,681

2,762,431

End of period (including undistributed net investment income of $15,343 and undistributed net investment income of $612, respectively)

$ 4,571,630

$ 4,248,681

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Shares

Sold

3,063

23,086

101,085

Reinvested

-

-

-

Redeemed

(1,307)

(16,023)

(81,165)

Net increase (decrease)

1,756

7,063

19,920

Dollars

Sold

$ 33,395

$ 251,576

$ 1,097,205

Reinvested

-

-

-

Redeemed

(14,266)

(172,173)

(871,594)

Net increase (decrease)

$ 19,129

$ 79,403

$ 225,611

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Shares

Sold

6,374

7,612

110,002

Reinvested

117

277

828

Redeemed

(689)

(17,131)

(55,311)

Net increase (decrease)

5,802

(9,242)

55,519

Dollars

Sold

$ 61,284

$ 72,354

$ 1,081,987

Reinvested

1,250

2,961

8,818

Redeemed

(6,192)

(152,027)

(499,350)

Net increase (decrease)

$ 56,342

$ (76,712)

$ 591,455

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

From net investment income

$ -

$ -

$ -

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

From net investment income

$ 1,250

$ 2,961

$ 8,818

See accompanying notes which are an integral part of the financial statements.

Value Portfolio

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001 F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.86

$ 8.12

$ 9.64

$ 10.00

Income from Investment Operations

Net investment income (loss) E

.05

.05

.03

.03

Net realized and unrealized gain (loss)

(.01)

2.72

(1.54)

(.37)

Total from investment operations

.04

2.77

(1.51)

(.34)

Distributions from net investment income

-

(.03)

(.01)

(.02)

Net asset value, end of period

$ 10.90

$ 10.86

$ 8.12

$ 9.64

Total Return B, C, D

.37%

34.16%

(15.66)%

(3.40)%

Ratios to Average Net Assets G

Expenses before expense reductions

2.84% A

4.32%

3.60%

7.11% A

Expenses net of voluntary waivers, if any

1.00% A

1.28%

1.50%

1.50% A

Expenses net of all reductions

.95% A

1.22%

1.45%

1.46% A

Net investment income (loss)

.85% A

.57%

.31%

.50% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 433

$ 413

$ 261

$ 290

Portfolio turnover rate

146% A

164%

192%

115% A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F For the period May 9, 2001 (commencement of operations) to December 31, 2001.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001 F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.84

$ 8.12

$ 9.64

$ 10.00

Income from Investment Operations

Net investment income (loss) E

.04

.05

.02

.02

Net realized and unrealized gain (loss)

(.01)

2.70

(1.53)

(.37)

Total from investment operations

.03

2.75

(1.51)

(.35)

Distributions from net investment income

-

(.03)

(.01)

(.01)

Net asset value, end of period

$ 10.87

$ 10.84

$ 8.12

$ 9.64

Total Return B, C, D

.28%

33.91%

(15.66)%

(3.50)%

Ratios to Average Net Assets G

Expenses before expense reductions

2.94% A

4.35%

3.64%

7.23% A

Expenses net of voluntary waivers, if any

1.10% A

1.35%

1.60%

1.60% A

Expenses net of all reductions

1.05% A

1.29%

1.55%

1.56% A

Net investment income (loss)

.75% A

.50%

.21%

.40% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,051

$ 972

$ 803

$ 910

Portfolio turnover rate

146% A

164%

192%

115% A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F For the period May 9, 2001 (commencement of operations) to December 31, 2001.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001 F

Net asset value, beginning of period

$ 10.80

$ 8.10

$ 9.64

$ 10.00

Income from Investment Operations

Net investment income (loss) E

.03

.03

.01

.01

Net realized and unrealized gain (loss)

(.01)

2.70

(1.54)

(.36)

Total from investment operations

.02

2.73

(1.53)

(.35)

Distributions from net investment income

-

(.03)

(.01)

(.01)

Net asset value, end of period

$ 10.82

$ 10.80

$ 8.10

$ 9.64

Total Return B, C, D

.19%

33.75%

(15.87)%

(3.50)%

Ratios to Average Net Assets G

Expenses before expense reductions

3.12% A

4.50%

3.78%

7.38% A

Expenses net of voluntary waivers, if any

1.25% A

1.51%

1.75%

1.75% A

Expenses net of all reductions

1.20% A

1.45%

1.70%

1.70% A

Net investment income (loss)

.60% A

.34%

.06%

.25% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 3,087

$ 2,865

$ 1,698

$ 1,750

Portfolio turnover rate

146% A

164%

192%

115% A

Selected Per-Share Data

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Calculated based on average shares outstanding during the period.

F For the period May 9, 2001 (commencement of operations) to December 31, 2001.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Value Portfolio

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Value Portfolio (the fund) is a fund of Variable Insurance Products Fund (the trust) (referred to in this report as Fidelity Variable Insurance Products: Value Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares and Service Class 2 shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered nontaxable distributions or capital gain distributions for income tax purposes. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Book-tax differences are primarily due to foreign currency transactions, market discount, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 455,367

|

Unrealized depreciation

(91,031)

Net unrealized appreciation (depreciation)

$ 364,336

Cost for federal income tax purposes

$ 4,240,064

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .57% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 521

|

Service Class 2

3,772

$ 4,293

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 198

|

Service Class

490

Service Class 2

1,833

$ 2,521

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The fee is based on the level of average net assets for the month.

Value Portfolio

4. Fees and Other Transactions with Affiliates - continued

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $419 for the period.

Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Expense Reductions.

FMR agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.

Expense
Limitations

Reimbursement
from adviser

Initial Class

1.00%

$ 3,869

Service Class

1.10%

9,585

Service Class 2

1.25%

28,164

$ 41,618

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $1,042 for the period.

7. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 24% of the total outstanding shares of the fund and two otherwise unaffiliated shareholders were the owners of record of 74% of the total outstanding shares of the fund.

Semiannual Report

Semiannual Report

Value Portfolio

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research (Far East) Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

State Street Bank and Trust Company
Quincy, MA

VIPVAL-SANN-0804
1.761034.103

Fidelity® Variable Insurance Products:

Money Market Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investments

3

A complete list of the fund's investments.

Financial Statements

7

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

11

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines call 800-221-5207 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

Money Market Portfolio

Fidelity Variable Insurance Products: Money Market Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 1.4%

Due
Date

Annualized Yield
at Time of
Purchase

Principal
Amount

Value
(Note 1)

Ameritech Capital Funding Corp.

10/15/04

1.15%

$ 10,500,000

$ 10,653,657

Bell Trace Obligated Group

7/7/04

1.38 (c)

11,600,000

11,600,000

TOTAL CORPORATE BONDS

22,253,657

Certificates of Deposit - 19.7%

Domestic Certificates Of Deposit - 0.9%

Washington Mutual Bank, California

9/7/04

1.31

5,000,000

5,000,000

Washington Mutual Bank, Seattle

7/14/04

1.12

5,000,000

5,000,000

8/10/04

1.19

5,000,000

5,000,000

15,000,000

London Branch, Eurodollar, Foreign Banks - 6.2%

BNP Paribas SA

9/14/04

1.43

10,000,000

10,000,000

Credit Agricole Indosuez

8/5/04

1.39

10,000,000

10,000,000

8/5/04

1.40

10,000,000

10,000,000

Credit Suisse First Boston Bank

7/13/04

1.11

10,000,000

10,000,000

DEPFA BANK PLC

9/16/04

1.15

5,000,000

5,000,000

Landesbank Hessen-Thuringen

9/14/04

1.30

10,000,000

10,000,000

Royal Bank of Scotland PLC

7/19/04

1.05

25,000,000

25,000,000

Unicredito Italiano Spa

7/22/04

1.08

20,000,000

20,000,000

100,000,000

New York Branch, Yankee Dollar, Foreign Banks - 12.6%

Bank of Scotland Treasury Services

8/31/04

1.23 (c)

5,000,000

4,999,543

BNP Paribas SA

7/22/04

1.20 (c)

10,000,000

9,995,092

8/5/04

1.41

15,000,000

15,000,000

Canadian Imperial Bank of Commerce

7/15/04

1.29 (c)

20,000,000

20,000,000

7/28/04

1.27 (c)

25,000,000

24,996,533

7/29/04

1.27 (c)

10,000,000

9,997,512

Credit Agricole Indosuez

7/22/04

1.15 (c)

5,000,000

5,002,129

Due
Date

Annualized Yield
at Time of
Purchase

Principal
Amount

Value
(Note 1)

Dresdner Bank AG

8/23/04

1.13%

$ 5,000,000

$ 5,000,000

HBOS Treasury Services PLC

9/4/04

1.29 (c)

20,000,000

20,000,000

HSH Nordbank AG

10/29/04

1.50

15,000,000

14,983,339

Landesbank Baden-Wuerttemberg

8/25/04

1.21 (c)

15,000,000

14,995,956

9/7/04

1.29 (c)

5,000,000

4,998,967

Societe Generale

7/1/04

1.05 (c)

15,000,000

14,998,667

7/8/04

1.09 (c)

5,000,000

4,998,962

7/20/04

1.19 (c)

15,000,000

14,994,827

UBS AG

10/5/04

1.52 (c)

20,000,000

19,989,856

204,951,383

TOTAL CERTIFICATES OF DEPOSIT

319,951,383

Commercial Paper - 11.9%

Charta LLC

8/12/04

1.30

14,325,000

14,303,274

Citibank Credit Card Master Trust I (Dakota Certificate Program)

7/12/04

1.10

5,000,000

4,998,319

7/29/04

1.34

15,000,000

14,984,367

Comcast Corp.

7/14/04

1.50 (a)

5,000,000

4,997,292

CRC Funding LLC

9/1/04

1.47

5,000,000

4,987,342

DaimlerChrysler NA Holding Corp.

7/16/04

1.38

5,000,000

4,997,125

7/20/04

1.48

5,000,000

4,996,094

Dorada Finance, Inc.

9/22/04

1.51

5,000,000

4,982,708

Dresdner U.S. Finance, Inc.

8/13/04

1.11

10,000,000

9,986,742

Emerald (MBNA Credit Card Master Note Trust)

7/27/04

1.13

28,800,000

28,776,496

Ford Motor Credit Co.

7/8/04

1.35

10,000,000

9,997,375

7/15/04

1.40

5,000,000

4,997,278

Grampian Funding Ltd.

11/3/04

1.48

10,000,000

9,948,958

11/10/04

1.48

5,000,000

4,973,050

Motown Notes Program

7/16/04

1.10

5,000,000

4,997,708

8/10/04

1.35

5,000,000

4,992,500

8/12/04

1.34

5,000,000

4,992,183

Commercial Paper - continued

Due
Date

Annualized Yield
at Time of
Purchase

Principal
Amount

Value
(Note 1)

Park Granada LLC

7/2/04

1.08%

$ 30,000,000

$ 29,999,100

7/19/04

1.09

10,000,000

9,994,550

9/21/04

1.31

10,000,000

9,970,389

TOTAL COMMERCIAL PAPER

192,872,850

Federal Agencies - 25.7%

Fannie Mae - 10.4%

Agency Coupons - 10.2%

7/7/04

1.25 (b)(c)

21,000,000

20,978,194

9/23/04

1.49 (c)

25,000,000

24,996,351

2/15/05

1.40

10,000,000

10,000,000

2/23/05

1.33

20,000,000

20,000,000

2/25/05

1.40

25,000,000

25,000,000

3/29/05

1.40

15,000,000

15,000,000

5/4/05

1.54

20,000,000

20,000,000

5/13/05

1.59

20,000,000

20,000,000

5/16/05

1.64

5,000,000

5,000,000

6/3/05

1.84

5,000,000

5,000,000

165,974,545

Discount Notes - 0.2%

11/10/04

1.51

3,915,000

3,893,468

169,868,013

Federal Home Loan Bank - 15.3%

Agency Coupons - 15.3%

7/16/04

1.15 (c)

22,000,000

21,986,620

9/21/04

1.48 (c)

34,000,000

33,995,075

12/17/04

1.42

2,000,000

1,997,263

2/25/05

1.40

25,000,000

25,000,000

2/25/05

1.82

5,000,000

4,986,556

3/1/05

1.49

5,000,000

5,000,000

3/11/05

1.44

35,000,000

35,000,000

4/1/05

1.40

55,000,000

55,000,001

4/1/05

1.45

10,240,000

10,236,249

4/27/05

1.30

10,000,000

10,000,000

4/27/05

1.74

5,000,000

4,982,242

4/28/05

1.35

5,000,000

5,000,000

4/29/05

2.03

5,000,000

4,972,274

5/2/05

1.92

5,000,000

4,977,365

5/3/05

1.37

20,000,000

20,000,000

5/16/05

1.65

5,000,000

5,000,000

248,133,645

TOTAL FEDERAL AGENCIES

418,001,658

Master Notes - 4.3%

Due
Date

Annualized Yield
at Time of
Purchase

Principal
Amount

Value
(Note 1)

General Motors Acceptance Corp. Mortgage Credit

7/1/04

1.61% (c)(f)

$ 15,000,000

$ 15,000,000

Goldman Sachs Group, Inc.

7/8/04

1.25 (f)

14,000,000

14,000,000

8/26/04

1.22 (f)

36,000,000

36,000,000

9/14/04

1.21 (f)

5,000,000

5,000,000

TOTAL MASTER NOTES

70,000,000

Medium-Term Notes - 17.2%

American Express Credit Corp.

7/6/04

1.20 (c)

10,000,000

10,001,004

7/27/04

1.44 (c)

5,000,000

5,004,070

Bank of New York Co., Inc.

7/27/04

1.34 (a)(c)

15,000,000

15,000,000

Bank of Scotland Treasury Services PLC

9/14/04

1.52 (a)(c)

10,000,000

10,004,521

BellSouth Telecommunications

9/4/04

1.40 (c)

5,000,000

5,000,000

Citigroup Global Markets Holdings, Inc.

9/7/04

1.42 (c)

5,000,000

5,005,252

Descartes Funding Trust

7/15/04

1.24 (c)

5,000,000

5,000,000

General Electric Capital Corp.

7/9/04

1.25 (c)

25,000,000

25,000,000

7/19/04

1.36 (c)

20,000,000

20,000,000

HBOS Treasury Services PLC

9/24/04

1.58 (c)

20,000,000

20,000,000

Household Finance Corp.

8/26/04

1.29 (c)

5,000,000

5,000,000

Morgan Stanley

7/6/04

1.13 (c)

5,000,000

5,000,000

7/15/04

1.36 (c)

20,000,000

20,000,000

7/27/04

1.33 (c)

10,000,000

10,000,000

National City Bank

9/1/04

1.23 (c)

10,000,000

9,997,247

RACERS

7/22/04

1.28 (a)(c)

10,000,000

10,000,000

SLM Corp.

7/26/04

1.32 (c)

20,000,000

20,002,339

Verizon Global Funding Corp.

9/15/04

1.61 (c)

15,000,000

15,000,346

9/15/04

1.63 (c)

5,000,000

5,000,000

9/15/04

1.97 (c)

30,000,000

30,000,000

Wells Fargo & Co.

7/15/04

1.30 (c)

15,000,000

15,000,000

Medium-Term Notes - continued

Due
Date

Annualized Yield
at Time of
Purchase

Principal
Amount

Value
(Note 1)

Westpac Banking Corp.

9/13/04

1.39% (c)

$ 10,000,000

$ 9,997,104

9/13/04

1.41 (c)

5,000,000

5,000,000

TOTAL MEDIUM-TERM NOTES

280,011,883

Short-Term Notes - 5.0%

Jackson National Life Insurance Co.

7/1/04

1.25 (c)(f)

7,000,000

7,000,000

Metropolitan Life Insurance Co.

7/1/04

1.30 (c)(f)

10,000,000

10,000,000

7/28/04

1.36 (c)

5,000,000

5,000,000

8/1/04

1.33 (c)(f)

5,000,000

5,000,000

Monumental Life Insurance Co.

7/1/04

1.25 (c)(f)

5,000,000

5,000,000

7/1/04

1.28 (c)(f)

5,000,000

5,000,000

New York Life Insurance Co.

7/1/04

1.24 (c)(f)

30,000,000

30,000,000

Pacific Life Insurance Co.

9/10/04

1.58 (c)(f)

5,000,000

5,000,000

Transamerica Occidental Life Insurance Co.

8/1/04

1.34 (c)(f)

10,000,000

10,000,000

TOTAL SHORT-TERM NOTES

82,000,000

Municipal Securities - 3.6%

Alaska Hsg. Fin. Corp. Bonds
Series A, 1.4%, tender 9/1/04
(FSA Insured) (c)

10,000,000

10,000,000

New York State Hsg. Fin. Svc. Contract Rev. Series 2003 H, 1.34%, LOC Dexia Cr. Local de France, VRDN (c)

11,700,000

11,700,000

San Jose Redev. Agcy. Rev. Series A, 1.34%, LOC JPMorgan Chase Bank, VRDN (c)(d)

11,250,000

11,250,000

Texas Pub. Fin. Auth. Rev. Bonds Series 2003 C3, 1.27% tender 7/14/04 (Liquidity Facility Texas Comptroller Pub. Acnts), CP mode

16,600,000

16,600,000

West Baton Rouge Parish Indl. District #3 Rev. Bonds (Dow Chemical Co. Proj.) Series 1995, 1.27% tender 7/14/04, CP mode

9,400,000

9,400,000

TOTAL MUNICIPAL SECURITIES

58,950,000

Repurchase Agreements - 13.7%

Maturity Amount

Value
(Note 1)

In a joint trading account (Collateralized by U.S. Government Obligations dated 6/30/04 due 7/1/04 At 1.55%)

$ 873,038

$ 873,000

With:

Banc of America Securities LLC At 1.63%, dated 6/30/04 due 7/1/04 (Collateralized by Corporate Obligations with principal amounts of $86,513,121, 1.57% - 8.98%, 8/15/06 - 11/20/36)

80,003,622

80,000,000

Goldman Sachs & Co. At 1.12%,
dated 4/22/04 due 7/13/04 (Collateralized by Corporate Obligations with principal amounts of $5,050,913, 3.95%, 8/25/32)

5,012,756

5,000,000

J.P. Morgan Securities, Inc. At 1.57%, dated 6/30/04 due 7/1/04 (Collateralized by Commercial Paper Obligations with principal amounts of $68,380,000, 0%,
7/1/04 - 7/23/04)

67,002,922

67,000,000

Merrill Lynch, Pierce, Fenner & Smith At 1.65%, dated 5/10/04 due 8/9/04 (Collateralized by Corporate Obligations with principal amounts of $34,617,000, 6% - 12.13%, 9/1/07 - 10/1/20) (c)(e)

25,104,271

25,000,000

Morgan Stanley & Co. At:

1.13%, dated 5/5/04 due 7/1/04 (Collateralized by Mortgage
Loan Obligations with principal amounts of $508,676,467,
1.07%, 4/15/36)

25,044,729

25,000,000

1.58%, dated 6/30/04 due 7/1/04 (Collateralized by Corporate Obligations with principal amounts of $20,456,564, 0.79% - 3.85%, 7/1/04 - 6/25/33)

20,000,878

20,000,000

TOTAL REPURCHASE AGREEMENTS

222,873,000

TOTAL INVESTMENT
PORTFOLIO - 102.5%

1,666,914,431

NET OTHER ASSETS - (2.5)%

(41,385,274)

NET ASSETS - 100%

$ 1,625,529,157

Total Cost for Federal Income Tax Purposes $ 1,666,914,431

Legend

(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $40,001,813 or 2.5% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. The due dates on these types of securities reflect the next interest rate reset date or, when applicable, the final maturity date.

(d) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals.

(e) For financial statement purposes, the maturity amount is calculated based on the rate at period end.

(f) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $147,000,000 or 9.0% of net assets.

Additional information on each holding is as follows:

Security

Acquisition
Date

Cost

General Motors Acceptance Corp. Mortgage Credit 1.61%, 7/1/04

6/1/04

$ 15,000,000

Goldman Sachs Group, Inc.:
1.21%, 9/14/04

2/17/04

$ 5,000,000

1.22%, 8/26/04

1/27/04

$ 36,000,000

1.25%, 7/8/04

1/5/04

$ 14,000,000

Jackson National Life Insurance Co. 1.25%, 7/1/04

3/31/03

$ 7,000,000

Metropolitan Life Insurance Co.:
1.3%, 7/1/04

3/26/02

$ 10,000,000

1.33%, 8/1/04

2/24/03

$ 5,000,000

Monumental Life Insurance Co.:
1.25%, 7/1/04

9/17/98

$ 5,000,000

1.28%, 7/1/04

3/12/99

$ 5,000,000

New York Life Insurance Co.
1.24%, 7/1/04

2/28/02 - 12/19/02

$ 30,000,000

Pacific Life Insurance Co 1.58%, 9/10/04

3/10/03

$ 5,000,000

Transamerica Occidental Life Insurance Co. 1.34%, 8/1/04

4/28/00

$ 10,000,000

Other Information

The fund participated in the interfund lending program as a lender. The average daily loan balance during the period for which loans were outstanding amounted to $8,969,714. The weighted average interest rate was 1.13%. Interest earned from the interfund lending program amounted to $3,928 and is included in interest income on the Statement of Operations. At period end, there were no interfund loans outstanding.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $109,000 all of which will expire on December 31, 2011.

See accompanying notes which are an integral part of the financial statements.

Money Market Portfolio

Fidelity Variable Insurance Products: Money Market Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $222,873,000) - See accompanying schedule

$ 1,666,914,431

Cash

126,845

Receivable for investments sold

1,728

Receivable for fund shares sold

321,432

Interest receivable

3,181,423

Prepaid expenses

5,493

Other receivables

31

Total assets

1,670,551,383

Liabilities

Payable for investments purchased
Regular delivery

$ 19,989,856

Delayed delivery

20,978,194

Payable for fund shares redeemed

3,549,771

Accrued management fee

288,945

Distribution fees payable

2,705

Other affiliated payables

120,218

Other payables and accrued expenses

92,537

Total liabilities

45,022,226

Net Assets

$ 1,625,529,157

Net Assets consist of:

Paid in capital

$ 1,625,672,754

Accumulated net realized gain (loss) on investments

(143,597)

Net Assets

$ 1,625,529,157

Initial Class:
Net Asset Value, offering
price and redemption price
per share ($1,584,089,444 ÷ 1,584,153,650 shares)

$ 1.00

Service Class:
Net Asset Value, offering
price and redemption price
per share ($34,590,107 ÷ 34,590,447 shares)

$ 1.00

Service Class 2:
Net Asset Value, offering
price and redemption price
per share ($6,849,606 ÷ 6,849,820 shares)

$ 1.00

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Interest

$ 10,779,359

Expenses

Management fee

$ 1,726,441

Transfer agent fees

588,523

Distribution fees

14,059

Accounting fees and expenses

94,198

Non-interested trustees' compensation

4,317

Custodian fees and expenses

19,179

Audit

20,034

Legal

1,054

Miscellaneous

94,342

Total expenses before reductions

2,562,147

Expense reductions

(272)

2,561,875

Net investment income

8,217,484

Net realized gain (loss) on investment securities

(34,998)

Net increase in net assets resulting from operations

$ 8,182,486

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Money Market Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income

$ 8,217,484

$ 23,975,974

Net realized gain (loss)

(34,998)

(133,557)

Net increase (decrease) in net assets resulting from operations

8,182,486

23,842,417

Distributions to shareholders from net investment income

(8,217,484)

(23,975,974)

Share transactions - net increase (decrease)

(214,549,398)

(920,442,277)

Total increase (decrease) in net assets

(214,584,396)

(920,575,834)

Net Assets

Beginning of period

1,840,113,553

2,760,689,387

End of period

$ 1,625,529,157

$ 1,840,113,553

Other Information:

Share Transactions at net asset value of $1.00 per share

Six months ended June 30, 2004

Initial Class

Service Class

Service Class 2

Sold

632,365,586

28,301,387

5,311,766

Reinvested

8,131,151

71,180

15,137

Redeemed

(873,812,194)

(13,388,086)

(1,545,325)

Net increase (decrease)

(233,315,457)

14,984,481

3,781,578

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Sold

6,056,411,700

54,027,987

82,930,007

Reinvested

23,602,029

128,154

208,645

Redeemed

(6,967,511,919)

(42,565,009)

(127,673,871)

Net increase (decrease)

(887,498,190)

11,591,132

(44,535,219)

Distributions

Six months ended June 30, 2004

Initial Class

Service Class

Service Class 2

From net investment income

$ 8,131,151

$ 71,180

$ 15,153

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

From net investment income

$ 23,625,076

$ 137,269

$ 213,629

See accompanying notes which are an integral part of the financial statements.

