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, 2006

Item 1. Reports to Stockholders

Fidelity® Variable Insurance Products:

Equity-Income Portfolio

Semiannual Report

June 30, 2006

(2_fidelity_logos) (Registered_Trademark)

Contents

Shareholder Expense Example

<Click Here>

An example of shareholder expenses.

Investment Changes

<Click Here>

A summary of major shifts in the fund's investments over the past six months.

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

Board Approval of Investment Advisory Contracts and Management Fees

<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

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.

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.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

VIP Equity-Income Portfolio

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
January 1, 2006

Ending
Account Value
June 30, 2006

Expenses Paid
During Period*
January 1, 2006
to June 30, 2006

Initial Class

Actual

$ 1,000.00

$ 1,051.20

$ 2.85

HypotheticalA

$ 1,000.00

$ 1,022.02

$ 2.81

Service Class

Actual

$ 1,000.00

$ 1,050.70

$ 3.36

HypotheticalA

$ 1,000.00

$ 1,021.52

$ 3.31

Service Class 2

Actual

$ 1,000.00

$ 1,050.00

$ 4.12

HypotheticalA

$ 1,000.00

$ 1,020.78

$ 4.06

Service Class 2R

Actual

$ 1,000.00

$ 1,049.90

$ 4.12

HypotheticalA

$ 1,000.00

$ 1,020.78

$ 4.06

Investor Class

Actual

$ 1,000.00

$ 1,050.50

$ 3.51

HypotheticalA

$ 1,000.00

$ 1,021.37

$ 3.46

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Annualized
Expense Ratio

Initial Class

.56%

Service Class

.66%

Service Class 2

.81%

Service Class 2R

.81%

Investor Class

.69%

Semiannual Report

VIP Equity-Income Portfolio

Investment Changes

Top Ten Stocks as of June 30, 2006

% of fund's
net assets

% of fund's net assets
6 months ago

Exxon Mobil Corp.

4.1

3.1

Bank of America Corp.

3.3

3.0

Citigroup, Inc.

2.6

2.7

American International Group, Inc.

2.5

2.7

JPMorgan Chase & Co.

2.3

2.3

AT&T, Inc.

1.9

1.7

Total SA sponsored ADR

1.6

2.1

Schlumberger Ltd. (NY Shares)

1.5

1.3

BellSouth Corp.

1.5

1.2

Wachovia Corp.

1.5

1.5

22.8

Top Five Market Sectors as of June 30, 2006

% of fund's
net assets

% of fund's net assets
6 months ago

Financials

27.8

28.9

Energy

13.1

11.8

Consumer Discretionary

12.1

11.9

Industrials

11.3

11.0

Information Technology

8.2

9.0

Asset Allocation (% of fund's net assets)

As of June 30, 2006*

As of December 31, 2005**

Stocks 99.1%

Stocks 98.8%

Bonds 0.6%

Bonds 0.7%

Short-Term Investments
and Net Other Assets 0.3%

Short-Term Investments
and Net Other Assets 0.5%

* Foreign investments

10.9%

** Foreign investments

11.8%



Semiannual Report

VIP Equity-Income Portfolio

Investments June 30, 2006 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.3%

Shares

Value (Note 1)

CONSUMER DISCRETIONARY - 11.6%

Auto Components - 0.2%

American Axle & Manufacturing Holdings, Inc.

336,400

$ 5,755,804

Johnson Controls, Inc.

203,425

16,725,604

22,481,408

Automobiles - 1.3%

General Motors Corp. (d)

976,400

29,086,956

Harley-Davidson, Inc.

249,400

13,689,566

Hyundai Motor Co.

187,710

15,947,535

Monaco Coach Corp.

188,200

2,390,140

Renault SA

229,101

24,617,544

Toyota Motor Corp. sponsored ADR

430,700

45,046,913

Winnebago Industries, Inc. (d)

374,700

11,630,688

142,409,342

Diversified Consumer Services - 0.1%

Service Corp. International (SCI)

1,580,000

12,861,200

Hotels, Restaurants & Leisure - 0.3%

Gaylord Entertainment Co. (a)

207,165

9,040,681

McDonald's Corp.

373,000

12,532,800

WMS Industries, Inc. (a)

217,600

5,960,064

27,533,545

Household Durables - 1.2%

Newell Rubbermaid, Inc.

2,509,600

64,822,968

Sony Corp. sponsored ADR

289,900

12,767,196

Whirlpool Corp.

624,534

51,617,735

129,207,899

Internet & Catalog Retail - 0.2%

Liberty Media Holding Corp. - Interactive Series A (a)

899,869

15,531,739

Leisure Equipment & Products - 0.3%

Eastman Kodak Co. (d)

1,464,000

34,813,920

Media - 5.5%

CBS Corp. Class B

1,667,943

45,117,858

Clear Channel Communications, Inc.

2,831,900

87,647,305

Comcast Corp. Class A (a)

2,427,891

79,489,151

Discovery Holding Co. Class A (a)

368,167

5,386,283

Gannett Co., Inc.