Money Market Portfolio

Financial Highlights - Initial Class

Six months ended June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Income from Investment Operations

Net investment income

.005

.010

.017

.041

.062

.050

Distributions from net investment income

(.005)

(.010)

(.017)

(.041)

(.062)

(.050)

Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return B, C, D

.47%

1.00%

1.69%

4.18%

6.30%

5.17%

Ratios to Average Net Assets E

Expenses before expense reductions

.29% A

.29%

.29%

.28%

.33%

.27%

Expenses net of voluntary waivers, if any

.29% A

.29%

.29%

.28%

.33%

.27%

Expenses net of all reductions

.29% A

.29%

.29%

.28%

.33%

.27%

Net investment income

.94% A

1.00%

1.68%

3.99%

6.18%

5.06%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,584,089

$ 1,817,440

$ 2,705,069

$ 2,753,379

$ 2,233,342

$ 1,939,491

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

Financial Highlights - Service Class

Six months ended June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 E

Selected Per-Share Data

Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Income from Investment Operations

Net investment income

.004

.009

.016

.040

.031

Distributions from net investment income

(.004)

(.009)

(.016)

(.040)

(.031)

Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return B, C, D

.42%

.90%

1.61%

4.10%

3.06%

Ratios to Average Net Assets F

Expenses before expense reductions

.39% A

.38%

.39%

.39%

.47% A

Expenses net of voluntary waivers, if any

.39% A

.38%

.39%

.39%

.45% A

Expenses net of all reductions

.39% A

.38%

.39%

.39%

.45% A

Net investment income

.84% A

.91%

1.58%

3.87%

6.28% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 34,590

$ 19,606

$ 8,017

$ 6,143

$ 103

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E For the period July 7, 2000 (commencement of sale of shares) to December 31, 2000.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Service Class 2

Six months ended June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 E

Selected Per-Share Data

Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Income from Investment Operations

Net investment income

.003

.007

.014

.039

.058

Distributions from net investment income

(.003)

(.007)

(.014)

(.039)

(.058)

Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return B, C, D

.34%

.75%

1.45%

3.96%

5.89%

Ratios to Average Net Assets F

Expenses before expense reductions

.54% A

.54%

.54%

.55%

.96% A

Expenses net of voluntary waivers, if any

.54% A

.54%

.54%

.55%

.60% A

Expenses net of all reductions

.54% A

.54%

.54%

.55%

.60% A

Net investment income

.69% A

.75%

1.43%

3.71%

5.94% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 6,850

$ 3,068

$ 47,604

$ 40,267

$ 108

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

D Total returns would have been lower had certain expenses not been reduced during the periods shown.

E For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

Money Market Portfolio

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Money Market Portfolio (the fund) is a fund of Variable Insurance Products Fund, (the trust) (referred to in this report as Fidelity Variable Insurance Products: Money Market Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares and Service Class 2 shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. As permitted under Rule 2a-7 of the 1940 Act, and certain conditions therein, securities are valued initially at cost and thereafter assume a constant amortization to maturity of any discount or premium. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. There were no significant book-to-tax differences during the period.

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations, corporate obligations and mortgage loan obligations which may be below investment-grade quality, and equity securities. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

2. Operating Policies - continued

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

3. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is calculated on the basis of a group fee rate plus a total income-based component. The group fee rate averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. The total income-based component is calculated according to a graduated schedule providing for different rates based on the fund's gross annualized yield. The rate increases as the fund's gross yield increases.

During the period the income-based portion of this fee was $617,350 or an annualized rate of .07% of the fund's average net assets. For the period, the fund's total annualized management fee rate was .20% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 8,533

|

Service Class 2

5,526

$ 14,059

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 581,184

|

Service Class

5,815

Service Class 2

1,524

$ 588,523

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The fee is based on the level of average net assets for the month.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Expense Reductions.

Through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $272.

5. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 63% of the total outstanding shares of the fund and one otherwise unaffiliated shareholder was the owner of record of 13% of the total outstanding shares of the fund.

Money Market Portfolio

Semiannual Report

Money Market Portfolio

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Adviser

Fidelity Investments Money Management, Inc.

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Co., Inc.
Boston, MA

Custodian

The Bank of New York
New York, NY

VIPMM-SANN-0804
1.705628.106

Fidelity® Variable Insurance Products:

High Income Portfolio - Class R

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

12

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

17

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines, call 1-800-221-5207, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

High Income Portfolio

Fidelity Variable Insurance Products: High Income Portfolio

Investment Summary

Top Five Holdings as of June 30, 2004

(by issuer, excluding cash equivalents)

% of fund's
net assets

AES Corp.

2.5

American Airlines, Inc. pass thru trust certificates

1.9

The Coastal Corp.

1.7

Lyondell Chemical Co.

1.7

CMS Energy Corp.

1.5

9.3

Top Five Market Sectors as of June 30, 2004

% of fund's
net assets

Electric Utilities

8.6

Telecommunications

8.6

Chemicals

6.3

Healthcare

6.3

Energy

5.2

Quality Diversification (% of fund's net assets) as of June 30, 2004

AAA,AA,A

0.0%

BBB

0.2%

BB

22.2%

B

55.3%

CCC,CC,C

14.3%

Not Rated

3.6%

Equities

0.3%

Other Investments

0.0%

Short-Term Investments and Net Other Assets

4.1%



We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings.

Semiannual Report

Fidelity Variable Insurance Products: High Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 92.4%

Principal
Amount

Value
(Note 1)

Convertible Bonds - 0.5%

Technology - 0.5%

Amkor Technology, Inc.:

5% 3/15/07

$ 6,100,000

$ 5,673,000

5.75% 6/1/06

2,000,000

1,920,000

7,593,000

Nonconvertible Bonds - 91.9%

Aerospace - 0.6%

BE Aerospace, Inc. 8% 3/1/08

2,415,000

2,251,988

Dunlop Standard Aerospace Holdings PLC yankee 11.875% 5/15/09

900,000

956,250

Orbital Sciences Corp. 9% 7/15/11

3,690,000

4,040,550

Primus International, Inc. 10.5% 4/15/09 (e)

3,170,000

3,138,300

10,387,088

Air Transportation - 4.8%

American Airlines, Inc. pass thru trust certificates:

6.817% 5/23/11

11,825,000

10,524,250

6.977% 11/23/22

563,436

495,824

7.324% 4/15/11

1,480,000

1,213,600

7.377% 5/23/19

15,000,622

10,500,435

7.379% 5/23/16

7,049,983

4,934,988

7.8% 4/1/08

2,595,000

2,361,450

8.608% 10/1/12

2,285,000

2,102,200

10.18% 1/2/13

2,190,000

1,598,700

AMR Corp. 10.2% 3/15/20

240,000

180,000

Continental Airlines, Inc.:

7.875% 7/2/18

5,820,000

5,412,600

8% 12/15/05

4,615,000

4,107,350

Continental Airlines, Inc. pass thru trust certificates:

6.541% 9/15/09

427,450

354,784

6.748% 9/15/18

371,735

297,388

6.795% 2/2/20

3,649,204

2,919,363

6.8% 7/2/07

228,071

187,019

6.9% 7/2/18

3,407,764

2,658,056

6.954% 2/2/11

652,786

496,117

7.73% 9/15/12

1,001,603

751,202

7.82% 4/15/15

1,393,143

1,058,789

8.307% 10/2/19

3,687,637

2,986,986

8.312% 10/2/12

2,567,514

1,899,960

8.321% 11/1/06

2,240,000

2,016,000

8.388% 5/1/22

192,884

146,592

Delta Air Lines, Inc.:

equipment trust certificates 8.54% 1/2/07

481,074

351,184

7.9% 12/15/09

2,635,000

1,317,500

10% 8/15/08

2,865,000

1,561,425

Delta Air Lines, Inc. pass thru trust certificates:

7.299% 9/18/06

615,000

375,150

7.379% 5/18/10

1,190,990

1,119,530

7.57% 11/18/10

1,350,000

1,252,853

7.779% 11/18/05

4,055,000

2,514,100

7.779% 1/2/12

480,033

259,218

Principal
Amount

Value
(Note 1)

10.06% 1/2/16

$ 1,260,000

$ 630,000

Northwest Airlines Corp. 10% 2/1/09

11,115,000

8,336,250

Northwest Airlines, Inc. pass thru trust certificates:

7.248% 7/2/14

2,150,838

1,527,095

8.304% 9/1/10

1,613,477

1,266,579

NWA Trust 10.23% 6/21/14

1,383,538

1,217,514

80,932,051

Automotive - 0.9%

Cummins, Inc. 5.65% 3/1/98

2,875,000

1,897,500

Delco Remy International, Inc. 9.375% 4/15/12 (e)

4,200,000

4,095,000

Navistar International Corp. 7.5% 6/15/11

1,310,000

1,342,750

Stoneridge, Inc. 11.5% 5/1/12

2,715,000

3,162,975

Visteon Corp.:

7% 3/10/14

3,000,000

2,891,250

8.25% 8/1/10

1,505,000

1,606,588

14,996,063

Banks and Thrifts - 0.2%

Chevy Chase Bank FSB 6.875% 12/1/13

1,135,000

1,135,000

Western Financial Bank 9.625% 5/15/12

1,565,000

1,705,850

2,840,850

Broadcasting - 1.3%

Granite Broadcasting Corp. 9.75% 12/1/10 (e)

8,775,000

8,116,875

Nexstar Finance, Inc. 7% 1/15/14

1,360,000

1,278,400

Sinclair Broadcast Group, Inc. 8% 3/15/12

3,665,000

3,747,463

Spanish Broadcasting System, Inc. 9.625% 11/1/09

2,655,000

2,801,025

XM Satellite Radio, Inc. 6.65% 5/1/09 (e)(f)

5,340,000

5,353,350

21,297,113

Building Materials - 1.7%

FastenTech, Inc. 11.5% 5/1/11 (e)

2,000,000

2,200,000

FIMEP SA 10.5% 2/15/13

10,815,000

12,315,581

General Cable Corp. 9.5% 11/15/10

3,645,000

3,909,263

Jacuzzi Brands, Inc. 9.625% 7/1/10

3,625,000

3,878,750

Juno Lighting, Inc. 11.875% 7/1/09

1,460,000

1,547,600

Texas Industries, Inc. 10.25% 6/15/11

4,860,000

5,406,750

29,257,944

Cable TV - 3.1%

Cablevision Systems Corp.:

5.66% 4/1/09 (e)(f)

8,870,000

9,069,575

8% 4/15/12 (e)

3,710,000

3,663,625

Charter Communications Holding II LLC/Charter Communications Holdings II Capital Corp. 10.25% 9/15/10 (e)

3,205,000

3,237,050

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Cable TV - continued

Charter Communications Operating LLC/Charter Communications Operating Capital Corp.:

8% 4/30/12 (e)

$ 1,755,000

$ 1,693,575

8.375% 4/30/14 (e)

1,940,000

1,872,100

EchoStar DBS Corp. 5.75% 10/1/08

7,570,000

7,446,988

GCI, Inc. 7.25% 2/15/14 (e)

3,425,000

3,262,313

Insight Midwest LP/Insight Capital, Inc. 10.5% 11/1/10

1,475,000

1,611,438

Mediacom LLC/Mediacom Capital Corp.:

7.875% 2/15/11

3,110,000

2,985,600

8.5% 4/15/08

1,180,000

1,185,900

NTL Cable PLC:

6.14% 10/15/12 (e)(f)

3,010,000

3,092,775

8.75% 4/15/14 (e)

7,635,000

7,844,963

Telenet Group Holding NV 0% 6/15/14 (d)(e)

8,560,000

5,435,600

Telewest PLC 11% 10/1/07 (c)

735,000

437,325

52,838,827

Capital Goods - 2.1%

Amsted Industries, Inc. 10.25% 10/15/11 (e)

410,000

440,750

Columbus McKinnon Corp. 10% 8/1/10

2,280,000

2,416,800

Dresser, Inc. 9.375% 4/15/11

7,700,000

8,239,000

Invensys PLC 9.875% 3/15/11 (e)

12,445,000

12,445,000

Leucadia National Corp. 7% 8/15/13

5,740,000

5,661,075

Sensus Metering Systems, Inc. 8.625% 12/15/13 (e)

3,370,000

3,235,200

SPX Corp. 7.5% 1/1/13

3,685,000

3,749,488

36,187,313

Chemicals - 6.3%

BCP Caylux Holdings Luxembourg SCA 9.625% 6/15/14 (e)

10,040,000

10,416,500

Equistar Chemicals LP/Equistar Funding Corp.:

8.75% 2/15/09

3,590,000

3,742,575

10.125% 9/1/08

2,905,000

3,173,713

10.625% 5/1/11

9,495,000

10,539,450

HMP Equity Holdings Corp.:

0% 5/15/08 (e)

1,745,000

1,012,100

0% 5/15/08 unit (e)

4,800,000

3,696,000

Huntsman ICI Chemicals LLC 10.125% 7/1/09

6,405,000

6,501,075

Huntsman ICI Holdings LLC 0% 12/31/09

8,015,000

3,887,275

Huntsman International LLC 9.875% 3/1/09

4,700,000

5,029,000

Huntsman LLC:

8.8% 7/15/11 (e)(f)

5,700,000

5,757,000

11.5% 7/15/12 (e)

2,830,000

2,858,300

Lyondell Chemical Co.:

9.5% 12/15/08

12,345,000

12,869,663

9.625% 5/1/07

2,610,000

2,714,400

Principal
Amount

Value
(Note 1)

9.875% 5/1/07

$ 4,770,000

$ 4,984,650

10.875% 5/1/09

6,965,000

7,261,013

Millennium America, Inc.:

9.25% 6/15/08

8,210,000

8,702,600

9.25% 6/15/08 (e)

3,645,000

3,863,700

Nalco Co. 8.875% 11/15/13 (e)

3,090,000

3,229,050

Rhodia SA:

7.625% 6/1/10 (e)

2,105,000

1,836,613

10.25% 6/1/10 (e)

4,190,000

4,231,900

106,306,577

Consumer Products - 1.3%

Jostens Holding Corp. 0% 12/1/13 (d)

3,030,000

2,060,400

Samsonite Corp. 8.875% 6/1/11 (e)

2,785,000

2,812,850

Sealy Mattress Co. 8.25% 6/15/14 (e)

6,095,000

6,110,238

The Hockey Co. 11.25% 4/15/09

6,395,000

7,482,150

WH Holdings Ltd./WH Capital Corp. 9.5% 4/1/11 (e)

3,075,000

3,198,000

21,663,638

Containers - 3.1%

Anchor Glass Container Corp. 11% 2/15/13

4,700,000

5,358,000

Berry Plastics Corp. 10.75% 7/15/12

3,700,000

4,088,500

BWAY Corp. 10% 10/15/10

6,200,000

6,572,000

Crown European Holdings SA:

9.5% 3/1/11

1,405,000

1,534,963

10.875% 3/1/13

7,905,000

9,051,225

Owens-Brockway Glass Container, Inc.:

8.25% 5/15/13

3,070,000

3,162,100

8.875% 2/15/09

3,655,000

3,929,125

Owens-Illinois, Inc.:

7.35% 5/15/08

195,000

194,513

7.5% 5/15/10

6,280,000

6,138,700

7.8% 5/15/18

575,000

518,938

8.1% 5/15/07

6,000,000

6,180,000

Pliant Corp.:

0% 6/15/09 (d)

4,335,000

3,641,400

11.125% 9/1/09

1,470,000

1,580,250

51,949,714

Diversified Financial Services - 0.2%

E*TRADE Financial Corp. 8% 6/15/11 (e)

4,290,000

4,268,550

Diversified Media - 1.2%

Corus Entertainment, Inc. 8.75% 3/1/12

6,140,000

6,562,125

LBI Media Holdings, Inc. 0% 10/15/13 (d)

6,440,000

4,572,400

LBI Media, Inc. 10.125% 7/15/12

3,285,000

3,662,775

PEI Holdings, Inc. 11% 3/15/10

4,361,000

5,058,760

19,856,060

Electric Utilities - 7.4%

AES Corp.:

7.75% 3/1/14

6,610,000

6,345,600

8.375% 8/15/07

6,315,000

6,378,150

8.5% 11/1/07

2,930,000

3,003,250

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Electric Utilities - continued

AES Corp.: - continued

8.75% 6/15/08

$ 4,178,000

$ 4,345,120

8.75% 5/15/13 (e)

610,000

652,700

8.875% 2/15/11

11,741,000

12,195,964

9.375% 9/15/10

6,388,000

6,819,190

9.5% 6/1/09

1,499,000

1,602,056

AES Gener SA 7.5% 3/25/14 (e)

6,200,000

5,921,000

CMS Energy Corp.:

7.5% 1/15/09

9,190,000

9,178,513

7.75% 8/1/10 (e)

3,590,000

3,581,025

8.5% 4/15/11

3,515,000

3,602,875

8.9% 7/15/08

3,400,000

3,574,250

9.875% 10/15/07

4,305,000

4,644,019

Cogentrix Energy, Inc. 8.75% 10/15/08

5,310,000

5,548,950

Midland Funding Corp. II 11.75% 7/23/05

3,904,042

4,040,684

Midwest Generation LLC/Midwest Finance Corp. 8.75% 5/1/34 (e)

4,760,000

4,807,600

MSW Energy Holdings II LLC/MSW Finance Co. II, Inc. 7.375% 9/1/10 (e)

1,720,000

1,720,000

MSW Energy Holdings LLC/MSW Energy Finance Co., Inc. 8.5% 9/1/10

3,735,000

3,921,750

NRG Energy, Inc. 8% 12/15/13 (e)

13,700,000

13,802,750

Sierra Pacific Power Co. 6.25% 4/15/12 (e)

1,680,000

1,575,000

Sierra Pacific Resources 8.625% 3/15/14 (e)

3,915,000

3,807,338

TECO Energy, Inc.:

7% 5/1/12

2,965,000

2,842,694

7.2% 5/1/11

11,040,000

10,819,200

124,729,678

Energy - 5.2%

ANR Pipeline, Inc. 9.625% 11/1/21

1,475,000

1,644,625

El Paso Energy Corp.:

6.75% 5/15/09

2,100,000

1,908,375

6.95% 12/15/07

3,140,000

3,022,250

El Paso Production Holding Co. 7.75% 6/1/13

2,695,000

2,492,875

Hanover Compressor Co.:

0% 3/31/07

5,595,000

4,420,050

8.625% 12/15/10

1,450,000

1,504,375

9% 6/1/14

2,540,000

2,635,250

Hilcorp Energy I LP/Hilcorp Finance Co. 10.5% 9/1/10 (e)

5,810,000

6,231,225

OAO Gazprom 9.625% 3/1/13 (e)

4,860,000

4,993,650

Pecom Energia SA 9% 5/1/09
(Reg. S)

2,320,000

2,273,600

Pride International, Inc. 7.375% 7/15/14 (e) (g)

5,920,000

5,986,600

Range Resources Corp.:

7.375% 7/15/13

6,880,000

6,845,600

Principal
Amount

Value
(Note 1)

7.375% 7/15/13 (e)

$ 1,870,000

$ 1,860,650

SESI LLC 8.875% 5/15/11

740,000

797,350

Sonat, Inc.:

6.625% 2/1/08

3,000,000

2,748,750

6.75% 10/1/07

1,290,000

1,223,888

7.625% 7/15/11

6,665,000

5,915,188

Tennessee Gas Pipeline Co. 7.5% 4/1/17

1,350,000

1,299,375

The Coastal Corp.:

6.375% 2/1/09

6,055,000

5,320,831

6.5% 5/15/06

2,210,000

2,174,088

6.5% 6/1/08

8,170,000

7,353,000

7.5% 8/15/06

4,625,000

4,578,750

7.75% 6/15/10

11,464,000

10,346,260

87,576,605

Entertainment/Film - 0.4%

Cinemark, Inc. 0% 3/15/14 (d)(e)

10,855,000

7,082,888

Environmental - 1.0%

Allied Waste North America, Inc.:

5.75% 2/15/11 (e)

5,385,000

5,102,288

6.375% 4/15/11 (e)

3,890,000

3,812,200

8.5% 12/1/08

3,690,000

4,036,122

8.875% 4/1/08

3,725,000

4,060,250

17,010,860

Food and Drug Retail - 2.4%

Ahold Finance USA, Inc.:

6.25% 5/1/09

6,415,000

6,270,663

8.25% 7/15/10

10,670,000

11,203,500

Rite Aid Corp.:

6.875% 8/15/13

6,850,000

6,336,250

9.25% 6/1/13

7,145,000

7,537,975

9.5% 2/15/11

4,170,000

4,587,000

Stater Brothers Holdings, Inc. 8.125% 6/15/12 (e)

4,020,000

4,055,175

39,990,563

Food/Beverage/Tobacco - 1.7%

Del Monte Corp. 9.25% 5/15/11

4,215,000

4,604,888

Doane Pet Care Co. 9.75% 5/15/07

3,466,000

3,240,710

Dole Food Co., Inc. 7.25% 6/15/10

8,125,000

7,942,188

National Beef Packing Co. LLC/National Beef Finance Corp. 10.5% 8/1/11

5,655,000

5,909,475

Smithfield Foods, Inc.:

7.625% 2/15/08

1,800,000

1,872,000

7.75% 5/15/13

865,000

912,575

8% 10/15/09

680,000

727,600

Swift & Co. 10.125% 10/1/09

3,685,000

3,906,100

29,115,536

Gaming - 1.4%

Chumash Casino & Resort Enterprise 9% 7/15/10 (e)

1,740,000

1,890,075

MTR Gaming Group, Inc. 9.75% 4/1/10

3,605,000

3,875,375

Park Place Entertainment Corp. 7.875% 3/15/10

2,165,000

2,251,600

Resorts International Hotel & Casino, Inc. 11.5% 3/15/09

1,055,000

1,181,600

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Gaming - continued

Seneca Gaming Corp. 7.25% 5/1/12 (e)

$ 3,140,000

$ 3,136,075

Venetian Casino Resort LLC/Las Vegas Sands, Inc. 11% 6/15/10

2,985,000

3,447,675

Wheeling Island Gaming, Inc. 10.125% 12/15/09

6,730,000

7,133,800

22,916,200

Healthcare - 6.3%

AmeriPath, Inc. 10.5% 4/1/13

10,195,000

10,322,438

AmerisourceBergen Corp.:

7.25% 11/15/12

5,370,000

5,477,400

8.125% 9/1/08

620,000

666,500

Biovail Corp. yankee 7.875% 4/1/10

7,010,000

6,887,325

Concentra Operating Corp.:

9.125% 6/1/12 (e)

800,000

836,000

9.5% 8/15/10

2,145,000

2,284,425

Fisher Scientific International, Inc.:

8% 9/1/13

2,870,000

3,070,900

8.125% 5/1/12

875,000

934,063

Genesis HealthCare Corp. 8% 10/15/13 (e)

5,650,000

5,805,375

HealthSouth Corp.:

8.375% 10/1/11

2,545,000

2,462,288

8.5% 2/1/08

2,545,000

2,500,463

Mariner Health Care, Inc. 8.25% 12/15/13 (e)

6,030,000

6,090,300

Omega Healthcare Investors, Inc. 7% 4/1/14 (e)

3,970,000

3,731,800

PacifiCare Health Systems, Inc. 10.75% 6/1/09

5,205,000

5,933,700

PerkinElmer, Inc. 8.875% 1/15/13

6,665,000

7,281,513

Psychiatric Solutions, Inc. 10.625% 6/15/13

6,335,000

7,221,900

Senior Housing Properties Trust:

7.875% 4/15/15

2,320,000

2,372,200

8.625% 1/15/12

7,850,000

8,517,250

Tenet Healthcare Corp.:

6.375% 12/1/11

12,225,000

10,513,500

7.375% 2/1/13

5,085,000

4,627,350

Triad Hospitals, Inc. 7% 5/15/12 (e)

3,270,000

3,286,350

UAP Holding Corp. 0% 7/15/12 (d)(e)

6,050,000

4,719,000

105,542,040

Homebuilding/Real Estate - 3.9%

American Real Estate Partners/American Real Estate Finance Corp. 8.125% 6/1/12 (e)

8,230,000

8,394,600

Beazer Homes USA, Inc.:

6.5% 11/15/13

860,000

812,700

8.375% 4/15/12

4,080,000

4,314,600

K. Hovnanian Enterprises, Inc.:

6.5% 1/15/14

3,595,000

3,325,375

8.875% 4/1/12

3,040,000

3,222,400

KB Home:

7.75% 2/1/10

9,585,000

9,872,550

8.625% 12/15/08

1,310,000

1,401,700

Principal
Amount

Value
(Note 1)

Meritage Corp. 7% 5/1/14

$ 3,370,000

$ 3,201,500

Standard Pacific Corp.:

5.125% 4/1/09

3,030,000

2,863,350

6.5% 10/1/08

2,510,000

2,522,550

6.875% 5/15/11

2,080,000

2,038,400

Technical Olympic USA, Inc.:

7.5% 3/15/11

5,110,000

4,701,200

9% 7/1/10

1,110,000

1,132,200

10.375% 7/1/12

4,125,000

4,290,000

WCI Communities, Inc. 7.875% 10/1/13

4,285,000

4,338,563

William Lyon Homes, Inc.:

7.5% 2/15/14 (e)

5,645,000

5,320,413

10.75% 4/1/13

3,515,000

3,866,500

65,618,601

Hotels - 0.3%

Host Marriott LP 7.125% 11/1/13

5,655,000

5,541,900

Insurance - 0.6%

Crum & Forster Holdings Corp. 10.375% 6/15/13

6,290,000

6,808,925

TIG Capital Trust I 8.597% 1/15/27 (e)

4,955,000

4,063,100

10,872,025

Leisure - 3.0%

Royal Caribbean Cruises Ltd.:

6.875% 12/1/13

2,050,000

2,024,375

8% 5/15/10

3,285,000

3,531,375

Six Flags, Inc.:

8.875% 2/1/10

11,320,000

11,263,400

9.75% 4/15/13

4,240,000

4,261,200

Speedway Motorsports, Inc.:

6.75% 6/1/13

2,475,000

2,499,750

6.75% 6/1/13 (e)

5,120,000

5,171,200

Town Sports International Holdings, Inc. 0% 2/1/14 (d)(e)

3,870,000

1,741,500

Town Sports International, Inc. 9.625% 4/15/11

8,980,000

8,710,600

Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10

9,820,000

11,366,650

50,570,050

Metals/Mining - 1.9%

Arch Western Finance LLC 6.75% 7/1/13 (e)

470,000

470,000

Compass Minerals International, Inc.:

0% 12/15/12 (d)

5,940,000

4,692,600

0% 6/1/13 (d)

9,470,000

7,291,900

CONSOL Energy, Inc. 7.875% 3/1/12

975,000

1,004,250

Freeport-McMoRan Copper & Gold, Inc. 10.125% 2/1/10

10,025,000

11,127,750

Peabody Energy Corp. 6.875% 3/15/13

3,440,000

3,483,000

Wise Metals Group LLC/Alloys Finance 10.25% 5/15/12 (e)

3,130,000

3,208,250

31,277,750

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Paper - 3.8%

Abitibi-Consolidated, Inc.:

5.02% 6/15/11 (e)(f)

$ 2,830,000

$ 2,861,838

7.75% 6/15/11 (e)

2,830,000

2,844,150

Bowater, Inc. 4.52% 3/15/10 (f)

4,620,000

4,637,325

Buckeye Technologies, Inc. 8.5% 10/1/13

3,825,000

3,882,375

Cellu Tissue Holdings, Inc. 9.75% 3/15/10 (e)

2,620,000

2,515,200

Georgia-Pacific Corp.:

8% 1/15/14

3,730,000

4,037,725

8.125% 5/15/11

2,070,000

2,282,175

8.875% 2/1/10

1,465,000

1,659,113

9.375% 2/1/13

2,620,000

2,993,350

Graphic Packaging International, Inc. 8.5% 8/15/11

1,205,000

1,289,350

Norske Skog Canada Ltd.:

7.375% 3/1/14

2,040,000

1,968,600

8.625% 6/15/11

10,765,000

11,410,900

Stone Container Corp.:

8.375% 7/1/12

8,805,000

9,201,225

9.75% 2/1/11

2,195,000

2,414,500

Tembec Industries, Inc.:

7.75% 3/15/12

1,095,000

1,056,675

8.5% 2/1/11

4,755,000

4,802,550

yankee 8.625% 6/30/09

4,700,000

4,758,750

64,615,801

Publishing/Printing - 0.9%

Houghton Mifflin Co.:

8.25% 2/1/11

2,615,000

2,628,075

9.875% 2/1/13

4,835,000

4,847,088

The Reader's Digest Association, Inc. 6.5% 3/1/11

7,270,000

7,142,775

14,617,938

Railroad - 1.7%

Kansas City Southern Railway Co.:

7.5% 6/15/09

13,155,000

13,155,000

9.5% 10/1/08

150,000

161,250

TFM SA de CV yankee 11.75% 6/15/09

14,915,000

14,616,700

27,932,950

Restaurants - 0.2%

Friendly Ice Cream Corp. 8.375% 6/15/12 (e)

3,165,000

3,085,875

Services - 1.2%

Cornell Companies, Inc. 10.75% 7/1/12 (e)

2,880,000

2,952,000

Iron Mountain, Inc.:

6.625% 1/1/16

2,465,000

2,230,825

8.625% 4/1/13

3,035,000

3,217,100

JohnsonDiversey Holdings, Inc. 0% 5/15/13 (d)

3,210,000

2,471,700

Principal
Amount

Value
(Note 1)

UGS Corp. 10% 6/1/12 (e)

$ 5,630,000

$ 5,967,800

United Rentals North America, Inc. 7.75% 11/15/13

3,980,000

3,761,100

20,600,525

Shipping - 4.9%

CHC Helicopter Corp. 7.375% 5/1/14 (e)

2,410,000

2,349,750

General Maritime Corp. 10% 3/15/13

6,680,000

7,398,100

Horizon Lines LLC 9% 11/1/12 (e)

1,540,000

1,568,875

OMI Corp. 7.625% 12/1/13

9,225,000

9,040,500

Overseas Shipholding Group, Inc. 8.25% 3/15/13

4,745,000

5,077,150

Ship Finance International Ltd. 8.5% 12/15/13 (e)

25,180,000

24,298,678

Teekay Shipping Corp. 8.875% 7/15/11

17,723,000

19,495,300

United Rentals North America, Inc.:

6.5% 2/15/12

11,130,000

10,517,850

7% 2/15/14

2,335,000

2,083,988

81,830,191

Steels - 2.8%

AK Steel Corp.:

7.75% 6/15/12

3,070,000

2,763,000

7.875% 2/15/09

2,600,000

2,418,000

Allegheny Technologies, Inc. 8.375% 12/15/11

6,820,000

6,854,100

CSN Islands VII Corp. 10.75% 9/12/08 (e)

5,755,000

5,970,813

CSN Islands VIII Corp. 9.75% 12/16/13 (e)

3,100,000

2,790,000

Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11

10,130,000

11,218,975

International Steel Group, Inc. 6.5% 4/15/14 (e)

6,460,000

6,040,100

Ispat Inland ULC 9.75% 4/1/14 (e)

8,655,000

8,914,650

46,969,638

Super Retail - 2.0%

Asbury Automotive Group, Inc.:

8% 3/15/14

2,910,000

2,779,050

9% 6/15/12

8,545,000

8,673,175

Barneys, Inc. 9% 4/1/08

4,290,000

4,461,600

J. Crew Intermediate LLC 0% 5/15/08 (d)

4,205,000

3,616,300

Nebraska Book Co., Inc. 8.625% 3/15/12

2,530,000

2,479,400

Sonic Automotive, Inc. 8.625% 8/15/13

3,750,000

3,890,625

Toys 'R' US, Inc. 7.875% 4/15/13

8,735,000

8,691,325

34,591,475

Supermarkets - 0.3%

Stater Brothers Holdings, Inc. 5.06% 6/15/10 (e)(f)

5,470,000

5,558,888

Technology - 3.5%

Amkor Technology, Inc.:

7.125% 3/15/11 (e)

5,490,000

5,119,425

7.75% 5/15/13

3,385,000

3,190,363

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Technology - continued

Celestica, Inc. 7.875% 7/1/11

$ 5,700,000

$ 5,785,500

Flextronics International Ltd. 6.5% 5/15/13

7,845,000

7,629,263

Lucent Technologies, Inc.:

5.5% 11/15/08

7,675,000

7,233,688

6.45% 3/15/29

2,935,000

2,245,275

United Agriculture Products, Inc. 8.25% 12/15/11 (e)

5,470,000

5,934,950

Viasystems, Inc. 10.5% 1/15/11 (e)

2,880,000

3,038,400

Xerox Capital Trust I 8% 2/1/27

5,940,000

5,435,100

Xerox Corp. 7.625% 6/15/13

12,590,000

12,904,750

58,516,714

Telecommunications - 8.3%

Alaska Communications Systems Holdings, Inc. 9.375% 5/15/09

3,825,000

3,853,688

American Cellular Corp. 10% 8/1/11

5,440,000

4,732,800

Centennial Cellular Operating Co. LLC/Centennial Finance Corp. 10.75% 12/15/08

6,413,000

6,637,455

Centennial Communications Corp./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (e)

5,060,000

4,693,150

Cincinnati Bell, Inc. 8.375% 1/15/14

790,000

707,050

Crown Castle International Corp. 7.5% 12/1/13

3,170,000

3,138,300

Empresa Brasil de Telecomm SA 11% 12/15/08 (e)

5,405,000

5,837,400

Eschelon Operating Co. 8.375% 3/15/10

4,470,000

3,665,400

Innova S. de R.L. 9.375% 9/19/13

9,160,000

9,618,000

Millicom International Cellular SA 10% 12/1/13 (e)

13,140,000

13,271,400

Nextel Communications, Inc.:

5.95% 3/15/14

2,285,000

2,102,200

6.875% 10/31/13

13,240,000

13,041,400

Primus Telecommunications Group, Inc. 8% 1/15/14

4,605,000

3,960,300

Qwest Capital Funding, Inc. 7% 8/3/09

4,405,000

3,920,450

Qwest Corp. 9.125% 3/15/12 (e)

8,605,000

9,293,400

Qwest Services Corp.:

13.5% 12/15/10 (e)

14,550,000

16,878,000

14% 12/15/14 (e)

6,380,000

7,624,100

Rogers Wireless, Inc.:

6.375% 3/1/14

3,975,000

3,647,063

9.625% 5/1/11

7,345,000

8,189,675

Triton PCS, Inc.:

8.5% 6/1/13

835,000

789,075

8.75% 11/15/11

5,490,000

4,529,250

9.375% 2/1/11

2,310,000

1,975,050

U.S. West Capital Funding, Inc. 6.375% 7/15/08

3,985,000

3,566,575

Principal
Amount

Value
(Note 1)

U.S. West Communications:

7.2% 11/10/26

$ 895,000

$ 769,700

7.5% 6/15/23

3,535,000

3,110,800

139,551,681

TOTAL NONCONVERTIBLE BONDS

1,548,498,160

TOTAL CORPORATE BONDS

(Cost $1,534,663,581)

1,556,091,160

Commercial Mortgage Securities - 0.3%

Banc of America Commercial Mortgage, Inc. Series 2003-2:

Class BWD, 6.947% 10/11/37 (e)

616,000

588,856

Class BWE, 7.226% 10/11/37 (e)

833,000

796,260

Class BWF, 7.55% 10/11/37 (e)

735,376

702,859

Class BWG, 8.155% 10/11/37 (e)

711,258

673,919

Class BWH, 9.073% 10/11/37 (e)

372,000

358,428

Class BWJ, 9.99% 10/11/37 (e)

615,000

592,206

Class BWK, 10.676% 10/11/37 (e)

479,000

459,860

Class BWL, 10.1596% 10/11/37 (e)

799,000

706,456

LB Multi-family Mortgage Trust Series 1991-4 Class A1, 6.9944% 4/25/21 (e)(f)

261,068

232,351

TOTAL COMMERCIAL MORTGAGE SECURITIES

(Cost $5,103,373)

5,111,195

Common Stocks - 0.1%

Shares

Homebuilding/Real Estate - 0.1%

Swerdlow Real Estate Group LLC (a)(h)

159,600

1,462,415

Super Retail - 0.0%

Barneys, Inc. warrants 4/1/08 (a)

5,020

175,700

Textiles & Apparel - 0.0%

Arena Brands Holding Corp. Class B (h)

48,889

590,579

TOTAL COMMON STOCKS

(Cost $5,402,020)

2,228,694

Nonconvertible Preferred Stocks - 0.2%

Broadcasting - 0.2%

Granite Broadcasting Corp. 12.75% pay-in-kind (a)

5,005

2,802,800

Cable TV - 0.0%

PTV, Inc. Series A, 10.00%

377

3,016

TOTAL NONCONVERTIBLE PREFERRED
STOCKS

(Cost $3,248,629)

2,805,816

Floating Rate Loans - 2.9%

Principal
Amount

Value
(Note 1)

Cable TV - 0.7%

Hilton Head Communications LP Tranche B term loan 5.5% 3/31/08 (f)

$ 7,000,000

$ 6,702,500

Olympus Cable Holdings LLC Tranche A term loan 5.5% 6/30/10 (f)

5,500,000

5,307,500

12,010,000

Electric Utilities - 1.2%

Allegheny Energy Supply Co. LLC Tranche C term loan 5.6228% 6/8/11 (f)

4,400,000

4,477,000

Astoria Energy LLC term loan:

6.8518% 4/15/12 (f)

5,200,000

5,252,000

10.3363% 4/15/12 (f)

3,340,000

3,431,850

Riverside Energy Center LLC:

Credit-Linked Deposit 6.02% 6/24/11 (f)

284,611

285,678

term loan 6.02% 6/24/11 (f)

6,415,389

6,439,447

19,885,975

Hotels - 0.7%

Wyndham International, Inc. term loan:

5.9375% 6/30/06 (f)

10,005,783

9,880,710

6.9375% 4/1/06 (f)

2,222,659

2,217,103

12,097,813

Telecommunications - 0.3%

Qwest Corp. Tranche B term loan 6.95% 6/30/10 (f)

4,500,000

4,443,750

TOTAL FLOATING RATE LOANS

(Cost $46,428,644)

48,437,538

Money Market Funds - 2.8%

Shares

Fidelity Cash Central Fund, 1.16% (b)
(Cost $47,944,081)

47,944,081

47,944,081

Cash Equivalents - 0.9%

Maturity
Amount

Value
(Note 1)

Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.3%, dated 6/30/04 due 7/1/04)
(Cost $15,113,000)

$ 15,113,545

$ 15,113,000

TOTAL INVESTMENT PORTFOLIO - 99.6%

(Cost $1,657,903,328)

1,677,731,484

NET OTHER ASSETS - 0.4%

6,697,313

NET ASSETS - 100%

$ 1,684,428,797

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments.

(d) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end.

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $418,863,016 or 24.9% of net assets.

(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(g) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(h) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,052,994 or 0.1% of net assets.

Additional information on each holding is as follows:

Security

Acquisition Date

Acquisition Cost

Arena Brands Holding Corp. Class B

6/18/97

$ 1,974,627

Swerdlow Real Estate Group LLC

1/15/99

$ 7,697,348

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,236,906,557 and $1,587,548,635, respectively.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $18,879,667. The weighted average interest rate was 1.13%. Interest expense includes $7,133 paid under the interfund lending program. At period end there were no interfund loans outstanding.

The fund participated in the bank borrowing program. The average daily loan balance during the period for which loans were outstanding amounted to $5,077,500. The weighted average interest rate was 1.25%. Interest expense includes $352 paid under the bank borrowing program. At period end, there were no bank borrowings outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America

83.8%

Canada

5.1%

Marshall Islands

2.1%

France

1.7%

United Kingdom

1.5%

Mexico

1.5%

Luxembourg

1.4%

Others (individually less than 1%)

2.9%

100.0%

The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $48,437,538 or 2.9% of net assets.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $1,222,565,000 of which $361,530,000, $772,554,000 and $88,481,000 will expire on December 31, 2008, 2009 and 2010, respectively.

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Fidelity Variable Insurance Products: High Income Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $15,113,000) (cost $1,657,903,328) - See accompanying schedule

$ 1,677,731,484

Receivable for investments sold

44,535,953

Receivable for fund shares sold

133,689

Interest receivable

29,246,187

Prepaid expenses

4,646

Other receivables

27,534

Total assets

1,751,679,493

Liabilities

Payable to custodian bank

$ 3,734

Payable for investments purchased

Regular delivery

58,328,576

Delayed delivery

5,888,861

Payable for fund shares redeemed

1,962,438

Accrued management fee

806,598

Distribution fees payable

40,451

Other affiliated payables

149,055

Other payables and accrued expenses

70,983

Total liabilities

67,250,696

Net Assets

$ 1,684,428,797

Net Assets consist of:

Paid in capital

$ 2,747,239,891

Undistributed net investment income

79,363,058

Accumulated undistributed net realized gain (loss) on investments

(1,162,002,875)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

19,828,723

Net Assets

$ 1,684,428,797

Calculation of Maximum Offering Price

Initial Class:
Net Asset Value, offering price and redemption price per share ($1,292,435,434 ÷ 201,076,965 shares)

$ 6.43

Service Class:
Net Asset Value, offering price and redemption price per share ($327,082,698 ÷ 51,081,390 shares)

$ 6.40

Service Class 2:
Net Asset Value, offering price and redemption price per share ($64,687,377 ÷ 10,190,774 shares)

$ 6.35

Initial Class R:
Net Asset Value, offering price and redemption price per share ($74,448 ÷ 11,592 shares)

$ 6.42

Service Class R:
Net Asset Value, offering price and redemption price per share ($74,433 ÷ 11,628 shares)

$ 6.40

Service Class 2R:
Net Asset Value, offering price and redemption price per share ($74,407 ÷ 11,719 shares)

$ 6.35

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 732,961

Interest

76,126,361

Total income

76,859,322

Expenses

Management fee

$ 5,364,801

Transfer agent fees

628,211

Distribution fees

275,849

Accounting fees and expenses

353,362

Non-interested trustees' compensation

4,798

Custodian fees and expenses

32,074

Registration fees

4,070

Audit

33,201

Legal

8,989

Interest

7,485

Miscellaneous

52,357

Total expenses before reductions

6,765,197

Expense reductions

(896)

6,764,301

Net investment income (loss)

70,095,021

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

62,024,615

Change in net unrealized appreciation (depreciation) on:

Investment securities

(119,300,805)

Assets and liabilities in foreign currencies

60

Total change in net unrealized appreciation (depreciation)

(119,300,745)

Net gain (loss)

(57,276,130)

Net increase (decrease) in net assets resulting from operations

$ 12,818,891

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 70,095,021

$ 147,560,195

Net realized gain (loss)

62,024,615

93,505,636

Change in net unrealized appreciation (depreciation)

(119,300,745)

182,813,372

Net increase (decrease) in net assets resulting from operations

12,818,891

423,879,203

Distributions to shareholders from net investment income

(155,517,698)

(110,937,981)

Share transactions - net increase (decrease)

(260,897,261)

336,533,161

Total increase (decrease) in net assets

(403,596,068)

649,474,383

Net Assets

Beginning of period

2,088,024,865

1,438,550,482

End of period (including undistributed net investment income of $79,363,058 and undistributed net investment income of $164,989,590, respectively)

$ 1,684,428,797

$ 2,088,024,865

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R A

Service Class R A

Service Class 2R A

Shares

Sold

27,421,158

14,128,861

5,151,567

11,592

11,628

11,719

Reinvested

18,412,464

4,720,558

928,353

-

-

-

Redeemed

(74,123,823)

(28,184,527)

(7,010,199)

-

-

-

Net increase (decrease)

(28,290,201)

(9,335,108)

(930,279)

11,592

11,628

11,719

Dollars

Sold

$ 179,057,763

$ 92,291,089

$ 33,350,440

$ 75,000

$ 75,000

$ 75,000

Reinvested

119,128,639

30,447,599

5,941,460

-

-

-

Redeemed

(490,664,314)

(185,476,858)

(45,198,079)

-

-

-

Net increase (decrease)

$ (192,477,912)

$ (62,738,170)

$ (5,906,179)

$ 75,000

$ 75,000

$ 75,000

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

Shares

Sold

187,111,620

59,201,139

17,709,351

-

-

-

Reinvested

15,863,052

3,574,368

424,961

-

-

-

Redeemed

(166,651,099)

(46,461,897)

(12,553,214)

-

-

-

Net increase (decrease)

36,323,573

16,313,610

5,581,098

-

-

-

Dollars

Sold

$ 1,162,830,605

$ 370,826,801

$ 111,025,684

$ -

$ -

$ -

Reinvested

88,674,463

19,909,232

2,354,286

-

-

-

Redeemed

(1,045,910,689)

(293,649,573)

(79,527,648)

-

-

-

Net increase (decrease)

$ 205,594,379

$ 97,086,460

$ 33,852,322

$ -

$ -

$ -

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R A

Service Class R A

Service Class 2R A

From net investment income

$ 119,128,639

$ 30,447,599

$ 5,941,460

$ -

$ -

$ -

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

From net investment income

$ 88,674,463

$ 19,909,232

$ 2,354,286

$ -

$ -

$ -

A For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 6.95

$ 5.93

$ 6.41

$ 8.18

$ 11.32

$ 11.53

Income from Investment Operations

Net investment income (loss) E

.248

.520

.496 H

.774 G, H

1.123

1.095

Net realized and unrealized gain (loss)

(.198)

.980

(.306) H

(1.544) G, H

(3.513)

(.195)

Total from investment operations

.050

1.500

.190

(.770)

(2.390)

.900

Distributions from net investment income

(.570)

(.480)

(.670)

(1.000)

(.750)

(1.075)

Distributions from net realized gain

-

-

-

-

-

(.030)

Distributions in excess of net realized gain

-

-

-

-

-

(.005)

Total distributions

(.570)

(.480)

(.670)

(1.000)

(.750)

(1.110)

Net asset value, end of period

$ 6.43

$ 6.95

$ 5.93

$ 6.41

$ 8.18

$ 11.32

Total Return B, C, D

.67%

27.26%

3.44%

(11.73)%

(22.54)%

8.25%

Ratios to Average Net Assets F

Expenses before expense reductions

.70% A

.69%

.70%

.71%

.68%

.69%

Expenses net of voluntary waivers, if any

.70% A

.69%

.70%

.71%

.68%

.69%

Expenses net of all reductions

.70% A

.69%

.70%

.70%

.68%

.69%

Net investment income (loss)

7.59% A

8.25%

8.65% H

11.00% G, H

11.38%

9.80%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,292,436

$ 1,593,714

$ 1,145,562

$ 1,201,085

$ 1,467,250

$ 2,257,610

Portfolio turnover rate

139% A

130%

96%

138%

68%

82%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.075 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.95% and 12.08% to 8.65% and 11.00%, respectively. The reclassification has no impact on the net assets of the fund.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 6.92

$ 5.91

$ 6.38

$ 8.15

$ 11.29

$ 11.52

Income from Investment Operations

Net investment income (loss) E

.244

.513

.488 H

.758 G, H

1.102

1.074

Net realized and unrealized gain (loss)

(.204)

.967

(.288) H

(1.538) G, H

(3.502)

(.194)

Total from investment operations

.040

1.480

.200

(.780)

(2.400)

.880

Distributions from net investment income

(.560)

(.470)

(.670)

(.990)

(.740)

(1.075)

Distributions from net realized gain

-

-

-

-

-

(.030)

Distributions in excess of net realized gain

-

-

-

-

-

(.005)

Total distributions

(.560)

(.470)

(.670)

(.990)

(.740)

(1.110)

Net asset value, end of period

$ 6.40

$ 6.92

$ 5.91

$ 6.38

$ 8.15

$ 11.29

Total Return B, C, D

.52%

26.97%

3.62%

(11.90)%

(22.68)%

8.08%

Ratios to Average Net Assets F

Expenses before expense reductions

.80% A

.79%

.80%

.81%

.78%

.79%

Expenses net of voluntary waivers, if any

.80% A

.79%

.80%

.81%

.78%

.79%

Expenses net of all reductions

.80% A

.79%

.80%

.81%

.78%

.79%

Net investment income (loss)

7.49% A

8.15%

8.55% H

10.90% G, H

11.28%

9.69%

Supplemental Data

Net assets, end of period (000 omitted)

$ 327,083

$ 417,928

$ 260,489

$ 234,204

$ 227,549

$ 253,972

Portfolio turnover rate

139% A

130%

96%

138%

68%

82%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.075 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.85% and 11.97% to 8.55% and 10.90%, respectively. The reclassification has no impact on the net assets of the fund.

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 F

Selected Per-Share Data

Net asset value, beginning of period

$ 6.87

$ 5.87

$ 6.36

$ 8.13

$ 11.14

Income from Investment Operations

Net investment income (loss) E

.236

.501

.472 I

.716 H, I

.936

Net realized and unrealized gain (loss)

(.196)

.959

(.292) I

(1.496) H, I

(3.206)

Total from investment operations

.040

1.460

.180

(.780)

(2.270)

Distributions from net investment income

(.560)

(.460)

(.670)

(.990)

(.740)

Net asset value, end of period

$ 6.35

$ 6.87

$ 5.87

$ 6.36

$ 8.13

Total Return B, C, D

.52%

26.75%

3.30%

(11.93)%

(21.83)%

Ratios to Average Net Assets G

Expenses before expense reductions

.96% A

.95%

.97%

.98%

1.01% A

Expenses net of voluntary waivers, if any

.96% A

.95%

.97%

.98%

1.01% A

Expenses net of all reductions

.96% A

.95%

.97%

.98%

1.01% A

Net investment income (loss)

7.33% A

7.99%

8.38% I

10.73% H, I

11.04% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 64,687

$ 76,383

$ 32,499

$ 16,508

$ 4,742

Portfolio turnover rate

139% A

130%

96%

138%

68%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. I As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.072 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.68% and 11.81% to 8.38% and 10.73%, respectively. The reclassification has no impact on the net assets of the fund.

Financial Highlights - Initial Class R

Six months ended
June 30, 2004 F

(Unaudited)

Selected Per-Share Data

Net asset value, beginning of period

$ 6.47

Income from Investment Operations

Net investment income (loss) E

.101

Net realized and unrealized gain (loss)

(.151)

Total from investment operations

(.050)

Net asset value, end of period

$ 6.42

Total Return B, C, D

.51%

Ratios to Average Net Assets G

Expenses before expense reductions

.71% A

Expenses net of voluntary waivers, if any

.71% A

Expenses net of all reductions

.71% A

Net investment income (loss)

7.58% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 75

Portfolio turnover rate

139% A

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Financial Highlights - Service Class R

Six months ended
June 30, 2004 F

(Unaudited)

Selected Per-Share Data

Net asset value, beginning of period

$ 6.45

Income from Investment Operations

Net investment income (loss) E

.100

Net realized and unrealized gain (loss)

(.150)

Total from investment operations

(.050)

Net asset value, end of period

$ 6.40

Total Return B, C, D

.52%

Ratios to Average Net Assets G

Expenses before expense reductions

.81% A

Expenses net of voluntary waivers, if any

.81% A

Expenses net of all reductions

.81% A

Net investment income (loss)

7.48% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 74

Portfolio turnover rate

139% A

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

Financial Highlights - Service Class 2R

Six months ended
June 30, 2004 F

(Unaudited)

Selected Per-Share Data

Net asset value, beginning of period

$ 6.40

Income from Investment Operations

Net investment income (loss) E

.097

Net realized and unrealized gain (loss)

(.147)

Total from investment operations

(.050)

Net asset value, end of period

$ 6.35

Total Return B, C, D

.52%

Ratios to Average Net Assets G

Expenses before expense reductions

.97% A

Expenses net of voluntary waivers, if any

.97% A

Expenses net of all reductions

.97% A

Net investment income (loss)

7.32% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 74

Portfolio turnover rate

139% A

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

High Income Portfolio (the fund) is a fund of Variable Insurance Products Fund (the trust) (referred to in this report as Fidelity Variable Insurance Products: High Income Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares, Initial Class R shares, Service Class R shares, and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to prior period premium and discount on debt securities, market discount, partnerships, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 58,226,644

|

Unrealized depreciation

(32,829,997)

Net unrealized appreciation (depreciation)

$ 25,396,647

Cost for federal income tax purposes

$ 1,652,334,837

Trading (Redemption) Fees. Initial Class R shares, Service Class R shares and Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

High Income Portfolio

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .58% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' and Service Class R's average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 184,449

|

Service Class 2

91,344

Service Class R

16

Service Class 2R

40

$ 275,849

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 478,335

|

Service Class

122,089

Service Class 2

27,751

Initial Class R

12

Service Class R

12

Service Class 2R

12

$ 628,211

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The fee is based on the level of average net assets for the month.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $237,616 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Bank Borrowings.

The fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $158 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $738.

8. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 20% of the total outstanding shares of the fund and two otherwise unaffiliated shareholders were the owners of record of 49% of the total outstanding shares of the fund.

High Income Portfolio

Semiannual Report

High Income Portfolio

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research (Far East) Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

The Bank of New York
New York, NY

VIPHIR-SANN-0804
1.803537.100

Fidelity® Variable Insurance Products:

Overseas Portfolio - Class R

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

8

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

13

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines, call 800-221-5207 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

Overseas Portfolio

Fidelity Variable Insurance Products: Overseas Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004

% of fund's
net assets

Vodafone Group PLC (United Kingdom)

3.9

Deutsche Telekom AG sponsored ADR (Germany)

3.4

Total SA Series B (France)

2.8

HSBC Holdings PLC (United Kingdom) (Reg.) (United Kingdom)

2.0

Allianz AG (Reg.) (Germany)

1.8

13.9

Top Five Market Sectors as of June 30, 2004

% of fund's
net assets

Financials

24.6

Information Technology

12.9

Telecommunication Services

12.2

Consumer Discretionary

12.1

Energy

9.5

Top Five Countries as of June 30, 2004

(excluding cash equivalents)

% of fund's
net assets

Japan

18.6

United Kingdom

17.8

France

10.4

Germany

10.2

Switzerland

6.2

Semiannual Report

Fidelity Variable Insurance Products: Overseas Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 91.0%

Shares

Value (Note 1)

Australia - 1.7%

CSL Ltd.

698,840

$ 10,892,529

Newcrest Mining Ltd.

149,871

1,443,487

News Corp. Ltd. sponsored ADR

693,600

22,805,568

TOTAL AUSTRALIA

35,141,584

Belgium - 0.2%

Fortis

215,200

4,776,734

Bermuda - 0.1%

Golar LNG Ltd. (a)

101,400

1,565,944

Brazil - 0.1%

Petroleo Brasileiro SA Petrobras sponsored ADR

47,300

1,327,711

Canada - 3.7%

Agnico-Eagle Mines Ltd.

99,100

1,320,194

Bombardier, Inc. Class B (sub. vtg.)

961,400

2,897,390

Canadian Natural Resources Ltd.

229,700

6,896,683

EnCana Corp.

565,100

24,410,422

Kinross Gold Corp. (a)

975,100

5,424,126

Meridian Gold, Inc. (a)

119,300

1,543,682

Petro-Canada

26,900

1,162,595

Precision Drilling Corp. (a)

94,800

4,529,278

Talisman Energy, Inc.

1,272,100

27,751,788

Wheaton River Minerals Ltd. (a)

835,200

2,341,741

TOTAL CANADA

78,277,899

China - 0.6%

BYD Co. Ltd. (H Shares)

683,600

2,020,177

China Telecom Corp. Ltd. sponsored ADR

200,280

7,067,881

Global Bio-Chem Technology Group Co. Ltd.

4,130,000

2,991,679

Global Bio-Chem Technology Group Co. Ltd. warrants 5/31/07 (a)

516,250

33,756

People's Food Holdings Ltd.

1,700,000

1,118,226

TOTAL CHINA

13,231,719

Denmark - 1.0%

Coloplast AS Series B

27,200

2,571,007

Danske Bank AS

163,300

3,878,971

Novo Nordisk AS Series B

110,100

5,682,243

TDC AS

283,900

9,247,785

TOTAL DENMARK

21,380,006

Finland - 0.5%

Nokia Corp.

682,200

9,919,188

France - 10.4%

Alcatel SA sponsored ADR (a)

813,300

12,598,017

Assurances Generales France
SA (Bearer)

51,100

3,111,715

AXA SA

710,604

15,732,773

BNP Paribas SA

376,602

23,217,807

Business Objects SA sponsored ADR (a)

158,400

3,584,592

Credit Agricole SA

113,400

2,766,053

Shares

Value (Note 1)

Dassault Systemes SA

113,914

$ 5,294,604

France Telecom SA

709,661

18,649,891

L'Oreal SA

162,395

13,002,438

Pernod-Ricard

96,600

12,382,184

Peugeot Citroen SA

47,200

2,634,756

Sanofi-Synthelabo SA sponsored ADR

518,200

16,577,218

Television Francaise 1 SA

96,500

3,047,030

Total SA Series B

308,800

59,339,008

Vivendi Universal SA sponsored ADR (a)

928,000

25,891,200

TOTAL FRANCE

217,829,286

Germany - 8.8%

Adidas-Salomon AG

75,759

9,066,788

Allianz AG (Reg.)

350,800

38,090,211

Altana AG sponsored ADR

31,600

1,908,008

BASF AG

298,725

16,086,341

Deutsche Bank AG (NY Shares)

56,700

4,485,537

Deutsche Boerse AG

139,239

7,093,210

Deutsche Telekom AG sponsored ADR (a)

4,044,300

71,624,553

E.ON AG

72,544

5,258,715

Fresenius Medical Care AG

182,200

13,552,656

Infineon Technologies AG sponsored ADR (a)

185,800

2,526,880

Muenchener Rueckversicherungs-Gesellschaft AG (Reg.)

59,800

6,498,248

RWE AG

164,060

7,733,385

TOTAL GERMANY

183,924,532

Greece - 0.2%

Cosmote Mobile Telecommunications SA

159,500

2,509,388

Greek Organization of Football Prognostics SA

129,780

2,456,501

TOTAL GREECE

4,965,889

Hong Kong - 1.2%

Esprit Holdings Ltd.

221,000

988,859

Hong Kong Exchanges & Clearing Ltd.

1,952,000

4,004,205

Hutchison Whampoa Ltd.

950,600

6,489,840

Techtronic Industries Co. Ltd.

6,544,000

10,445,499

Television Broadcasts Ltd.

511,000

2,188,184

TOTAL HONG KONG

24,116,587

India - 2.7%

Bank of Baroda

501,743

1,637,554

Cipla Ltd.

633,000

2,918,891

Dr. Reddy's Laboratories Ltd.

151,900

2,427,592

Housing Development Finance Corp. Ltd.

1,107,583

12,457,448

I-Flex Solutions Ltd.

429,464

5,420,728

Infosys Technologies Ltd.

135,558

16,287,895

Reliance Industries Ltd.

367,900

3,438,135

Satyam Computer Services Ltd.

1,219,887

8,106,046

Common Stocks - continued

Shares

Value (Note 1)

India - continued

State Bank of India

179,400

$ 1,760,364

Wipro Ltd.

86,289

998,681

TOTAL INDIA

55,453,334

Indonesia - 0.1%

PT Bank Mandiri Persero Tbk

14,066,000

1,758,250

Italy - 0.3%

ENI Spa

328,286

6,588,043

Japan - 18.0%

Advantest Corp.

63,200

4,296,021

Canon, Inc.

243,600

13,008,240

Daiwa Securities Group, Inc.

1,417,000

10,330,416

FamilyMart Co. Ltd.

276,700

9,159,907

Honda Motor Co. Ltd.

157,000

7,636,480

Ito Yokado Ltd.

622,000

27,010,906

JAFCO Co. Ltd.

247,800

19,194,561

KDDI Corp.

3,889

22,565,992

Kyocera Corp.

137,700

11,814,660

Millea Holdings, Inc.

529

7,968,977

Mizuho Financial Group, Inc.

5,570

25,638,481

Murata Manufacturing Co. Ltd.

181,500

10,497,815

Nikko Cordial Corp.

3,191,000

15,696,917

Nippon System Development Co. Ltd.

102,000

2,257,403

Nitto Denko Corp.

219,600

11,394,583

Nomura Holdings, Inc.

1,729,000

25,848,550

Nomura Research Institute Ltd.

20,200

2,184,555

Oriental Land Co. Ltd.

38,700

2,580,251

ORIX Corp.

92,700

10,775,108

Rohm Co. Ltd.

62,600

7,602,377

Seiyu Ltd. (a)

1,091,000

3,631,948

SMC Corp.

35,400

3,884,339

Softbank Corp.

94,200

4,204,594

Sumitomo Electric Industries Ltd.

852,000

8,817,930

Sumitomo Mitsui Financial Group, Inc.

4,997

34,757,044

TDK Corp.

98,500

7,584,002

Tokyo Electron Ltd.

206,800

11,768,845

Toyota Motor Corp.

631,800

25,783,758

UFJ Holdings, Inc. (a)

6,564

29,420,327

TOTAL JAPAN

377,314,987

Korea (South) - 2.6%

Honam Petrochemical Corp.

118,960

4,059,788

Kookmin Bank (a)

167,140

5,197,338

LG Electronics, Inc.

254,140

12,063,122

Samsung Electro-Mechanics Co. Ltd. (a)

183,200

5,196,883

Samsung Electronics Co. Ltd.

60,640

25,054,383

Shinhan Financial Group Co. Ltd.

261,240

3,801,501

TOTAL KOREA (SOUTH)

55,373,015

Malaysia - 0.1%

Public Bank BHD (For. Reg.)

1,452,250

2,522,329

Shares

Value (Note 1)

Netherlands - 5.1%

Aegon NV

72,300

$ 873,835

ASML Holding NV (a)

1,780,174

30,458,777

EADS NV

105,300

2,938,338

ING Groep NV (Certificaten Van Aandelen)

832,324

19,726,079

Koninklijke Ahold NV (a)

461,300

3,658,109

Koninklijke KPN NV

845,606

6,455,945

Unilever NV (NY Shares)

237,400

16,264,274

VNU NV

547,525

15,939,467

Wolters Kluwer NV (Certificaten Van Aandelen)

514,275

9,357,970

TOTAL NETHERLANDS

105,672,794

Peru - 0.1%

Compania de Minas Buenaventura SA sponsored ADR

52,500

1,160,250

Portugal - 0.2%

Portugal Telecom SGPS SA (Reg.)

443,150

4,793,931

Russia - 0.8%

JSC MMC 'Norilsk Nickel'
sponsored ADR

75,800

4,153,840

Lukoil Oil Co. sponsored ADR

39,300

4,106,850

OAO Gazprom sponsored ADR

136,600

3,920,420

YUKOS Corp. sponsored ADR

132,403

4,210,415

TOTAL RUSSIA

16,391,525

South Africa - 0.3%

Harmony Gold Mining Co. Ltd. sponsored ADR

172,600

1,827,834

MTN Group Ltd. (a)

904,583

4,190,267

TOTAL SOUTH AFRICA

6,018,101

Spain - 2.2%

Banco Bilbao Vizcaya Argentaria SA

184,900

2,476,034

Banco Popular Espanol SA (Reg.)

174,700

9,890,436

Banco Santander Central Hispano SA

1,208,868

12,693,114

Telefonica SA

1,446,462

21,518,533

TOTAL SPAIN

46,578,117

Sweden - 1.4%

Skandia Foersaekrings AB

355,200

1,474,918

Skandinaviska Enskilda Banken AB
(A Shares)

269,900

3,915,342

Telefonaktiebolaget LM Ericsson ADR (a)

784,500

23,472,240

TOTAL SWEDEN

28,862,500

Switzerland - 6.2%

Actelion Ltd. (Reg.) (a)

22,893

2,638,540

Adecco SA

96,840

4,836,574

Compagnie Financiere Richemont unit

312,115

8,168,849

Credit Suisse Group (Reg.)

545,503

19,534,462

Novartis AG (Reg.)

782,531

34,822,629

Roche Holding AG (participation certificate)

242,968

24,114,000

Common Stocks - continued

Shares

Value (Note 1)

Switzerland - continued

UBS AG (Reg.)

411,514

$ 29,242,185

Zurich Financial Services AG

43,940

6,954,646

TOTAL SWITZERLAND

130,311,885

Taiwan - 2.1%

High Tech Computer Corp.

639,000

2,798,123

Hon Hai Precision Industries Co. Ltd.

1,834,880

6,832,291

Quanta Computer, Inc.

2,701,000

5,752,800

Taishin Financial Holdings Co. Ltd.

1,668,000

1,376,336

Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR

312,200

2,594,382

United Microelectronics Corp. (a)

21,867,000

16,284,629

United Microelectronics Corp. sponsored ADR (a)

605,100

2,607,981

Yageo Corp. (a)

9,414,000

4,851,421

TOTAL TAIWAN

43,097,963

United Kingdom - 17.3%

3i Group PLC

663,873

7,398,085

Abbey National PLC

616,800

5,759,722

AstraZeneca PLC (United Kingdom)

497,100

22,687,644

Aviva PLC

266,300

2,756,840

BHP Billiton PLC

593,577

5,167,580

BP PLC

2,634,894

23,525,212

British Sky Broadcasting Group PLC (BSkyB)

310,800

3,517,220

Centrica PLC

1,630,900

6,661,497

Dixons Group PLC

5,328,300

16,019,846

Enterprise Inns PLC

281,200

2,941,788

Hilton Group PLC

2,014,800

10,117,407

HSBC Holdings PLC (United Kingdom) (Reg.)

2,842,849

42,591,564

ITV PLC

2,419,372

5,084,085

Kesa Electricals PLC

1,433,748

7,545,263

Lloyds TSB Group PLC

248,850

1,954,781

Man Group PLC

611,067

15,876,151

mmO2 PLC (a)

2,395,800

4,042,897

Prudential PLC

552,578

4,770,435

Reckitt Benckiser PLC

331,800

9,423,397

Reuters Group PLC

1,006,400

6,784,019

Rexam PLC

298,902

2,437,683

Rio Tinto PLC (Reg.)

642,180

15,741,437

Royal Bank of Scotland Group PLC

243,400

7,032,330

Shire Pharmaceuticals Group PLC sponsored ADR (a)

369,700

9,885,778

Smith & Nephew PLC

1,796,100

19,854,089

Tesco PLC

1,548,141

7,499,431

Vodafone Group PLC

37,316,904

82,470,360

William Hill PLC

189,500

1,910,061

Shares

Value (Note 1)

Xstrata PLC

367,500

$ 4,927,799

Yell Group PLC

1,044,000

6,548,366

TOTAL UNITED KINGDOM

362,932,767

United States of America - 3.0%

ENSCO International, Inc.

288,900

8,406,990

Fox Entertainment Group, Inc. Class A (a)

83,900

2,240,130

Freeport-McMoRan Copper & Gold, Inc. Class B

285,900

9,477,585

Grant Prideco, Inc. (a)

373,900

6,902,194

Nabors Industries Ltd. (a)

110,200

4,983,244

Newmont Mining Corp.

31,700

1,228,692

NTL, Inc. (a)

230,100

13,258,362

Pride International, Inc. (a)

175,400

3,001,094

Synthes, Inc.

77,867

8,896,682

Weatherford International Ltd. (a)

113,100

5,087,238

Wellcare Group, Inc.

1,300

22,100

TOTAL UNITED STATES OF AMERICA

63,504,311

TOTAL COMMON STOCKS

(Cost $1,535,585,706)

1,904,791,181

Nonconvertible Preferred Stocks - 0.8%

Germany - 0.8%

Fresenius Medical Care AG

129,900

6,969,161

Porsche AG (non-vtg.)

14,600

9,794,278

TOTAL NONCONVERTIBLE PREFERRED
STOCKS

(Cost $12,028,885)

16,763,439

Nonconvertible Bonds - 0.5%

Principal Amount

United Kingdom - 0.5%

Telewest Communications PLC yankee:

0% 2/1/10 (c)(d)

$ 630,000

270,900

9.25% 4/15/09 (c)

1,680,000

772,800

9.875% 2/1/10 (c)

4,295,000

2,405,200

Telewest PLC:

11% 10/1/07 (c)

8,260,000

4,914,700

yankee 9.625% 10/1/06 (c)

2,960,000

1,687,200

TOTAL NONCONVERTIBLE BONDS

(Cost $8,459,875)

10,050,800

Government Obligations - 1.2%

Germany - 0.6%

German Federal Republic:

4.25% 7/4/14

EUR

5,000,000

6,063,729

- principal STRIPS 0% 1/4/14

EUR

7,440,000

6,043,348

TOTAL GERMANY

12,107,077

Government Obligations - continued

Principal
Amount

Value
(Note 1)

Japan - 0.6%

Japan Government 0.1% 8/20/05

JPY

1,352,700,000

$ 12,433,703

TOTAL GOVERNMENT OBLIGATIONS

(Cost $24,480,193)

24,540,780

Money Market Funds - 12.5%

Shares

Fidelity Cash Central Fund, 1.16% (b)

198,108,075

198,108,075

Fidelity Securities Lending Cash Central Fund, 1.18% (b)

63,694,061

63,694,061

TOTAL MONEY MARKET FUNDS

(Cost $261,802,136)

261,802,136

TOTAL INVESTMENT PORTFOLIO - 106.0%

(Cost $1,842,356,795)

2,217,948,336

NET OTHER ASSETS - (6.0)%

(124,745,779)

NET ASSETS - 100%

$ 2,093,202,557

Currency Abbreviations

EUR

-

European Monetary Unit

JPY

-

Japanese yen

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments.

(d) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $870,741,019 and $787,320,568, respectively.

The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $502 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $606,700,000 of which $367,608,000, $191,786,000 and $47,306,000 will expire on December 31, 2009, 2010 and 2011, respectively.

See accompanying notes which are an integral part of the financial statements.

Overseas Portfolio

Fidelity Variable Insurance Products: Overseas Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including securities loaned of $61,286,817) (cost $1,842,356,795) - See accompanying schedule

$ 2,217,948,336

Cash

5,534

Foreign currency held at value (cost $ 3,891,360)

3,846,270

Receivable for investments sold

536,942

Receivable for fund shares sold

5,995,097

Dividends receivable

2,338,233

Interest receivable

184,816

Prepaid expenses

3,732

Other affiliated receivables

8,536

Other receivables

383,905

Total assets

2,231,251,401

Liabilities

Payable for investments purchased

$ 67,792,625

Payable for fund shares redeemed

4,726,022

Accrued management fee

1,251,048

Distribution fees payable

74,700

Other affiliated payables

235,130

Other payables and accrued expenses

275,258

Collateral on securities loaned, at value

63,694,061

Total liabilities

138,048,844

Net Assets

$ 2,093,202,557

Net Assets consist of:

Paid in capital

$ 2,274,934,071

Distributions in excess of net investment income

(2,882,395)

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(554,287,061)

Net unrealized appreciation (depreci-
ation) on investments and assets and liabilities in foreign currencies

375,437,942

Net Assets

$ 2,093,202,557

Calculation of Maximum Offering Price
Initial Class:
Net Asset Value, offering price and redemption price per share ($1,430,323,652 ÷ 91,840,585 shares)

$ 15.57

Service Class:
Net Asset Value, offering price and redemption price per share ($276,536,907 ÷ 17,821,383 shares)

$ 15.52

Service Class 2:
Net Asset Value, offering price and redemption price per share ($217,429,253 ÷ 14,043,824 shares)

$ 15.48

Initial Class R:
Net Asset Value, offering price and redemption price per share ($81,566,300 ÷ 5,244,063 shares)

$ 15.55

Service Class R:
Net Asset Value, offering price and redemption price per share ($72,878,646 ÷ 4,701,272 shares)

$ 15.50

Service Class 2R:
Net Asset Value, offering price and redemption price per share ($14,467,799 ÷ 939,385 shares)

$ 15.40

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 20,677,073

Interest

928,505

Security lending

972,053

22,577,631

Less foreign taxes withheld

(2,419,794)

Total income

20,157,837

Expenses

Management fee

$ 7,508,274

Transfer agent fees

700,898

Distribution fees

406,575

Accounting and security lending fees

488,651

Non-interested trustees' compensation

4,807

Appreciation in deferred trustee compensation account

6,454

Custodian fees and expenses

371,773

Registration fees

195

Audit

33,016

Legal

2,428

Miscellaneous

49,286

Total expenses before
reductions

9,572,357

Expense reductions

(384,397)

9,187,960

Net investment income (loss)

10,969,877

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities (net of foreign taxes of $215,094)

65,555,846

Foreign currency transactions

(41,511)

Total net realized gain (loss)

65,514,335

Change in net unrealized appreciation (depreciation) on:

Investment securities (net of decrease in deferred foreign taxes of $3,690,743)

(61,392,641)

Assets and liabilities in foreign currencies

(74,717)

Total change in net unrealized appreciation (depreciation)

(61,467,358)

Net gain (loss)

4,046,977

Net increase (decrease) in net assets resulting from operations

$ 15,016,854

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Overseas Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 10,969,877

$ 12,219,607

Net realized gain (loss)

65,514,335

(23,642,194)

Change in net unrealized appreciation (depreciation)

(61,467,358)

580,158,781

Net increase (decrease) in net assets resulting
from operations

15,016,854

568,736,194

Distributions to shareholders from net investment income

(22,557,627)

(11,225,102)

Share transactions - net increase (decrease)

174,447,818

76,831,320

Redemption fees

25,840

30,862

Total increase (decrease) in net assets

166,932,885

634,373,274

Net Assets

Beginning of period

1,926,269,672

1,291,896,398

End of period (including distributions in excess of net investment income of $2,882,395 and undistributed net investment income of $8,430,134, respectively)

$ 2,093,202,557

$ 1,926,269,672

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

Shares

Sold

11,075,633

3,058,353

6,755,093

2,950,158

1,213,826

503,458

Reinvested

1,047,651

175,526

101,002

30,931

41,469

4,934

Redeemed

(12,405,150)

(1,292,239)

(1,898,355)

(271,905)

(172,337)

(27,665)

Net increase (decrease)

(281,866)

1,941,640

4,957,740

2,709,184

1,082,958

480,727

Dollars

Sold

$ 176,812,653

$ 48,615,520

$ 107,053,104

$ 45,816,556

$ 19,324,001

$ 7,674,161

Reinvested

16,877,656

2,818,947

1,619,063

497,678

665,579

78,704

Redeemed

(195,405,519)

(20,377,386)

(30,204,082)

(4,290,617)

(2,693,039)

(435,161)

Net increase (decrease)

$ (1,715,210)

$ 31,057,081

$ 78,468,085

$ 42,023,617

$ 17,296,541

$ 7,317,704

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

Shares

Sold

135,754,582

34,982,458

57,905,822

1,401,445

2,096,259

337,680

Reinvested

891,621

140,448

26,238

15,499

17,531

2,278

Redeemed

(138,456,054)

(35,447,830)

(53,234,293)

(307,443)

(140,438)

(29,586)

Net increase (decrease)

(1,809,851)

(324,924)

4,697,767

1,109,501

1,973,352

310,372

Dollars

Sold

$ 1,613,667,675

$ 391,087,076

$ 672,794,854

$ 17,351,785

$ 25,897,371

$ 3,723,543

Reinvested

9,156,952

1,438,187

268,410

159,020

179,341

23,192

Redeemed

(1,637,501,847)

(397,130,238)

(618,521,317)

(3,679,685)

(1,677,969)

(405,030)

Net increase (decrease)

$ (14,677,220)

$ (4,604,975)

$ 54,541,947

$ 13,831,120

$ 24,398,743

$ 3,341,705

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

From net investment income

$ 16,877,656

$ 2,818,947

$ 1,619,063

$ 497,678

$ 665,579

$ 78,704

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

From net investment income

$ 9,156,952

$ 1,438,187

$ 268,410

$ 159,020

$ 179,341

$ 23,192

See accompanying notes which are an integral part of the financial statements.

Overseas Portfolio

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 15.59

$ 10.98

$ 13.88

$ 20.00

$ 27.44

$ 20.06

Income from Investment Operations

Net investment income (loss) D

.09

.11

.10

.14

.19 E

.24

Net realized and unrealized gain (loss)

.07

4.60

(2.90)

(3.86)

(4.93)

7.95

Total from investment operations

.16

4.71

(2.80)

(3.72)

(4.74)

8.19

Distributions from net investment income

(.18)

(.10)

(.10)

(.93)

(.31)

(.31)

Distributions in excess of net investment income

-

-

-

-

(.06)

-

Distributions from net realized gain

-

-

-

(1.47)

(2.33)

(.50)

Total distributions

(.18)

(.10)

(.10)

(2.40)

(2.70)

(.81)

Redemption fees added to paid in capital D

- G

- G

- G

-

-

-

Net asset value, end of period

$ 15.57

$ 15.59

$ 10.98

$ 13.88

$ 20.00

$ 27.44

Total Return B,C,H

.99%

43.37%

(20.28)%

(21.21)%

(19.07)%

42.55%

Ratios to Average Net Assets F

Expenses before expense reductions

.88% A

.90%

.90%

.92%

.89%

.91%

Expenses net of voluntary waivers, if any

.88% A

.90%

.90%

.92%

.89%

.91%

Expenses net of all reductions

.85% A

.86%

.86%

.87%

.87%

.87%

Net investment income (loss)

1.10% A

.87%

.79%

.91%

.84%

1.10%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,430,324

$ 1,436,137

$ 1,031,489

$ 1,496,873

$ 2,267,507

$ 2,736,851

Portfolio turnover rate

83% A

99%

77%

98%

136%

78%

A Annualized B Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Investment income per share reflects a special dividend which amounted to $.04 per share. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.01 per share. H Total returns for periods of less than one year are not annualized.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 15.53

$ 10.94

$ 13.83

$ 19.94

$ 27.39

$ 20.04

Income from Investment Operations

Net investment income (loss) D

.08

.09

.09

.12

.17 E

.22

Net realized and unrealized gain (loss)

.08

4.59

(2.89)

(3.84)

(4.93)

7.94

Total from investment operations

.16

4.68

(2.80)

(3.72)

(4.76)

8.16

Distributions from net investment income

(.17)

(.09)

(.09)

(.92)

(.30)

(.31)

Distributions in excess of net investment income

-

-

-

-

(.06)

-

Distributions from net realized gain

-

-

-

(1.47)

(2.33)

(.50)

Total distributions

(.17)

(.09)

(.09)

(2.39)

(2.69)

(.81)

Redemption fees added to paid in capital D

- G

- G

- G

-

-

-

Net asset value, end of period

$ 15.52

$ 15.53

$ 10.94

$ 13.83

$ 19.94

$ 27.39

Total Return B,C,H

.99%

43.20%

(20.34)%

(21.27)%

(19.18)%

42.44%

Ratios to Average Net Assets F

Expenses before expense reductions

.99% A

1.00%

1.00%

1.03%

.99%

1.01%

Expenses net of voluntary waivers, if any

.99% A

1.00%

1.00%

1.03%

.99%

1.01%

Expenses net of all reductions

.95% A

.96%

.96%

.97%

.97%

.98%

Net investment income (loss)

1.00% A

.77%

.69%

.81%

.74%

1.00%

Supplemental Data

Net assets, end of period (000 omitted)

$ 276,537

$ 246,632

$ 177,322

$ 240,525

$ 257,257

$ 144,371

Portfolio turnover rate

83% A

99%

77%

98%

136%

78%

A Annualized B Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Investment income per share reflects a special dividend which amounted to $.04 per share. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.01 per share. H Total returns for periods of less than one year are not annualized.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 G

Selected Per-Share Data

Net asset value, beginning of period

$ 15.50

$ 10.90

$ 13.81

$ 19.91

$ 26.16

Income from Investment Operations

Net investment income (loss) E

.07

.08

.07

.10

.12 F

Net realized and unrealized gain (loss)

.07

4.58

(2.88)

(3.80)

(3.68)

Total from investment operations

.14

4.66

(2.81)

(3.70)

(3.56)

Distributions from net investment income

(.16)

(.06)

(.10)

(.93)

(.30)

Distributions in excess of net investment income

-

-

-

-

(.06)

Distributions from net realized gain

-

-

-

(1.47)

(2.33)

Total distributions

(.16)

(.06)

(.10)

(2.40)

(2.69)

Redemption fees added to paid in capital E

- I

- I

- I

-

-

Net asset value, end of period

$ 15.48

$ 15.50

$ 10.90

$ 13.81

$ 19.91

Total Return B, C, D

.87%

43.04%

(20.46)%

(21.20)%

(15.50)%

Ratios to Average Net Assets H

Expenses before expense reductions

1.14% A

1.16%

1.16%

1.18%

1.15% A

Expenses net of voluntary waivers, if any

1.14% A

1.16%

1.16%

1.18%

1.15% A

Expenses net of all reductions

1.10% A

1.12%

1.12%

1.12%

1.13% A

Net investment income (loss)

.84% A

.61%

.53%

.65%

.58% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 217,429

$ 140,822

$ 47,824

$ 48,843

$ 12,351

Portfolio turnover rate

83% A

99%

77%

98%

136%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. DTotal returns would have been lower had certain expenses not been reduced during the periods shown. ECalculated based on average shares outstanding during the period. FInvestment income per share reflects a special dividend which amounted to $.04 per share. GFor the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. IAmount represents less than $.01 per share.

Financial Highlights - Initial Class R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 15.57

$ 10.98

$ 14.05

Income from Investment Operations

Net investment income (loss) E

.09

.11

.06

Net realized and unrealized gain (loss)

.07

4.59

(3.13)

Total from investment operations

.16

4.70

(3.07)

Distributions from net investment income

(.18)

(.11)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 15.55

$ 15.57

$ 10.98

Total Return B, C, D

.99%

43.32%

(21.85)%

Ratios to Average Net Assets G

Expenses before expense reductions

.89% A

.90%

.91% A

Expenses net of voluntary waivers, if any

.89% A

.90%

.91% A

Expenses net of all reductions

.85% A

.86%

.87% A

Net investment income (loss)

1.10% A

.87%

.79% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 81,566

$ 39,466

$ 15,649

Portfolio turnover rate

83% A

99%

77%

A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Overseas Portfolio

Financial Highlights - Service Class R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 15.52

$ 10.94

$ 14.01

Income from Investment Operations

Net investment income (loss) E

.08

.10

.05

Net realized and unrealized gain (loss)

.07

4.58

(3.12)

Total from investment operations

.15

4.68

(3.07)

Distributions from net investment income

(.17)

(.10)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 15.50

$ 15.52

$ 10.94

Total Return B, C, D

.93%

43.25%

(21.91)%

Ratios to Average Net Assets G

Expenses before expense reductions

.98% A

1.00%

1.01% A

Expenses net of voluntary waivers, if any

.98% A

1.00%

1.01% A

Expenses net of all reductions

.95% A

.96%

.97% A

Net investment income (loss)

1.00% A

.77%

.69% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 72,879

$ 56,141

$ 17,997

Portfolio turnover rate

83% A

99%

77%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 15.42

$ 10.90

$ 13.96

Income from Investment Operations

Net investment income (loss) E

.07

.08

.04

Net realized and unrealized gain (loss)

.07

4.55

(3.10)

Total from investment operations

.14

4.63

(3.06)

Distributions from net investment income

(.16)

(.11)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 15.40

$ 15.42

$ 10.90

Total Return B, C, D

.87%

43.00%

(21.92)%

Ratios to Average Net Assets G

Expenses before expense reductions

1.14% A

1.15%

1.17% A

Expenses net of voluntary waivers, if any

1.14% A

1.15%

1.17% A

Expenses net of all reductions

1.10% A

1.11%

1.14% A

Net investment income (loss)

.85% A

.62%

.52% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 14,468

$ 7,072

$ 1,616

Portfolio turnover rate

83% A

99%

77%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Overseas Portfolio (the fund) is a fund of Variable Insurance Products Fund, (the trust) (referred to in this report as Fidelity Variable Insurance Products: Overseas Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares, Initial Class R shares, Service Class R shares and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class. Certain fund investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period. Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 429,755,451

|

Unrealized depreciation

(58,684,975)

Net unrealized appreciation (depreciation)

$ 371,070,476

Cost for federal income tax purposes

$ 1,846,877,860

Trading (Redemption) Fees. Initial Class R shares, Service Class R shares and Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .73% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' and Service Class R's average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 135,043

|

Service Class 2

227,199

Service Class R

33,316

Service Class 2R

11,017

$ 406,575

Overseas Portfolio

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 498,192

|

Service Class

93,197

Service Class 2

66,234

Initial Class R

18,014

Service Class R

22,187

Service Class 2R

3,074

$ 700,898

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $879,310 for the period.

Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $383,399 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $998.

8. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 15% of the total outstanding shares of the fund and three otherwise unaffiliated shareholders were the owners of record of 49% of the total outstanding shares of the fund.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research (Far East) Inc.

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

Fidelity Investments Japan Limited

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

JPMorgan Chase Bank
New York, NY

VIPOVRSR-SANN-0804
1.774855.102

Fidelity® Variable Insurance Products:

High Income Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

12

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

17

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines, call 1-800-221-5207, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

High Income Portfolio

Fidelity Variable Insurance Products: High Income Portfolio

Investment Summary

Top Five Holdings as of June 30, 2004

(by issuer, excluding cash equivalents)

% of fund's
net assets

AES Corp.

2.5

American Airlines, Inc. pass thru trust certificates

1.9

The Coastal Corp.

1.7

Lyondell Chemical Co.

1.7

CMS Energy Corp.

1.5

9.3

Top Five Market Sectors as of June 30, 2004

% of fund's
net assets

Electric Utilities

8.6

Telecommunications

8.6

Chemicals

6.3

Healthcare

6.3

Energy

5.2

Quality Diversification (% of fund's net assets) as of June 30, 2004

AAA,AA,A

0.0%

BBB

0.2%

BB

22.2%

B

55.3%

CCC,CC,C

14.3%

Not Rated

3.6%

Equities

0.3%

Other Investments

0.0%

Short-Term Investments and Net Other Assets

4.1%



We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings.

Semiannual Report

Fidelity Variable Insurance Products: High Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 92.4%

Principal
Amount

Value
(Note 1)

Convertible Bonds - 0.5%

Technology - 0.5%

Amkor Technology, Inc.:

5% 3/15/07

$ 6,100,000

$ 5,673,000

5.75% 6/1/06

2,000,000

1,920,000

7,593,000

Nonconvertible Bonds - 91.9%

Aerospace - 0.6%

BE Aerospace, Inc. 8% 3/1/08

2,415,000

2,251,988

Dunlop Standard Aerospace Holdings PLC yankee 11.875% 5/15/09

900,000

956,250

Orbital Sciences Corp. 9% 7/15/11

3,690,000

4,040,550

Primus International, Inc. 10.5% 4/15/09 (e)

3,170,000

3,138,300

10,387,088

Air Transportation - 4.8%

American Airlines, Inc. pass thru trust certificates:

6.817% 5/23/11

11,825,000

10,524,250

6.977% 11/23/22

563,436

495,824

7.324% 4/15/11

1,480,000

1,213,600

7.377% 5/23/19

15,000,622

10,500,435

7.379% 5/23/16

7,049,983

4,934,988

7.8% 4/1/08

2,595,000

2,361,450

8.608% 10/1/12

2,285,000

2,102,200

10.18% 1/2/13

2,190,000

1,598,700

AMR Corp. 10.2% 3/15/20

240,000

180,000

Continental Airlines, Inc.:

7.875% 7/2/18

5,820,000

5,412,600

8% 12/15/05

4,615,000

4,107,350

Continental Airlines, Inc. pass thru trust certificates:

6.541% 9/15/09

427,450

354,784

6.748% 9/15/18

371,735

297,388

6.795% 2/2/20

3,649,204

2,919,363

6.8% 7/2/07

228,071

187,019

6.9% 7/2/18

3,407,764

2,658,056

6.954% 2/2/11

652,786

496,117

7.73% 9/15/12

1,001,603

751,202

7.82% 4/15/15

1,393,143

1,058,789

8.307% 10/2/19

3,687,637

2,986,986

8.312% 10/2/12

2,567,514

1,899,960

8.321% 11/1/06

2,240,000

2,016,000

8.388% 5/1/22

192,884

146,592

Delta Air Lines, Inc.:

equipment trust certificates 8.54% 1/2/07

481,074

351,184

7.9% 12/15/09

2,635,000

1,317,500

10% 8/15/08

2,865,000

1,561,425

Delta Air Lines, Inc. pass thru trust certificates:

7.299% 9/18/06

615,000

375,150

7.379% 5/18/10

1,190,990

1,119,530

7.57% 11/18/10

1,350,000

1,252,853

7.779% 11/18/05

4,055,000

2,514,100

7.779% 1/2/12

480,033

259,218

Principal
Amount

Value
(Note 1)

10.06% 1/2/16

$ 1,260,000

$ 630,000

Northwest Airlines Corp. 10% 2/1/09

11,115,000

8,336,250

Northwest Airlines, Inc. pass thru trust certificates:

7.248% 7/2/14

2,150,838

1,527,095

8.304% 9/1/10

1,613,477

1,266,579

NWA Trust 10.23% 6/21/14

1,383,538

1,217,514

80,932,051

Automotive - 0.9%

Cummins, Inc. 5.65% 3/1/98

2,875,000

1,897,500

Delco Remy International, Inc. 9.375% 4/15/12 (e)

4,200,000

4,095,000

Navistar International Corp. 7.5% 6/15/11

1,310,000

1,342,750

Stoneridge, Inc. 11.5% 5/1/12

2,715,000

3,162,975

Visteon Corp.:

7% 3/10/14

3,000,000

2,891,250

8.25% 8/1/10

1,505,000

1,606,588

14,996,063

Banks and Thrifts - 0.2%

Chevy Chase Bank FSB 6.875% 12/1/13

1,135,000

1,135,000

Western Financial Bank 9.625% 5/15/12

1,565,000

1,705,850

2,840,850

Broadcasting - 1.3%

Granite Broadcasting Corp. 9.75% 12/1/10 (e)

8,775,000

8,116,875

Nexstar Finance, Inc. 7% 1/15/14

1,360,000

1,278,400

Sinclair Broadcast Group, Inc. 8% 3/15/12

3,665,000

3,747,463

Spanish Broadcasting System, Inc. 9.625% 11/1/09

2,655,000

2,801,025

XM Satellite Radio, Inc. 6.65% 5/1/09 (e)(f)

5,340,000

5,353,350

21,297,113

Building Materials - 1.7%

FastenTech, Inc. 11.5% 5/1/11 (e)

2,000,000

2,200,000

FIMEP SA 10.5% 2/15/13

10,815,000

12,315,581

General Cable Corp. 9.5% 11/15/10

3,645,000

3,909,263

Jacuzzi Brands, Inc. 9.625% 7/1/10

3,625,000

3,878,750

Juno Lighting, Inc. 11.875% 7/1/09

1,460,000

1,547,600

Texas Industries, Inc. 10.25% 6/15/11

4,860,000

5,406,750

29,257,944

Cable TV - 3.1%

Cablevision Systems Corp.:

5.66% 4/1/09 (e)(f)

8,870,000

9,069,575

8% 4/15/12 (e)

3,710,000

3,663,625

Charter Communications Holding II LLC/Charter Communications Holdings II Capital Corp. 10.25% 9/15/10 (e)

3,205,000

3,237,050

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Cable TV - continued

Charter Communications Operating LLC/Charter Communications Operating Capital Corp.:

8% 4/30/12 (e)

$ 1,755,000

$ 1,693,575

8.375% 4/30/14 (e)

1,940,000

1,872,100

EchoStar DBS Corp. 5.75% 10/1/08

7,570,000

7,446,988

GCI, Inc. 7.25% 2/15/14 (e)

3,425,000

3,262,313

Insight Midwest LP/Insight Capital, Inc. 10.5% 11/1/10

1,475,000

1,611,438

Mediacom LLC/Mediacom Capital Corp.:

7.875% 2/15/11

3,110,000

2,985,600

8.5% 4/15/08

1,180,000

1,185,900

NTL Cable PLC:

6.14% 10/15/12 (e)(f)

3,010,000

3,092,775

8.75% 4/15/14 (e)

7,635,000

7,844,963

Telenet Group Holding NV 0% 6/15/14 (d)(e)

8,560,000

5,435,600

Telewest PLC 11% 10/1/07 (c)

735,000

437,325

52,838,827

Capital Goods - 2.1%

Amsted Industries, Inc. 10.25% 10/15/11 (e)

410,000

440,750

Columbus McKinnon Corp. 10% 8/1/10

2,280,000

2,416,800

Dresser, Inc. 9.375% 4/15/11

7,700,000

8,239,000

Invensys PLC 9.875% 3/15/11 (e)

12,445,000

12,445,000

Leucadia National Corp. 7% 8/15/13

5,740,000

5,661,075

Sensus Metering Systems, Inc. 8.625% 12/15/13 (e)

3,370,000

3,235,200

SPX Corp. 7.5% 1/1/13

3,685,000

3,749,488

36,187,313

Chemicals - 6.3%

BCP Caylux Holdings Luxembourg SCA 9.625% 6/15/14 (e)

10,040,000

10,416,500

Equistar Chemicals LP/Equistar Funding Corp.:

8.75% 2/15/09

3,590,000

3,742,575

10.125% 9/1/08

2,905,000

3,173,713

10.625% 5/1/11

9,495,000

10,539,450

HMP Equity Holdings Corp.:

0% 5/15/08 (e)

1,745,000

1,012,100

0% 5/15/08 unit (e)

4,800,000

3,696,000

Huntsman ICI Chemicals LLC 10.125% 7/1/09

6,405,000

6,501,075

Huntsman ICI Holdings LLC 0% 12/31/09

8,015,000

3,887,275

Huntsman International LLC 9.875% 3/1/09

4,700,000

5,029,000

Huntsman LLC:

8.8% 7/15/11 (e)(f)

5,700,000

5,757,000

11.5% 7/15/12 (e)

2,830,000

2,858,300

Lyondell Chemical Co.:

9.5% 12/15/08

12,345,000

12,869,663

9.625% 5/1/07

2,610,000

2,714,400

Principal
Amount

Value
(Note 1)

9.875% 5/1/07

$ 4,770,000

$ 4,984,650

10.875% 5/1/09

6,965,000

7,261,013

Millennium America, Inc.:

9.25% 6/15/08

8,210,000

8,702,600

9.25% 6/15/08 (e)

3,645,000

3,863,700

Nalco Co. 8.875% 11/15/13 (e)

3,090,000

3,229,050

Rhodia SA:

7.625% 6/1/10 (e)

2,105,000

1,836,613

10.25% 6/1/10 (e)

4,190,000

4,231,900

106,306,577

Consumer Products - 1.3%

Jostens Holding Corp. 0% 12/1/13 (d)

3,030,000

2,060,400

Samsonite Corp. 8.875% 6/1/11 (e)

2,785,000

2,812,850

Sealy Mattress Co. 8.25% 6/15/14 (e)

6,095,000

6,110,238

The Hockey Co. 11.25% 4/15/09

6,395,000

7,482,150

WH Holdings Ltd./WH Capital Corp. 9.5% 4/1/11 (e)

3,075,000

3,198,000

21,663,638

Containers - 3.1%

Anchor Glass Container Corp. 11% 2/15/13

4,700,000

5,358,000

Berry Plastics Corp. 10.75% 7/15/12

3,700,000

4,088,500

BWAY Corp. 10% 10/15/10

6,200,000

6,572,000

Crown European Holdings SA:

9.5% 3/1/11

1,405,000

1,534,963

10.875% 3/1/13

7,905,000

9,051,225

Owens-Brockway Glass Container, Inc.:

8.25% 5/15/13

3,070,000

3,162,100

8.875% 2/15/09

3,655,000

3,929,125

Owens-Illinois, Inc.:

7.35% 5/15/08

195,000

194,513

7.5% 5/15/10

6,280,000

6,138,700

7.8% 5/15/18

575,000

518,938

8.1% 5/15/07

6,000,000

6,180,000

Pliant Corp.:

0% 6/15/09 (d)

4,335,000

3,641,400

11.125% 9/1/09

1,470,000

1,580,250

51,949,714

Diversified Financial Services - 0.2%

E*TRADE Financial Corp. 8% 6/15/11 (e)

4,290,000

4,268,550

Diversified Media - 1.2%

Corus Entertainment, Inc. 8.75% 3/1/12

6,140,000

6,562,125

LBI Media Holdings, Inc. 0% 10/15/13 (d)

6,440,000

4,572,400

LBI Media, Inc. 10.125% 7/15/12

3,285,000

3,662,775

PEI Holdings, Inc. 11% 3/15/10

4,361,000

5,058,760

19,856,060

Electric Utilities - 7.4%

AES Corp.:

7.75% 3/1/14

6,610,000

6,345,600

8.375% 8/15/07

6,315,000

6,378,150

8.5% 11/1/07

2,930,000

3,003,250

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Electric Utilities - continued

AES Corp.: - continued

8.75% 6/15/08

$ 4,178,000

$ 4,345,120

8.75% 5/15/13 (e)

610,000

652,700

8.875% 2/15/11

11,741,000

12,195,964

9.375% 9/15/10

6,388,000

6,819,190

9.5% 6/1/09

1,499,000

1,602,056

AES Gener SA 7.5% 3/25/14 (e)

6,200,000

5,921,000

CMS Energy Corp.:

7.5% 1/15/09

9,190,000

9,178,513

7.75% 8/1/10 (e)

3,590,000

3,581,025

8.5% 4/15/11

3,515,000

3,602,875

8.9% 7/15/08

3,400,000

3,574,250

9.875% 10/15/07

4,305,000

4,644,019

Cogentrix Energy, Inc. 8.75% 10/15/08

5,310,000

5,548,950

Midland Funding Corp. II 11.75% 7/23/05

3,904,042

4,040,684

Midwest Generation LLC/Midwest Finance Corp. 8.75% 5/1/34 (e)

4,760,000

4,807,600

MSW Energy Holdings II LLC/MSW Finance Co. II, Inc. 7.375% 9/1/10 (e)

1,720,000

1,720,000

MSW Energy Holdings LLC/MSW Energy Finance Co., Inc. 8.5% 9/1/10

3,735,000

3,921,750

NRG Energy, Inc. 8% 12/15/13 (e)

13,700,000

13,802,750

Sierra Pacific Power Co. 6.25% 4/15/12 (e)

1,680,000

1,575,000

Sierra Pacific Resources 8.625% 3/15/14 (e)

3,915,000

3,807,338

TECO Energy, Inc.:

7% 5/1/12

2,965,000

2,842,694

7.2% 5/1/11

11,040,000

10,819,200

124,729,678

Energy - 5.2%

ANR Pipeline, Inc. 9.625% 11/1/21

1,475,000

1,644,625

El Paso Energy Corp.:

6.75% 5/15/09

2,100,000

1,908,375

6.95% 12/15/07

3,140,000

3,022,250

El Paso Production Holding Co. 7.75% 6/1/13

2,695,000

2,492,875

Hanover Compressor Co.:

0% 3/31/07

5,595,000

4,420,050

8.625% 12/15/10

1,450,000

1,504,375

9% 6/1/14

2,540,000

2,635,250

Hilcorp Energy I LP/Hilcorp Finance Co. 10.5% 9/1/10 (e)

5,810,000

6,231,225

OAO Gazprom 9.625% 3/1/13 (e)

4,860,000

4,993,650

Pecom Energia SA 9% 5/1/09
(Reg. S)

2,320,000

2,273,600

Pride International, Inc. 7.375% 7/15/14 (e) (g)

5,920,000

5,986,600

Range Resources Corp.:

7.375% 7/15/13

6,880,000

6,845,600

Principal
Amount

Value
(Note 1)

7.375% 7/15/13 (e)

$ 1,870,000

$ 1,860,650

SESI LLC 8.875% 5/15/11

740,000

797,350

Sonat, Inc.:

6.625% 2/1/08

3,000,000

2,748,750

6.75% 10/1/07

1,290,000

1,223,888

7.625% 7/15/11

6,665,000

5,915,188

Tennessee Gas Pipeline Co. 7.5% 4/1/17

1,350,000

1,299,375

The Coastal Corp.:

6.375% 2/1/09

6,055,000

5,320,831

6.5% 5/15/06

2,210,000

2,174,088

6.5% 6/1/08

8,170,000

7,353,000

7.5% 8/15/06

4,625,000

4,578,750

7.75% 6/15/10

11,464,000

10,346,260

87,576,605

Entertainment/Film - 0.4%

Cinemark, Inc. 0% 3/15/14 (d)(e)

10,855,000

7,082,888

Environmental - 1.0%

Allied Waste North America, Inc.:

5.75% 2/15/11 (e)

5,385,000

5,102,288

6.375% 4/15/11 (e)

3,890,000

3,812,200

8.5% 12/1/08

3,690,000

4,036,122

8.875% 4/1/08

3,725,000

4,060,250

17,010,860

Food and Drug Retail - 2.4%

Ahold Finance USA, Inc.:

6.25% 5/1/09

6,415,000

6,270,663

8.25% 7/15/10

10,670,000

11,203,500

Rite Aid Corp.:

6.875% 8/15/13

6,850,000

6,336,250

9.25% 6/1/13

7,145,000

7,537,975

9.5% 2/15/11

4,170,000

4,587,000

Stater Brothers Holdings, Inc. 8.125% 6/15/12 (e)

4,020,000

4,055,175

39,990,563

Food/Beverage/Tobacco - 1.7%

Del Monte Corp. 9.25% 5/15/11

4,215,000

4,604,888

Doane Pet Care Co. 9.75% 5/15/07

3,466,000

3,240,710

Dole Food Co., Inc. 7.25% 6/15/10

8,125,000

7,942,188

National Beef Packing Co. LLC/National Beef Finance Corp. 10.5% 8/1/11

5,655,000

5,909,475

Smithfield Foods, Inc.:

7.625% 2/15/08

1,800,000

1,872,000

7.75% 5/15/13

865,000

912,575

8% 10/15/09

680,000

727,600

Swift & Co. 10.125% 10/1/09

3,685,000

3,906,100

29,115,536

Gaming - 1.4%

Chumash Casino & Resort Enterprise 9% 7/15/10 (e)

1,740,000

1,890,075

MTR Gaming Group, Inc. 9.75% 4/1/10

3,605,000

3,875,375

Park Place Entertainment Corp. 7.875% 3/15/10

2,165,000

2,251,600

Resorts International Hotel & Casino, Inc. 11.5% 3/15/09

1,055,000

1,181,600

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Gaming - continued

Seneca Gaming Corp. 7.25% 5/1/12 (e)

$ 3,140,000

$ 3,136,075

Venetian Casino Resort LLC/Las Vegas Sands, Inc. 11% 6/15/10

2,985,000

3,447,675

Wheeling Island Gaming, Inc. 10.125% 12/15/09

6,730,000

7,133,800

22,916,200

Healthcare - 6.3%

AmeriPath, Inc. 10.5% 4/1/13

10,195,000

10,322,438

AmerisourceBergen Corp.:

7.25% 11/15/12

5,370,000

5,477,400

8.125% 9/1/08

620,000

666,500

Biovail Corp. yankee 7.875% 4/1/10

7,010,000

6,887,325

Concentra Operating Corp.:

9.125% 6/1/12 (e)

800,000

836,000

9.5% 8/15/10

2,145,000

2,284,425

Fisher Scientific International, Inc.:

8% 9/1/13

2,870,000

3,070,900

8.125% 5/1/12

875,000

934,063

Genesis HealthCare Corp. 8% 10/15/13 (e)

5,650,000

5,805,375

HealthSouth Corp.:

8.375% 10/1/11

2,545,000

2,462,288

8.5% 2/1/08

2,545,000

2,500,463

Mariner Health Care, Inc. 8.25% 12/15/13 (e)

6,030,000

6,090,300

Omega Healthcare Investors, Inc. 7% 4/1/14 (e)

3,970,000

3,731,800

PacifiCare Health Systems, Inc. 10.75% 6/1/09

5,205,000

5,933,700

PerkinElmer, Inc. 8.875% 1/15/13

6,665,000

7,281,513

Psychiatric Solutions, Inc. 10.625% 6/15/13

6,335,000

7,221,900

Senior Housing Properties Trust:

7.875% 4/15/15

2,320,000

2,372,200

8.625% 1/15/12

7,850,000

8,517,250

Tenet Healthcare Corp.:

6.375% 12/1/11

12,225,000

10,513,500

7.375% 2/1/13

5,085,000

4,627,350

Triad Hospitals, Inc. 7% 5/15/12 (e)

3,270,000

3,286,350

UAP Holding Corp. 0% 7/15/12 (d)(e)

6,050,000

4,719,000

105,542,040

Homebuilding/Real Estate - 3.9%

American Real Estate Partners/American Real Estate Finance Corp. 8.125% 6/1/12 (e)

8,230,000

8,394,600

Beazer Homes USA, Inc.:

6.5% 11/15/13

860,000

812,700

8.375% 4/15/12

4,080,000

4,314,600

K. Hovnanian Enterprises, Inc.:

6.5% 1/15/14

3,595,000

3,325,375

8.875% 4/1/12

3,040,000

3,222,400

KB Home:

7.75% 2/1/10

9,585,000

9,872,550

8.625% 12/15/08

1,310,000

1,401,700

Principal
Amount

Value
(Note 1)

Meritage Corp. 7% 5/1/14

$ 3,370,000

$ 3,201,500

Standard Pacific Corp.:

5.125% 4/1/09

3,030,000

2,863,350

6.5% 10/1/08

2,510,000

2,522,550

6.875% 5/15/11

2,080,000

2,038,400

Technical Olympic USA, Inc.:

7.5% 3/15/11

5,110,000

4,701,200

9% 7/1/10

1,110,000

1,132,200

10.375% 7/1/12

4,125,000

4,290,000

WCI Communities, Inc. 7.875% 10/1/13

4,285,000

4,338,563

William Lyon Homes, Inc.:

7.5% 2/15/14 (e)

5,645,000

5,320,413

10.75% 4/1/13

3,515,000

3,866,500

65,618,601

Hotels - 0.3%

Host Marriott LP 7.125% 11/1/13

5,655,000

5,541,900

Insurance - 0.6%

Crum & Forster Holdings Corp. 10.375% 6/15/13

6,290,000

6,808,925

TIG Capital Trust I 8.597% 1/15/27 (e)

4,955,000

4,063,100

10,872,025

Leisure - 3.0%

Royal Caribbean Cruises Ltd.:

6.875% 12/1/13

2,050,000

2,024,375

8% 5/15/10

3,285,000

3,531,375

Six Flags, Inc.:

8.875% 2/1/10

11,320,000

11,263,400

9.75% 4/15/13

4,240,000

4,261,200

Speedway Motorsports, Inc.:

6.75% 6/1/13

2,475,000

2,499,750

6.75% 6/1/13 (e)

5,120,000

5,171,200

Town Sports International Holdings, Inc. 0% 2/1/14 (d)(e)

3,870,000

1,741,500

Town Sports International, Inc. 9.625% 4/15/11

8,980,000

8,710,600

Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10

9,820,000

11,366,650

50,570,050

Metals/Mining - 1.9%

Arch Western Finance LLC 6.75% 7/1/13 (e)

470,000

470,000

Compass Minerals International, Inc.:

0% 12/15/12 (d)

5,940,000

4,692,600

0% 6/1/13 (d)

9,470,000

7,291,900

CONSOL Energy, Inc. 7.875% 3/1/12

975,000

1,004,250

Freeport-McMoRan Copper & Gold, Inc. 10.125% 2/1/10

10,025,000

11,127,750

Peabody Energy Corp. 6.875% 3/15/13

3,440,000

3,483,000

Wise Metals Group LLC/Alloys Finance 10.25% 5/15/12 (e)

3,130,000

3,208,250

31,277,750

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Paper - 3.8%

Abitibi-Consolidated, Inc.:

5.02% 6/15/11 (e)(f)

$ 2,830,000

$ 2,861,838

7.75% 6/15/11 (e)

2,830,000

2,844,150

Bowater, Inc. 4.52% 3/15/10 (f)

4,620,000

4,637,325

Buckeye Technologies, Inc. 8.5% 10/1/13

3,825,000

3,882,375

Cellu Tissue Holdings, Inc. 9.75% 3/15/10 (e)

2,620,000

2,515,200

Georgia-Pacific Corp.:

8% 1/15/14

3,730,000

4,037,725

8.125% 5/15/11

2,070,000

2,282,175

8.875% 2/1/10

1,465,000

1,659,113

9.375% 2/1/13

2,620,000

2,993,350

Graphic Packaging International, Inc. 8.5% 8/15/11

1,205,000

1,289,350

Norske Skog Canada Ltd.:

7.375% 3/1/14

2,040,000

1,968,600

8.625% 6/15/11

10,765,000

11,410,900

Stone Container Corp.:

8.375% 7/1/12

8,805,000

9,201,225

9.75% 2/1/11

2,195,000

2,414,500

Tembec Industries, Inc.:

7.75% 3/15/12

1,095,000

1,056,675

8.5% 2/1/11

4,755,000

4,802,550

yankee 8.625% 6/30/09

4,700,000

4,758,750

64,615,801

Publishing/Printing - 0.9%

Houghton Mifflin Co.:

8.25% 2/1/11

2,615,000

2,628,075

9.875% 2/1/13

4,835,000

4,847,088

The Reader's Digest Association, Inc. 6.5% 3/1/11

7,270,000

7,142,775

14,617,938

Railroad - 1.7%

Kansas City Southern Railway Co.:

7.5% 6/15/09

13,155,000

13,155,000

9.5% 10/1/08

150,000

161,250

TFM SA de CV yankee 11.75% 6/15/09

14,915,000

14,616,700

27,932,950

Restaurants - 0.2%

Friendly Ice Cream Corp. 8.375% 6/15/12 (e)

3,165,000

3,085,875

Services - 1.2%

Cornell Companies, Inc. 10.75% 7/1/12 (e)

2,880,000

2,952,000

Iron Mountain, Inc.:

6.625% 1/1/16

2,465,000

2,230,825

8.625% 4/1/13

3,035,000

3,217,100

JohnsonDiversey Holdings, Inc. 0% 5/15/13 (d)

3,210,000

2,471,700

Principal
Amount

Value
(Note 1)

UGS Corp. 10% 6/1/12 (e)

$ 5,630,000

$ 5,967,800

United Rentals North America, Inc. 7.75% 11/15/13

3,980,000

3,761,100

20,600,525

Shipping - 4.9%

CHC Helicopter Corp. 7.375% 5/1/14 (e)

2,410,000

2,349,750

General Maritime Corp. 10% 3/15/13

6,680,000

7,398,100

Horizon Lines LLC 9% 11/1/12 (e)

1,540,000

1,568,875

OMI Corp. 7.625% 12/1/13

9,225,000

9,040,500

Overseas Shipholding Group, Inc. 8.25% 3/15/13

4,745,000

5,077,150

Ship Finance International Ltd. 8.5% 12/15/13 (e)

25,180,000

24,298,678

Teekay Shipping Corp. 8.875% 7/15/11

17,723,000

19,495,300

United Rentals North America, Inc.:

6.5% 2/15/12

11,130,000

10,517,850

7% 2/15/14

2,335,000

2,083,988

81,830,191

Steels - 2.8%

AK Steel Corp.:

7.75% 6/15/12

3,070,000

2,763,000

7.875% 2/15/09

2,600,000

2,418,000

Allegheny Technologies, Inc. 8.375% 12/15/11

6,820,000

6,854,100

CSN Islands VII Corp. 10.75% 9/12/08 (e)

5,755,000

5,970,813

CSN Islands VIII Corp. 9.75% 12/16/13 (e)

3,100,000

2,790,000

Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11

10,130,000

11,218,975

International Steel Group, Inc. 6.5% 4/15/14 (e)

6,460,000

6,040,100

Ispat Inland ULC 9.75% 4/1/14 (e)

8,655,000

8,914,650

46,969,638

Super Retail - 2.0%

Asbury Automotive Group, Inc.:

8% 3/15/14

2,910,000

2,779,050

9% 6/15/12

8,545,000

8,673,175

Barneys, Inc. 9% 4/1/08

4,290,000

4,461,600

J. Crew Intermediate LLC 0% 5/15/08 (d)

4,205,000

3,616,300

Nebraska Book Co., Inc. 8.625% 3/15/12

2,530,000

2,479,400

Sonic Automotive, Inc. 8.625% 8/15/13

3,750,000

3,890,625

Toys 'R' US, Inc. 7.875% 4/15/13

8,735,000

8,691,325

34,591,475

Supermarkets - 0.3%

Stater Brothers Holdings, Inc. 5.06% 6/15/10 (e)(f)

5,470,000

5,558,888

Technology - 3.5%

Amkor Technology, Inc.:

7.125% 3/15/11 (e)

5,490,000

5,119,425

7.75% 5/15/13

3,385,000

3,190,363

Corporate Bonds - continued

Principal
Amount

Value
(Note 1)

Nonconvertible Bonds - continued

Technology - continued

Celestica, Inc. 7.875% 7/1/11

$ 5,700,000

$ 5,785,500

Flextronics International Ltd. 6.5% 5/15/13

7,845,000

7,629,263

Lucent Technologies, Inc.:

5.5% 11/15/08

7,675,000

7,233,688

6.45% 3/15/29

2,935,000

2,245,275

United Agriculture Products, Inc. 8.25% 12/15/11 (e)

5,470,000

5,934,950

Viasystems, Inc. 10.5% 1/15/11 (e)

2,880,000

3,038,400

Xerox Capital Trust I 8% 2/1/27

5,940,000

5,435,100

Xerox Corp. 7.625% 6/15/13

12,590,000

12,904,750

58,516,714

Telecommunications - 8.3%

Alaska Communications Systems Holdings, Inc. 9.375% 5/15/09

3,825,000

3,853,688

American Cellular Corp. 10% 8/1/11

5,440,000

4,732,800

Centennial Cellular Operating Co. LLC/Centennial Finance Corp. 10.75% 12/15/08

6,413,000

6,637,455

Centennial Communications Corp./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (e)

5,060,000

4,693,150

Cincinnati Bell, Inc. 8.375% 1/15/14

790,000

707,050

Crown Castle International Corp. 7.5% 12/1/13

3,170,000

3,138,300

Empresa Brasil de Telecomm SA 11% 12/15/08 (e)

5,405,000

5,837,400

Eschelon Operating Co. 8.375% 3/15/10

4,470,000

3,665,400

Innova S. de R.L. 9.375% 9/19/13

9,160,000

9,618,000

Millicom International Cellular SA 10% 12/1/13 (e)

13,140,000

13,271,400

Nextel Communications, Inc.:

5.95% 3/15/14

2,285,000

2,102,200

6.875% 10/31/13

13,240,000

13,041,400

Primus Telecommunications Group, Inc. 8% 1/15/14

4,605,000

3,960,300

Qwest Capital Funding, Inc. 7% 8/3/09

4,405,000

3,920,450

Qwest Corp. 9.125% 3/15/12 (e)

8,605,000

9,293,400

Qwest Services Corp.:

13.5% 12/15/10 (e)

14,550,000

16,878,000

14% 12/15/14 (e)

6,380,000

7,624,100

Rogers Wireless, Inc.:

6.375% 3/1/14

3,975,000

3,647,063

9.625% 5/1/11

7,345,000

8,189,675

Triton PCS, Inc.:

8.5% 6/1/13

835,000

789,075

8.75% 11/15/11

5,490,000

4,529,250

9.375% 2/1/11

2,310,000

1,975,050

U.S. West Capital Funding, Inc. 6.375% 7/15/08

3,985,000

3,566,575

Principal
Amount

Value
(Note 1)

U.S. West Communications:

7.2% 11/10/26

$ 895,000

$ 769,700

7.5% 6/15/23

3,535,000

3,110,800

139,551,681

TOTAL NONCONVERTIBLE BONDS

1,548,498,160

TOTAL CORPORATE BONDS

(Cost $1,534,663,581)

1,556,091,160

Commercial Mortgage Securities - 0.3%

Banc of America Commercial Mortgage, Inc. Series 2003-2:

Class BWD, 6.947% 10/11/37 (e)

616,000

588,856

Class BWE, 7.226% 10/11/37 (e)

833,000

796,260

Class BWF, 7.55% 10/11/37 (e)

735,376

702,859

Class BWG, 8.155% 10/11/37 (e)

711,258

673,919

Class BWH, 9.073% 10/11/37 (e)

372,000

358,428

Class BWJ, 9.99% 10/11/37 (e)

615,000

592,206

Class BWK, 10.676% 10/11/37 (e)

479,000

459,860

Class BWL, 10.1596% 10/11/37 (e)

799,000

706,456

LB Multi-family Mortgage Trust Series 1991-4 Class A1, 6.9944% 4/25/21 (e)(f)

261,068

232,351

TOTAL COMMERCIAL MORTGAGE SECURITIES

(Cost $5,103,373)

5,111,195

Common Stocks - 0.1%

Shares

Homebuilding/Real Estate - 0.1%

Swerdlow Real Estate Group LLC (a)(h)

159,600

1,462,415

Super Retail - 0.0%

Barneys, Inc. warrants 4/1/08 (a)

5,020

175,700

Textiles & Apparel - 0.0%

Arena Brands Holding Corp. Class B (h)

48,889

590,579

TOTAL COMMON STOCKS

(Cost $5,402,020)

2,228,694

Nonconvertible Preferred Stocks - 0.2%

Broadcasting - 0.2%

Granite Broadcasting Corp. 12.75% pay-in-kind (a)

5,005

2,802,800

Cable TV - 0.0%

PTV, Inc. Series A, 10.00%

377

3,016

TOTAL NONCONVERTIBLE PREFERRED
STOCKS

(Cost $3,248,629)

2,805,816

Floating Rate Loans - 2.9%

Principal
Amount

Value
(Note 1)

Cable TV - 0.7%

Hilton Head Communications LP Tranche B term loan 5.5% 3/31/08 (f)

$ 7,000,000

$ 6,702,500

Olympus Cable Holdings LLC Tranche A term loan 5.5% 6/30/10 (f)

5,500,000

5,307,500

12,010,000

Electric Utilities - 1.2%

Allegheny Energy Supply Co. LLC Tranche C term loan 5.6228% 6/8/11 (f)

4,400,000

4,477,000

Astoria Energy LLC term loan:

6.8518% 4/15/12 (f)

5,200,000

5,252,000

10.3363% 4/15/12 (f)

3,340,000

3,431,850

Riverside Energy Center LLC:

Credit-Linked Deposit 6.02% 6/24/11 (f)

284,611

285,678

term loan 6.02% 6/24/11 (f)

6,415,389

6,439,447

19,885,975

Hotels - 0.7%

Wyndham International, Inc. term loan:

5.9375% 6/30/06 (f)

10,005,783

9,880,710

6.9375% 4/1/06 (f)

2,222,659

2,217,103

12,097,813

Telecommunications - 0.3%

Qwest Corp. Tranche B term loan 6.95% 6/30/10 (f)

4,500,000

4,443,750

TOTAL FLOATING RATE LOANS

(Cost $46,428,644)

48,437,538

Money Market Funds - 2.8%

Shares

Fidelity Cash Central Fund, 1.16% (b)
(Cost $47,944,081)

47,944,081

47,944,081

Cash Equivalents - 0.9%

Maturity
Amount

Value
(Note 1)

Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.3%, dated 6/30/04 due 7/1/04)
(Cost $15,113,000)

$ 15,113,545

$ 15,113,000

TOTAL INVESTMENT PORTFOLIO - 99.6%

(Cost $1,657,903,328)

1,677,731,484

NET OTHER ASSETS - 0.4%

6,697,313

NET ASSETS - 100%

$ 1,684,428,797

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments.

(d) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end.

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $418,863,016 or 24.9% of net assets.

(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(g) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(h) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,052,994 or 0.1% of net assets.

Additional information on each holding is as follows:

Security

Acquisition Date

Acquisition Cost

Arena Brands Holding Corp. Class B

6/18/97

$ 1,974,627

Swerdlow Real Estate Group LLC

1/15/99

$ 7,697,348

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,236,906,557 and $1,587,548,635, respectively.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $18,879,667. The weighted average interest rate was 1.13%. Interest expense includes $7,133 paid under the interfund lending program. At period end there were no interfund loans outstanding.

The fund participated in the bank borrowing program. The average daily loan balance during the period for which loans were outstanding amounted to $5,077,500. The weighted average interest rate was 1.25%. Interest expense includes $352 paid under the bank borrowing program. At period end, there were no bank borrowings outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America

83.8%

Canada

5.1%

Marshall Islands

2.1%

France

1.7%

United Kingdom

1.5%

Mexico

1.5%

Luxembourg

1.4%

Others (individually less than 1%)

2.9%

100.0%

The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $48,437,538 or 2.9% of net assets.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $1,222,565,000 of which $361,530,000, $772,554,000 and $88,481,000 will expire on December 31, 2008, 2009 and 2010, respectively.

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Fidelity Variable Insurance Products: High Income Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $15,113,000) (cost $1,657,903,328) - See accompanying schedule

$ 1,677,731,484

Receivable for investments sold

44,535,953

Receivable for fund shares sold

133,689

Interest receivable

29,246,187

Prepaid expenses

4,646

Other receivables

27,534

Total assets

1,751,679,493

Liabilities

Payable to custodian bank

$ 3,734

Payable for investments purchased

Regular delivery

58,328,576

Delayed delivery

5,888,861

Payable for fund shares redeemed

1,962,438

Accrued management fee

806,598

Distribution fees payable

40,451

Other affiliated payables

149,055

Other payables and accrued expenses

70,983

Total liabilities

67,250,696

Net Assets

$ 1,684,428,797

Net Assets consist of:

Paid in capital

$ 2,747,239,891

Undistributed net investment income

79,363,058

Accumulated undistributed net realized gain (loss) on investments

(1,162,002,875)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

19,828,723

Net Assets

$ 1,684,428,797

Calculation of Maximum Offering Price

Initial Class:
Net Asset Value, offering price and redemption price per share ($1,292,435,434 ÷ 201,076,965 shares)

$ 6.43

Service Class:
Net Asset Value, offering price and redemption price per share ($327,082,698 ÷ 51,081,390 shares)

$ 6.40

Service Class 2:
Net Asset Value, offering price and redemption price per share ($64,687,377 ÷ 10,190,774 shares)

$ 6.35

Initial Class R:
Net Asset Value, offering price and redemption price per share ($74,448 ÷ 11,592 shares)

$ 6.42

Service Class R:
Net Asset Value, offering price and redemption price per share ($74,433 ÷ 11,628 shares)

$ 6.40

Service Class 2R:
Net Asset Value, offering price and redemption price per share ($74,407 ÷ 11,719 shares)

$ 6.35

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 732,961

Interest

76,126,361

Total income

76,859,322

Expenses

Management fee

$ 5,364,801

Transfer agent fees

628,211

Distribution fees

275,849

Accounting fees and expenses

353,362

Non-interested trustees' compensation

4,798

Custodian fees and expenses

32,074

Registration fees

4,070

Audit

33,201

Legal

8,989

Interest

7,485

Miscellaneous

52,357

Total expenses before reductions

6,765,197

Expense reductions

(896)

6,764,301

Net investment income (loss)

70,095,021

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

62,024,615

Change in net unrealized appreciation (depreciation) on:

Investment securities

(119,300,805)

Assets and liabilities in foreign currencies

60

Total change in net unrealized appreciation (depreciation)

(119,300,745)

Net gain (loss)

(57,276,130)

Net increase (decrease) in net assets resulting from operations

$ 12,818,891

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 70,095,021

$ 147,560,195

Net realized gain (loss)

62,024,615

93,505,636

Change in net unrealized appreciation (depreciation)

(119,300,745)

182,813,372

Net increase (decrease) in net assets resulting from operations

12,818,891

423,879,203

Distributions to shareholders from net investment income

(155,517,698)

(110,937,981)

Share transactions - net increase (decrease)

(260,897,261)

336,533,161

Total increase (decrease) in net assets

(403,596,068)

649,474,383

Net Assets

Beginning of period

2,088,024,865

1,438,550,482

End of period (including undistributed net investment income of $79,363,058 and undistributed net investment income of $164,989,590, respectively)

$ 1,684,428,797

$ 2,088,024,865

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R A

Service Class R A

Service Class 2R A

Shares

Sold

27,421,158

14,128,861

5,151,567

11,592

11,628

11,719

Reinvested

18,412,464

4,720,558

928,353

-

-

-

Redeemed

(74,123,823)

(28,184,527)

(7,010,199)

-

-

-

Net increase (decrease)

(28,290,201)

(9,335,108)

(930,279)

11,592

11,628

11,719

Dollars

Sold

$ 179,057,763

$ 92,291,089

$ 33,350,440

$ 75,000

$ 75,000

$ 75,000

Reinvested

119,128,639

30,447,599

5,941,460

-

-

-

Redeemed

(490,664,314)

(185,476,858)

(45,198,079)

-

-

-

Net increase (decrease)

$ (192,477,912)

$ (62,738,170)

$ (5,906,179)

$ 75,000

$ 75,000

$ 75,000

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

Shares

Sold

187,111,620

59,201,139

17,709,351

-

-

-

Reinvested

15,863,052

3,574,368

424,961

-

-

-

Redeemed

(166,651,099)

(46,461,897)

(12,553,214)

-

-

-

Net increase (decrease)

36,323,573

16,313,610

5,581,098

-

-

-

Dollars

Sold

$ 1,162,830,605

$ 370,826,801

$ 111,025,684

$ -

$ -

$ -

Reinvested

88,674,463

19,909,232

2,354,286

-

-

-

Redeemed

(1,045,910,689)

(293,649,573)

(79,527,648)

-

-

-

Net increase (decrease)

$ 205,594,379

$ 97,086,460

$ 33,852,322

$ -

$ -

$ -

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R A

Service Class R A

Service Class 2R A

From net investment income

$ 119,128,639

$ 30,447,599

$ 5,941,460

$ -

$ -

$ -

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

From net investment income

$ 88,674,463

$ 19,909,232

$ 2,354,286

$ -

$ -

$ -

A For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 6.95

$ 5.93

$ 6.41

$ 8.18

$ 11.32

$ 11.53

Income from Investment Operations

Net investment income (loss) E

.248

.520

.496 H

.774 G, H

1.123

1.095

Net realized and unrealized gain (loss)

(.198)

.980

(.306) H

(1.544) G, H

(3.513)

(.195)

Total from investment operations

.050

1.500

.190

(.770)

(2.390)

.900

Distributions from net investment income

(.570)

(.480)

(.670)

(1.000)

(.750)

(1.075)

Distributions from net realized gain

-

-

-

-

-

(.030)

Distributions in excess of net realized gain

-

-

-

-

-

(.005)

Total distributions

(.570)

(.480)

(.670)

(1.000)

(.750)

(1.110)

Net asset value, end of period

$ 6.43

$ 6.95

$ 5.93

$ 6.41

$ 8.18

$ 11.32

Total Return B, C, D

.67%

27.26%

3.44%

(11.73)%

(22.54)%

8.25%

Ratios to Average Net Assets F

Expenses before expense reductions

.70% A

.69%

.70%

.71%

.68%

.69%

Expenses net of voluntary waivers, if any

.70% A

.69%

.70%

.71%

.68%

.69%

Expenses net of all reductions

.70% A

.69%

.70%

.70%

.68%

.69%

Net investment income (loss)

7.59% A

8.25%

8.65% H

11.00% G, H

11.38%

9.80%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,292,436

$ 1,593,714

$ 1,145,562

$ 1,201,085

$ 1,467,250

$ 2,257,610

Portfolio turnover rate

139% A

130%

96%

138%

68%

82%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.075 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.95% and 12.08% to 8.65% and 11.00%, respectively. The reclassification has no impact on the net assets of the fund.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 6.92

$ 5.91

$ 6.38

$ 8.15

$ 11.29

$ 11.52

Income from Investment Operations

Net investment income (loss) E

.244

.513

.488 H

.758 G, H

1.102

1.074

Net realized and unrealized gain (loss)

(.204)

.967

(.288) H

(1.538) G, H

(3.502)

(.194)

Total from investment operations

.040

1.480

.200

(.780)

(2.400)

.880

Distributions from net investment income

(.560)

(.470)

(.670)

(.990)

(.740)

(1.075)

Distributions from net realized gain

-

-

-

-

-

(.030)

Distributions in excess of net realized gain

-

-

-

-

-

(.005)

Total distributions

(.560)

(.470)

(.670)

(.990)

(.740)

(1.110)

Net asset value, end of period

$ 6.40

$ 6.92

$ 5.91

$ 6.38

$ 8.15

$ 11.29

Total Return B, C, D

.52%

26.97%

3.62%

(11.90)%

(22.68)%

8.08%

Ratios to Average Net Assets F

Expenses before expense reductions

.80% A

.79%

.80%

.81%

.78%

.79%

Expenses net of voluntary waivers, if any

.80% A

.79%

.80%

.81%

.78%

.79%

Expenses net of all reductions

.80% A

.79%

.80%

.81%

.78%

.79%

Net investment income (loss)

7.49% A

8.15%

8.55% H

10.90% G, H

11.28%

9.69%

Supplemental Data

Net assets, end of period (000 omitted)

$ 327,083

$ 417,928

$ 260,489

$ 234,204

$ 227,549

$ 253,972

Portfolio turnover rate

139% A

130%

96%

138%

68%

82%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.075 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.85% and 11.97% to 8.55% and 10.90%, respectively. The reclassification has no impact on the net assets of the fund.

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 F

Selected Per-Share Data

Net asset value, beginning of period

$ 6.87

$ 5.87

$ 6.36

$ 8.13

$ 11.14

Income from Investment Operations

Net investment income (loss) E

.236

.501

.472 I

.716 H, I

.936

Net realized and unrealized gain (loss)

(.196)

.959

(.292) I

(1.496) H, I

(3.206)

Total from investment operations

.040

1.460

.180

(.780)

(2.270)

Distributions from net investment income

(.560)

(.460)

(.670)

(.990)

(.740)

Net asset value, end of period

$ 6.35

$ 6.87

$ 5.87

$ 6.36

$ 8.13

Total Return B, C, D

.52%

26.75%

3.30%

(11.93)%

(21.83)%

Ratios to Average Net Assets G

Expenses before expense reductions

.96% A

.95%

.97%

.98%

1.01% A

Expenses net of voluntary waivers, if any

.96% A

.95%

.97%

.98%

1.01% A

Expenses net of all reductions

.96% A

.95%

.97%

.98%

1.01% A

Net investment income (loss)

7.33% A

7.99%

8.38% I

10.73% H, I

11.04% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 64,687

$ 76,383

$ 32,499

$ 16,508

$ 4,742

Portfolio turnover rate

139% A

130%

96%

138%

68%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. I As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.072 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.68% and 11.81% to 8.38% and 10.73%, respectively. The reclassification has no impact on the net assets of the fund.

Financial Highlights - Initial Class R

Six months ended
June 30, 2004 F

(Unaudited)

Selected Per-Share Data

Net asset value, beginning of period

$ 6.47

Income from Investment Operations

Net investment income (loss) E

.101

Net realized and unrealized gain (loss)

(.151)

Total from investment operations

(.050)

Net asset value, end of period

$ 6.42

Total Return B, C, D

.51%

Ratios to Average Net Assets G

Expenses before expense reductions

.71% A

Expenses net of voluntary waivers, if any

.71% A

Expenses net of all reductions

.71% A

Net investment income (loss)

7.58% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 75

Portfolio turnover rate

139% A

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

High Income Portfolio

Financial Highlights - Service Class R

Six months ended
June 30, 2004 F

(Unaudited)

Selected Per-Share Data

Net asset value, beginning of period

$ 6.45

Income from Investment Operations

Net investment income (loss) E

.100

Net realized and unrealized gain (loss)

(.150)

Total from investment operations

(.050)

Net asset value, end of period

$ 6.40

Total Return B, C, D

.52%

Ratios to Average Net Assets G

Expenses before expense reductions

.81% A

Expenses net of voluntary waivers, if any

.81% A

Expenses net of all reductions

.81% A

Net investment income (loss)

7.48% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 74

Portfolio turnover rate

139% A

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

Financial Highlights - Service Class 2R

Six months ended
June 30, 2004 F

(Unaudited)

Selected Per-Share Data

Net asset value, beginning of period

$ 6.40

Income from Investment Operations

Net investment income (loss) E

.097

Net realized and unrealized gain (loss)

(.147)

Total from investment operations

(.050)

Net asset value, end of period

$ 6.35

Total Return B, C, D

.52%

Ratios to Average Net Assets G

Expenses before expense reductions

.97% A

Expenses net of voluntary waivers, if any

.97% A

Expenses net of all reductions

.97% A

Net investment income (loss)

7.32% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 74

Portfolio turnover rate

139% A

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

High Income Portfolio (the fund) is a fund of Variable Insurance Products Fund (the trust) (referred to in this report as Fidelity Variable Insurance Products: High Income Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares, Initial Class R shares, Service Class R shares, and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to prior period premium and discount on debt securities, market discount, partnerships, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 58,226,644

|

Unrealized depreciation

(32,829,997)

Net unrealized appreciation (depreciation)

$ 25,396,647

Cost for federal income tax purposes

$ 1,652,334,837

Trading (Redemption) Fees. Initial Class R shares, Service Class R shares and Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

High Income Portfolio

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .58% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' and Service Class R's average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 184,449

|

Service Class 2

91,344

Service Class R

16

Service Class 2R

40

$ 275,849

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 478,335

|

Service Class

122,089

Service Class 2

27,751

Initial Class R

12

Service Class R

12

Service Class 2R

12

$ 628,211

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The fee is based on the level of average net assets for the month.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $237,616 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Bank Borrowings.

The fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $158 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $738.

8. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 20% of the total outstanding shares of the fund and two otherwise unaffiliated shareholders were the owners of record of 49% of the total outstanding shares of the fund.

High Income Portfolio

Semiannual Report

High Income Portfolio

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research (Far East) Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

The Bank of New York
New York, NY

VIPHI-SANN-0804
1.705694.106

Fidelity® Variable Insurance Products:

Overseas Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Investment Summary

3

A summary of the fund's investments at period end.

Investments

4

A complete list of the fund's investments with their
market values.

Financial Statements

8

Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.

Notes

13

Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines, call 800-221-5207 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

Overseas Portfolio

Fidelity Variable Insurance Products: Overseas Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004

% of fund's
net assets

Vodafone Group PLC (United Kingdom)

3.9

Deutsche Telekom AG sponsored ADR (Germany)

3.4

Total SA Series B (France)

2.8

HSBC Holdings PLC (United Kingdom) (Reg.) (United Kingdom)

2.0

Allianz AG (Reg.) (Germany)

1.8

13.9

Top Five Market Sectors as of June 30, 2004

% of fund's
net assets

Financials

24.6

Information Technology

12.9

Telecommunication Services

12.2

Consumer Discretionary

12.1

Energy

9.5

Top Five Countries as of June 30, 2004

(excluding cash equivalents)

% of fund's
net assets

Japan

18.6

United Kingdom

17.8

France

10.4

Germany

10.2

Switzerland

6.2

Semiannual Report

Fidelity Variable Insurance Products: Overseas Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 91.0%

Shares

Value (Note 1)

Australia - 1.7%

CSL Ltd.

698,840

$ 10,892,529

Newcrest Mining Ltd.

149,871

1,443,487

News Corp. Ltd. sponsored ADR

693,600

22,805,568

TOTAL AUSTRALIA

35,141,584

Belgium - 0.2%

Fortis

215,200

4,776,734

Bermuda - 0.1%

Golar LNG Ltd. (a)

101,400

1,565,944

Brazil - 0.1%

Petroleo Brasileiro SA Petrobras sponsored ADR

47,300

1,327,711

Canada - 3.7%

Agnico-Eagle Mines Ltd.

99,100

1,320,194

Bombardier, Inc. Class B (sub. vtg.)

961,400

2,897,390

Canadian Natural Resources Ltd.

229,700

6,896,683

EnCana Corp.

565,100

24,410,422

Kinross Gold Corp. (a)

975,100

5,424,126

Meridian Gold, Inc. (a)

119,300

1,543,682

Petro-Canada

26,900

1,162,595

Precision Drilling Corp. (a)

94,800

4,529,278

Talisman Energy, Inc.

1,272,100

27,751,788

Wheaton River Minerals Ltd. (a)

835,200

2,341,741

TOTAL CANADA

78,277,899

China - 0.6%

BYD Co. Ltd. (H Shares)

683,600

2,020,177

China Telecom Corp. Ltd. sponsored ADR

200,280

7,067,881

Global Bio-Chem Technology Group Co. Ltd.

4,130,000

2,991,679

Global Bio-Chem Technology Group Co. Ltd. warrants 5/31/07 (a)

516,250

33,756

People's Food Holdings Ltd.

1,700,000

1,118,226

TOTAL CHINA

13,231,719

Denmark - 1.0%

Coloplast AS Series B

27,200

2,571,007

Danske Bank AS

163,300

3,878,971

Novo Nordisk AS Series B

110,100

5,682,243

TDC AS

283,900

9,247,785

TOTAL DENMARK

21,380,006

Finland - 0.5%

Nokia Corp.

682,200

9,919,188

France - 10.4%

Alcatel SA sponsored ADR (a)

813,300

12,598,017

Assurances Generales France
SA (Bearer)

51,100

3,111,715

AXA SA

710,604

15,732,773

BNP Paribas SA

376,602

23,217,807

Business Objects SA sponsored ADR (a)

158,400

3,584,592

Credit Agricole SA

113,400

2,766,053

Shares

Value (Note 1)

Dassault Systemes SA

113,914

$ 5,294,604

France Telecom SA

709,661

18,649,891

L'Oreal SA

162,395

13,002,438

Pernod-Ricard

96,600

12,382,184

Peugeot Citroen SA

47,200

2,634,756

Sanofi-Synthelabo SA sponsored ADR

518,200

16,577,218

Television Francaise 1 SA

96,500

3,047,030

Total SA Series B

308,800

59,339,008

Vivendi Universal SA sponsored ADR (a)

928,000

25,891,200

TOTAL FRANCE

217,829,286

Germany - 8.8%

Adidas-Salomon AG

75,759

9,066,788

Allianz AG (Reg.)

350,800

38,090,211

Altana AG sponsored ADR

31,600

1,908,008

BASF AG

298,725

16,086,341

Deutsche Bank AG (NY Shares)

56,700

4,485,537

Deutsche Boerse AG

139,239

7,093,210

Deutsche Telekom AG sponsored ADR (a)

4,044,300

71,624,553

E.ON AG

72,544

5,258,715

Fresenius Medical Care AG

182,200

13,552,656

Infineon Technologies AG sponsored ADR (a)

185,800

2,526,880

Muenchener Rueckversicherungs-Gesellschaft AG (Reg.)

59,800

6,498,248

RWE AG

164,060

7,733,385

TOTAL GERMANY

183,924,532

Greece - 0.2%

Cosmote Mobile Telecommunications SA

159,500

2,509,388

Greek Organization of Football Prognostics SA

129,780

2,456,501

TOTAL GREECE

4,965,889

Hong Kong - 1.2%

Esprit Holdings Ltd.

221,000

988,859

Hong Kong Exchanges & Clearing Ltd.

1,952,000

4,004,205

Hutchison Whampoa Ltd.

950,600

6,489,840

Techtronic Industries Co. Ltd.

6,544,000

10,445,499

Television Broadcasts Ltd.

511,000

2,188,184

TOTAL HONG KONG

24,116,587

India - 2.7%

Bank of Baroda

501,743

1,637,554

Cipla Ltd.

633,000

2,918,891

Dr. Reddy's Laboratories Ltd.

151,900

2,427,592

Housing Development Finance Corp. Ltd.

1,107,583

12,457,448

I-Flex Solutions Ltd.

429,464

5,420,728

Infosys Technologies Ltd.

135,558

16,287,895

Reliance Industries Ltd.

367,900

3,438,135

Satyam Computer Services Ltd.

1,219,887

8,106,046

Common Stocks - continued

Shares

Value (Note 1)

India - continued

State Bank of India

179,400

$ 1,760,364

Wipro Ltd.

86,289

998,681

TOTAL INDIA

55,453,334

Indonesia - 0.1%

PT Bank Mandiri Persero Tbk

14,066,000

1,758,250

Italy - 0.3%

ENI Spa

328,286

6,588,043

Japan - 18.0%

Advantest Corp.

63,200

4,296,021

Canon, Inc.

243,600

13,008,240

Daiwa Securities Group, Inc.

1,417,000

10,330,416

FamilyMart Co. Ltd.

276,700

9,159,907

Honda Motor Co. Ltd.

157,000

7,636,480

Ito Yokado Ltd.

622,000

27,010,906

JAFCO Co. Ltd.

247,800

19,194,561

KDDI Corp.

3,889

22,565,992

Kyocera Corp.

137,700

11,814,660

Millea Holdings, Inc.

529

7,968,977

Mizuho Financial Group, Inc.

5,570

25,638,481

Murata Manufacturing Co. Ltd.

181,500

10,497,815

Nikko Cordial Corp.

3,191,000

15,696,917

Nippon System Development Co. Ltd.

102,000

2,257,403

Nitto Denko Corp.

219,600

11,394,583

Nomura Holdings, Inc.

1,729,000

25,848,550

Nomura Research Institute Ltd.

20,200

2,184,555

Oriental Land Co. Ltd.

38,700

2,580,251

ORIX Corp.

92,700

10,775,108

Rohm Co. Ltd.

62,600

7,602,377

Seiyu Ltd. (a)

1,091,000

3,631,948

SMC Corp.

35,400

3,884,339

Softbank Corp.

94,200

4,204,594

Sumitomo Electric Industries Ltd.

852,000

8,817,930

Sumitomo Mitsui Financial Group, Inc.

4,997

34,757,044

TDK Corp.

98,500

7,584,002

Tokyo Electron Ltd.

206,800

11,768,845

Toyota Motor Corp.

631,800

25,783,758

UFJ Holdings, Inc. (a)

6,564

29,420,327

TOTAL JAPAN

377,314,987

Korea (South) - 2.6%

Honam Petrochemical Corp.

118,960

4,059,788

Kookmin Bank (a)

167,140

5,197,338

LG Electronics, Inc.

254,140

12,063,122

Samsung Electro-Mechanics Co. Ltd. (a)

183,200

5,196,883

Samsung Electronics Co. Ltd.

60,640

25,054,383

Shinhan Financial Group Co. Ltd.

261,240

3,801,501

TOTAL KOREA (SOUTH)

55,373,015

Malaysia - 0.1%

Public Bank BHD (For. Reg.)

1,452,250

2,522,329

Shares

Value (Note 1)

Netherlands - 5.1%

Aegon NV

72,300

$ 873,835

ASML Holding NV (a)

1,780,174

30,458,777

EADS NV

105,300

2,938,338

ING Groep NV (Certificaten Van Aandelen)

832,324

19,726,079

Koninklijke Ahold NV (a)

461,300

3,658,109

Koninklijke KPN NV

845,606

6,455,945

Unilever NV (NY Shares)

237,400

16,264,274

VNU NV

547,525

15,939,467

Wolters Kluwer NV (Certificaten Van Aandelen)

514,275

9,357,970

TOTAL NETHERLANDS

105,672,794

Peru - 0.1%

Compania de Minas Buenaventura SA sponsored ADR

52,500

1,160,250

Portugal - 0.2%

Portugal Telecom SGPS SA (Reg.)

443,150

4,793,931

Russia - 0.8%

JSC MMC 'Norilsk Nickel'
sponsored ADR

75,800

4,153,840

Lukoil Oil Co. sponsored ADR

39,300

4,106,850

OAO Gazprom sponsored ADR

136,600

3,920,420

YUKOS Corp. sponsored ADR

132,403

4,210,415

TOTAL RUSSIA

16,391,525

South Africa - 0.3%

Harmony Gold Mining Co. Ltd. sponsored ADR

172,600

1,827,834

MTN Group Ltd. (a)

904,583

4,190,267

TOTAL SOUTH AFRICA

6,018,101

Spain - 2.2%

Banco Bilbao Vizcaya Argentaria SA

184,900

2,476,034

Banco Popular Espanol SA (Reg.)

174,700

9,890,436

Banco Santander Central Hispano SA

1,208,868

12,693,114

Telefonica SA

1,446,462

21,518,533

TOTAL SPAIN

46,578,117

Sweden - 1.4%

Skandia Foersaekrings AB

355,200

1,474,918

Skandinaviska Enskilda Banken AB
(A Shares)

269,900

3,915,342

Telefonaktiebolaget LM Ericsson ADR (a)

784,500

23,472,240

TOTAL SWEDEN

28,862,500

Switzerland - 6.2%

Actelion Ltd. (Reg.) (a)

22,893

2,638,540

Adecco SA

96,840

4,836,574

Compagnie Financiere Richemont unit

312,115

8,168,849

Credit Suisse Group (Reg.)

545,503

19,534,462

Novartis AG (Reg.)

782,531

34,822,629

Roche Holding AG (participation certificate)

242,968

24,114,000

Common Stocks - continued

Shares

Value (Note 1)

Switzerland - continued

UBS AG (Reg.)

411,514

$ 29,242,185

Zurich Financial Services AG

43,940

6,954,646

TOTAL SWITZERLAND

130,311,885

Taiwan - 2.1%

High Tech Computer Corp.

639,000

2,798,123

Hon Hai Precision Industries Co. Ltd.

1,834,880

6,832,291

Quanta Computer, Inc.

2,701,000

5,752,800

Taishin Financial Holdings Co. Ltd.

1,668,000

1,376,336

Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR

312,200

2,594,382

United Microelectronics Corp. (a)

21,867,000

16,284,629

United Microelectronics Corp. sponsored ADR (a)

605,100

2,607,981

Yageo Corp. (a)

9,414,000

4,851,421

TOTAL TAIWAN

43,097,963

United Kingdom - 17.3%

3i Group PLC

663,873

7,398,085

Abbey National PLC

616,800

5,759,722

AstraZeneca PLC (United Kingdom)

497,100

22,687,644

Aviva PLC

266,300

2,756,840

BHP Billiton PLC

593,577

5,167,580

BP PLC

2,634,894

23,525,212

British Sky Broadcasting Group PLC (BSkyB)

310,800

3,517,220

Centrica PLC

1,630,900

6,661,497

Dixons Group PLC

5,328,300

16,019,846

Enterprise Inns PLC

281,200

2,941,788

Hilton Group PLC

2,014,800

10,117,407

HSBC Holdings PLC (United Kingdom) (Reg.)

2,842,849

42,591,564

ITV PLC

2,419,372

5,084,085

Kesa Electricals PLC

1,433,748

7,545,263

Lloyds TSB Group PLC

248,850

1,954,781

Man Group PLC

611,067

15,876,151

mmO2 PLC (a)

2,395,800

4,042,897

Prudential PLC

552,578

4,770,435

Reckitt Benckiser PLC

331,800

9,423,397

Reuters Group PLC

1,006,400

6,784,019

Rexam PLC

298,902

2,437,683

Rio Tinto PLC (Reg.)

642,180

15,741,437

Royal Bank of Scotland Group PLC

243,400

7,032,330

Shire Pharmaceuticals Group PLC sponsored ADR (a)

369,700

9,885,778

Smith & Nephew PLC

1,796,100

19,854,089

Tesco PLC

1,548,141

7,499,431

Vodafone Group PLC

37,316,904

82,470,360

William Hill PLC

189,500

1,910,061

Shares

Value (Note 1)

Xstrata PLC

367,500

$ 4,927,799

Yell Group PLC

1,044,000

6,548,366

TOTAL UNITED KINGDOM

362,932,767

United States of America - 3.0%

ENSCO International, Inc.

288,900

8,406,990

Fox Entertainment Group, Inc. Class A (a)

83,900

2,240,130

Freeport-McMoRan Copper & Gold, Inc. Class B

285,900

9,477,585

Grant Prideco, Inc. (a)

373,900

6,902,194

Nabors Industries Ltd. (a)

110,200

4,983,244

Newmont Mining Corp.

31,700

1,228,692

NTL, Inc. (a)

230,100

13,258,362

Pride International, Inc. (a)

175,400

3,001,094

Synthes, Inc.

77,867

8,896,682

Weatherford International Ltd. (a)

113,100

5,087,238

Wellcare Group, Inc.

1,300

22,100

TOTAL UNITED STATES OF AMERICA

63,504,311

TOTAL COMMON STOCKS

(Cost $1,535,585,706)

1,904,791,181

Nonconvertible Preferred Stocks - 0.8%

Germany - 0.8%

Fresenius Medical Care AG

129,900

6,969,161

Porsche AG (non-vtg.)

14,600

9,794,278

TOTAL NONCONVERTIBLE PREFERRED
STOCKS

(Cost $12,028,885)

16,763,439

Nonconvertible Bonds - 0.5%

Principal Amount

United Kingdom - 0.5%

Telewest Communications PLC yankee:

0% 2/1/10 (c)(d)

$ 630,000

270,900

9.25% 4/15/09 (c)

1,680,000

772,800

9.875% 2/1/10 (c)

4,295,000

2,405,200

Telewest PLC:

11% 10/1/07 (c)

8,260,000

4,914,700

yankee 9.625% 10/1/06 (c)

2,960,000

1,687,200

TOTAL NONCONVERTIBLE BONDS

(Cost $8,459,875)

10,050,800

Government Obligations - 1.2%

Germany - 0.6%

German Federal Republic:

4.25% 7/4/14

EUR

5,000,000

6,063,729

- principal STRIPS 0% 1/4/14

EUR

7,440,000

6,043,348

TOTAL GERMANY

12,107,077

Government Obligations - continued

Principal
Amount

Value
(Note 1)

Japan - 0.6%

Japan Government 0.1% 8/20/05

JPY

1,352,700,000

$ 12,433,703

TOTAL GOVERNMENT OBLIGATIONS

(Cost $24,480,193)

24,540,780

Money Market Funds - 12.5%

Shares

Fidelity Cash Central Fund, 1.16% (b)

198,108,075

198,108,075

Fidelity Securities Lending Cash Central Fund, 1.18% (b)

63,694,061

63,694,061

TOTAL MONEY MARKET FUNDS

(Cost $261,802,136)

261,802,136

TOTAL INVESTMENT PORTFOLIO - 106.0%

(Cost $1,842,356,795)

2,217,948,336

NET OTHER ASSETS - (6.0)%

(124,745,779)

NET ASSETS - 100%

$ 2,093,202,557

Currency Abbreviations

EUR

-

European Monetary Unit

JPY

-

Japanese yen

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments.

(d) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $870,741,019 and $787,320,568, respectively.

The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $502 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $606,700,000 of which $367,608,000, $191,786,000 and $47,306,000 will expire on December 31, 2009, 2010 and 2011, respectively.

See accompanying notes which are an integral part of the financial statements.

Overseas Portfolio

Fidelity Variable Insurance Products: Overseas Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2004 (Unaudited)

Assets

Investment in securities, at value (including securities loaned of $61,286,817) (cost $1,842,356,795) - See accompanying schedule

$ 2,217,948,336

Cash

5,534

Foreign currency held at value (cost $ 3,891,360)

3,846,270

Receivable for investments sold

536,942

Receivable for fund shares sold

5,995,097

Dividends receivable

2,338,233

Interest receivable

184,816

Prepaid expenses

3,732

Other affiliated receivables

8,536

Other receivables

383,905

Total assets

2,231,251,401

Liabilities

Payable for investments purchased

$ 67,792,625

Payable for fund shares redeemed

4,726,022

Accrued management fee

1,251,048

Distribution fees payable

74,700

Other affiliated payables

235,130

Other payables and accrued expenses

275,258

Collateral on securities loaned, at value

63,694,061

Total liabilities

138,048,844

Net Assets

$ 2,093,202,557

Net Assets consist of:

Paid in capital

$ 2,274,934,071

Distributions in excess of net investment income

(2,882,395)

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(554,287,061)

Net unrealized appreciation (depreci-
ation) on investments and assets and liabilities in foreign currencies

375,437,942

Net Assets

$ 2,093,202,557

Calculation of Maximum Offering Price
Initial Class:
Net Asset Value, offering price and redemption price per share ($1,430,323,652 ÷ 91,840,585 shares)

$ 15.57

Service Class:
Net Asset Value, offering price and redemption price per share ($276,536,907 ÷ 17,821,383 shares)

$ 15.52

Service Class 2:
Net Asset Value, offering price and redemption price per share ($217,429,253 ÷ 14,043,824 shares)

$ 15.48

Initial Class R:
Net Asset Value, offering price and redemption price per share ($81,566,300 ÷ 5,244,063 shares)

$ 15.55

Service Class R:
Net Asset Value, offering price and redemption price per share ($72,878,646 ÷ 4,701,272 shares)

$ 15.50

Service Class 2R:
Net Asset Value, offering price and redemption price per share ($14,467,799 ÷ 939,385 shares)

$ 15.40

Statement of Operations

Six months ended June 30, 2004 (Unaudited)

Investment Income

Dividends

$ 20,677,073

Interest

928,505

Security lending

972,053

22,577,631

Less foreign taxes withheld

(2,419,794)

Total income

20,157,837

Expenses

Management fee

$ 7,508,274

Transfer agent fees

700,898

Distribution fees

406,575

Accounting and security lending fees

488,651

Non-interested trustees' compensation

4,807

Appreciation in deferred trustee compensation account

6,454

Custodian fees and expenses

371,773

Registration fees

195

Audit

33,016

Legal

2,428

Miscellaneous

49,286

Total expenses before
reductions

9,572,357

Expense reductions

(384,397)

9,187,960

Net investment income (loss)

10,969,877

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities (net of foreign taxes of $215,094)

65,555,846

Foreign currency transactions

(41,511)

Total net realized gain (loss)

65,514,335

Change in net unrealized appreciation (depreciation) on:

Investment securities (net of decrease in deferred foreign taxes of $3,690,743)

(61,392,641)

Assets and liabilities in foreign currencies

(74,717)

Total change in net unrealized appreciation (depreciation)

(61,467,358)

Net gain (loss)

4,046,977

Net increase (decrease) in net assets resulting from operations

$ 15,016,854

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Variable Insurance Products: Overseas Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
June 30, 2004
(Unaudited)

Year ended
December 31,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 10,969,877

$ 12,219,607

Net realized gain (loss)

65,514,335

(23,642,194)

Change in net unrealized appreciation (depreciation)

(61,467,358)

580,158,781

Net increase (decrease) in net assets resulting
from operations

15,016,854

568,736,194

Distributions to shareholders from net investment income

(22,557,627)

(11,225,102)

Share transactions - net increase (decrease)

174,447,818

76,831,320

Redemption fees

25,840

30,862

Total increase (decrease) in net assets

166,932,885

634,373,274

Net Assets

Beginning of period

1,926,269,672

1,291,896,398

End of period (including distributions in excess of net investment income of $2,882,395 and undistributed net investment income of $8,430,134, respectively)

$ 2,093,202,557

$ 1,926,269,672

Other Information:

Share Transactions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

Shares

Sold

11,075,633

3,058,353

6,755,093

2,950,158

1,213,826

503,458

Reinvested

1,047,651

175,526

101,002

30,931

41,469

4,934

Redeemed

(12,405,150)

(1,292,239)

(1,898,355)

(271,905)

(172,337)

(27,665)

Net increase (decrease)

(281,866)

1,941,640

4,957,740

2,709,184

1,082,958

480,727

Dollars

Sold

$ 176,812,653

$ 48,615,520

$ 107,053,104

$ 45,816,556

$ 19,324,001

$ 7,674,161

Reinvested

16,877,656

2,818,947

1,619,063

497,678

665,579

78,704

Redeemed

(195,405,519)

(20,377,386)

(30,204,082)

(4,290,617)

(2,693,039)

(435,161)

Net increase (decrease)

$ (1,715,210)

$ 31,057,081

$ 78,468,085

$ 42,023,617

$ 17,296,541

$ 7,317,704

Share Transactions

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

Shares

Sold

135,754,582

34,982,458

57,905,822

1,401,445

2,096,259

337,680

Reinvested

891,621

140,448

26,238

15,499

17,531

2,278

Redeemed

(138,456,054)

(35,447,830)

(53,234,293)

(307,443)

(140,438)

(29,586)

Net increase (decrease)

(1,809,851)

(324,924)

4,697,767

1,109,501

1,973,352

310,372

Dollars

Sold

$ 1,613,667,675

$ 391,087,076

$ 672,794,854

$ 17,351,785

$ 25,897,371

$ 3,723,543

Reinvested

9,156,952

1,438,187

268,410

159,020

179,341

23,192

Redeemed

(1,637,501,847)

(397,130,238)

(618,521,317)

(3,679,685)

(1,677,969)

(405,030)

Net increase (decrease)

$ (14,677,220)

$ (4,604,975)

$ 54,541,947

$ 13,831,120

$ 24,398,743

$ 3,341,705

Distributions

Six months ended June 30, 2004 (Unaudited)

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

From net investment income

$ 16,877,656

$ 2,818,947

$ 1,619,063

$ 497,678

$ 665,579

$ 78,704

Year ended December 31, 2003

Initial Class

Service Class

Service Class 2

Initial Class R

Service Class R

Service Class 2R

From net investment income

$ 9,156,952

$ 1,438,187

$ 268,410

$ 159,020

$ 179,341

$ 23,192

See accompanying notes which are an integral part of the financial statements.

Overseas Portfolio

Financial Highlights - Initial Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 15.59

$ 10.98

$ 13.88

$ 20.00

$ 27.44

$ 20.06

Income from Investment Operations

Net investment income (loss) D

.09

.11

.10

.14

.19 E

.24

Net realized and unrealized gain (loss)

.07

4.60

(2.90)

(3.86)

(4.93)

7.95

Total from investment operations

.16

4.71

(2.80)

(3.72)

(4.74)

8.19

Distributions from net investment income

(.18)

(.10)

(.10)

(.93)

(.31)

(.31)

Distributions in excess of net investment income

-

-

-

-

(.06)

-

Distributions from net realized gain

-

-

-

(1.47)

(2.33)

(.50)

Total distributions

(.18)

(.10)

(.10)

(2.40)

(2.70)

(.81)

Redemption fees added to paid in capital D

- G

- G

- G

-

-

-

Net asset value, end of period

$ 15.57

$ 15.59

$ 10.98

$ 13.88

$ 20.00

$ 27.44

Total Return B,C,H

.99%

43.37%

(20.28)%

(21.21)%

(19.07)%

42.55%

Ratios to Average Net Assets F

Expenses before expense reductions

.88% A

.90%

.90%

.92%

.89%

.91%

Expenses net of voluntary waivers, if any

.88% A

.90%

.90%

.92%

.89%

.91%

Expenses net of all reductions

.85% A

.86%

.86%

.87%

.87%

.87%

Net investment income (loss)

1.10% A

.87%

.79%

.91%

.84%

1.10%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,430,324

$ 1,436,137

$ 1,031,489

$ 1,496,873

$ 2,267,507

$ 2,736,851

Portfolio turnover rate

83% A

99%

77%

98%

136%

78%

A Annualized B Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Investment income per share reflects a special dividend which amounted to $.04 per share. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.01 per share. H Total returns for periods of less than one year are not annualized.

Financial Highlights - Service Class

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 15.53

$ 10.94

$ 13.83

$ 19.94

$ 27.39

$ 20.04

Income from Investment Operations

Net investment income (loss) D

.08

.09

.09

.12

.17 E

.22

Net realized and unrealized gain (loss)

.08

4.59

(2.89)

(3.84)

(4.93)

7.94

Total from investment operations

.16

4.68

(2.80)

(3.72)

(4.76)

8.16

Distributions from net investment income

(.17)

(.09)

(.09)

(.92)

(.30)

(.31)

Distributions in excess of net investment income

-

-

-

-

(.06)

-

Distributions from net realized gain

-

-

-

(1.47)

(2.33)

(.50)

Total distributions

(.17)

(.09)

(.09)

(2.39)

(2.69)

(.81)

Redemption fees added to paid in capital D

- G

- G

- G

-

-

-

Net asset value, end of period

$ 15.52

$ 15.53

$ 10.94

$ 13.83

$ 19.94

$ 27.39

Total Return B,C,H

.99%

43.20%

(20.34)%

(21.27)%

(19.18)%

42.44%

Ratios to Average Net Assets F

Expenses before expense reductions

.99% A

1.00%

1.00%

1.03%

.99%

1.01%

Expenses net of voluntary waivers, if any

.99% A

1.00%

1.00%

1.03%

.99%

1.01%

Expenses net of all reductions

.95% A

.96%

.96%

.97%

.97%

.98%

Net investment income (loss)

1.00% A

.77%

.69%

.81%

.74%

1.00%

Supplemental Data

Net assets, end of period (000 omitted)

$ 276,537

$ 246,632

$ 177,322

$ 240,525

$ 257,257

$ 144,371

Portfolio turnover rate

83% A

99%

77%

98%

136%

78%

A Annualized B Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Investment income per share reflects a special dividend which amounted to $.04 per share. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.01 per share. H Total returns for periods of less than one year are not annualized.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Service Class 2

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002

2001

2000 G

Selected Per-Share Data

Net asset value, beginning of period

$ 15.50

$ 10.90

$ 13.81

$ 19.91

$ 26.16

Income from Investment Operations

Net investment income (loss) E

.07

.08

.07

.10

.12 F

Net realized and unrealized gain (loss)

.07

4.58

(2.88)

(3.80)

(3.68)

Total from investment operations

.14

4.66

(2.81)

(3.70)

(3.56)

Distributions from net investment income

(.16)

(.06)

(.10)

(.93)

(.30)

Distributions in excess of net investment income

-

-

-

-

(.06)

Distributions from net realized gain

-

-

-

(1.47)

(2.33)

Total distributions

(.16)

(.06)

(.10)

(2.40)

(2.69)

Redemption fees added to paid in capital E

- I

- I

- I

-

-

Net asset value, end of period

$ 15.48

$ 15.50

$ 10.90

$ 13.81

$ 19.91

Total Return B, C, D

.87%

43.04%

(20.46)%

(21.20)%

(15.50)%

Ratios to Average Net Assets H

Expenses before expense reductions

1.14% A

1.16%

1.16%

1.18%

1.15% A

Expenses net of voluntary waivers, if any

1.14% A

1.16%

1.16%

1.18%

1.15% A

Expenses net of all reductions

1.10% A

1.12%

1.12%

1.12%

1.13% A

Net investment income (loss)

.84% A

.61%

.53%

.65%

.58% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 217,429

$ 140,822

$ 47,824

$ 48,843

$ 12,351

Portfolio turnover rate

83% A

99%

77%

98%

136%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. DTotal returns would have been lower had certain expenses not been reduced during the periods shown. ECalculated based on average shares outstanding during the period. FInvestment income per share reflects a special dividend which amounted to $.04 per share. GFor the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. HExpense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. IAmount represents less than $.01 per share.

Financial Highlights - Initial Class R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 15.57

$ 10.98

$ 14.05

Income from Investment Operations

Net investment income (loss) E

.09

.11

.06

Net realized and unrealized gain (loss)

.07

4.59

(3.13)

Total from investment operations

.16

4.70

(3.07)

Distributions from net investment income

(.18)

(.11)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 15.55

$ 15.57

$ 10.98

Total Return B, C, D

.99%

43.32%

(21.85)%

Ratios to Average Net Assets G

Expenses before expense reductions

.89% A

.90%

.91% A

Expenses net of voluntary waivers, if any

.89% A

.90%

.91% A

Expenses net of all reductions

.85% A

.86%

.87% A

Net investment income (loss)

1.10% A

.87%

.79% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 81,566

$ 39,466

$ 15,649

Portfolio turnover rate

83% A

99%

77%

A Annualized BTotal returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Overseas Portfolio

Financial Highlights - Service Class R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 15.52

$ 10.94

$ 14.01

Income from Investment Operations

Net investment income (loss) E

.08

.10

.05

Net realized and unrealized gain (loss)

.07

4.58

(3.12)

Total from investment operations

.15

4.68

(3.07)

Distributions from net investment income

(.17)

(.10)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 15.50

$ 15.52

$ 10.94

Total Return B, C, D

.93%

43.25%

(21.91)%

Ratios to Average Net Assets G

Expenses before expense reductions

.98% A

1.00%

1.01% A

Expenses net of voluntary waivers, if any

.98% A

1.00%

1.01% A

Expenses net of all reductions

.95% A

.96%

.97% A

Net investment income (loss)

1.00% A

.77%

.69% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 72,879

$ 56,141

$ 17,997

Portfolio turnover rate

83% A

99%

77%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

Six months ended
June 30, 2004

Years ended December 31,

(Unaudited)

2003

2002 F

Selected Per-Share Data

Net asset value, beginning of period

$ 15.42

$ 10.90

$ 13.96

Income from Investment Operations

Net investment income (loss) E

.07

.08

.04

Net realized and unrealized gain (loss)

.07

4.55

(3.10)

Total from investment operations

.14

4.63

(3.06)

Distributions from net investment income

(.16)

(.11)

-

Redemption fees added to paid in capital E, H

-

-

-

Net asset value, end of period

$ 15.40

$ 15.42

$ 10.90

Total Return B, C, D

.87%

43.00%

(21.92)%

Ratios to Average Net Assets G

Expenses before expense reductions

1.14% A

1.15%

1.17% A

Expenses net of voluntary waivers, if any

1.14% A

1.15%

1.17% A

Expenses net of all reductions

1.10% A

1.11%

1.14% A

Net investment income (loss)

.85% A

.62%

.52% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 14,468

$ 7,072

$ 1,616

Portfolio turnover rate

83% A

99%

77%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Overseas Portfolio (the fund) is a fund of Variable Insurance Products Fund, (the trust) (referred to in this report as Fidelity Variable Insurance Products: Overseas Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares, Initial Class R shares, Service Class R shares and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class. Certain fund investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted securities, for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period. Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 429,755,451

|

Unrealized depreciation

(58,684,975)

Net unrealized appreciation (depreciation)

$ 371,070,476

Cost for federal income tax purposes

$ 1,846,877,860

Trading (Redemption) Fees. Initial Class R shares, Service Class R shares and Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .73% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' and Service Class R's average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

Service Class

$ 135,043

|

Service Class 2

227,199

Service Class R

33,316

Service Class 2R

11,017

$ 406,575

Overseas Portfolio

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 498,192

|

Service Class

93,197

Service Class 2

66,234

Initial Class R

18,014

Service Class R

22,187

Service Class 2R

3,074

$ 700,898

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $879,310 for the period.

Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $383,399 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $998.

8. Other Information.

At the end of the period, FMR or its affiliates were the owners of record of 15% of the total outstanding shares of the fund and three otherwise unaffiliated shareholders were the owners of record of 49% of the total outstanding shares of the fund.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research (Far East) Inc.

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

Fidelity Investments Japan Limited

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

JPMorgan Chase Bank
New York, NY

VIPOVRS-SANN-0804
1.705696.106

Item 2. Code of Ethics

Not applicable.

Item 3. Audit Committee Financial Expert

Not applicable.

Item 4. Principal Accountant Fees and Services

Not applicable.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 9. Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may recommend nominees to the Variable Insurance Products Fund's Board of Trustees.

Item 10. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Variable Insurance Products Fund's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Trust's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.

Item 11. Exhibits

(a)

(1)

Not applicable.

(a)

(2)

Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)

(3)

Not applicable.

(b)

Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

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.

Variable Insurance Products Fund

By:

/s/Christine Reynolds

Christine Reynolds

President and Treasurer

Date:

August 17, 2004

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

By:

/s/Christine Reynolds

Christine Reynolds

President and Treasurer

Date:

August 17, 2004

By:

/s/Timothy F. Hayes

Timothy F. Hayes

Chief Financial Officer

Date:

August 17, 2004