289,800

16,208,514

Liberty Media Holding Corp. - Capital Series A (a)

179,973

15,076,338

Live Nation, Inc. (a)

434,225

8,840,821

McGraw-Hill Companies, Inc.

41,500

2,084,545

News Corp. Class A

1,140,016

21,865,507

NTL, Inc.

812,888

20,240,899

The McClatchy Co. Class A (d)

153,591

6,162,071

The New York Times Co. Class A (d)

929,525

22,810,544

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

1,481,965

20,688,231

The Walt Disney Co.

1,800,000

54,000,000

Time Warner, Inc.

5,798,350

100,311,455

Shares

Value (Note 1)

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

1,503,743

$ 53,894,149

Vivendi Universal SA sponsored ADR

708,000

24,716,280

584,539,951

Multiline Retail - 1.3%

Big Lots, Inc. (a)(d)

1,704,756

29,117,237

Dollar Tree Stores, Inc. (a)

1,349,400

35,759,100

Family Dollar Stores, Inc.

1,072,100

26,191,403

Federated Department Stores, Inc.

1,100,800

40,289,280

Sears Holdings Corp. (a)

67,387

10,434,203

141,791,223

Specialty Retail - 0.9%

AnnTaylor Stores Corp. (a)

1,019,650

44,232,417

Home Depot, Inc.

549,700

19,673,763

OfficeMax, Inc.

146,000

5,949,500

RadioShack Corp.

1,425,700

19,959,800

Tiffany & Co., Inc.

229,800

7,587,996

97,403,476

Textiles, Apparel & Luxury Goods - 0.3%

Liz Claiborne, Inc.

553,040

20,495,662

VF Corp.

229,300

15,574,056

36,069,718

TOTAL CONSUMER DISCRETIONARY

1,244,643,421

CONSUMER STAPLES - 5.6%

Beverages - 0.5%

Anheuser-Busch Companies, Inc. (d)

1,222,900

55,752,011

Food & Staples Retailing - 1.2%

Wal-Mart Stores, Inc.

2,665,800

128,411,586

Food Products - 0.5%

Corn Products International, Inc.

620,700

18,993,420

Kraft Foods, Inc. Class A

1,170,900

36,180,810

55,174,230

Household Products - 1.6%

Colgate-Palmolive Co.

1,855,400

111,138,460

Kimberly-Clark Corp.

763,600

47,114,120

Procter & Gamble Co.

265,442

14,758,575

173,011,155

Personal Products - 0.6%

Avon Products, Inc.

1,950,070

60,452,170

Tobacco - 1.2%

Altria Group, Inc.

1,684,600

123,700,178

TOTAL CONSUMER STAPLES

596,501,330

ENERGY - 13.1%

Energy Equipment & Services - 3.4%

Baker Hughes, Inc.

1,109,100

90,779,835

BJ Services Co.

726,890

27,083,921

Halliburton Co.

475,800

35,309,118

Common Stocks - continued

Shares

Value (Note 1)

ENERGY - continued

Energy Equipment & Services - continued

Noble Corp.

639,300

$ 47,576,706

Schlumberger Ltd. (NY Shares)

2,496,120

162,522,373

363,271,953

Oil, Gas & Consumable Fuels - 9.7%

Apache Corp.

589,980

40,266,135

BP PLC sponsored ADR

1,406,942

97,937,233

Chevron Corp.

2,076,142

128,845,373

ConocoPhillips

893,000

58,518,290

Double Hull Tankers, Inc.

409,300

5,513,271

El Paso Corp.

1,042,900

15,643,500

EOG Resources, Inc.

393,300

27,271,422

Exxon Mobil Corp.

7,122,636

436,973,712

Hess Corp.

186,200

9,840,670

Kerr-McGee Corp.

290,000

20,111,500

Lukoil Oil Co. sponsored ADR

208,400

17,505,600

Total SA sponsored ADR

2,570,392

168,412,084

Williams Companies, Inc.

558,100

13,037,216

1,039,876,006

TOTAL ENERGY

1,403,147,959

FINANCIALS - 27.6%

Capital Markets - 3.9%

Ameriprise Financial, Inc.

604,702

27,012,038

Bank of New York Co., Inc.

2,702,300

87,014,060

KKR Private Equity Investors, L.P. Restricted Depositary Units (f)

624,500

13,895,125

Mellon Financial Corp.

1,543,000

53,125,490

Merrill Lynch & Co., Inc.

1,213,600

84,418,016

Morgan Stanley

1,781,500

112,608,615

Nomura Holdings, Inc.

935,000

17,578,000

State Street Corp.

462,153

26,846,468

422,497,812

Commercial Banks - 4.3%

Bank of China Ltd. (H Shares)

9,754,000

4,427,214

Comerica, Inc.

187,900

9,768,921

KeyCorp

728,500

25,992,880

Kookmin Bank sponsored ADR

389,000

32,310,340

Lloyds TSB Group PLC

2,118,800

20,828,563

Marshall & Ilsley Corp.

416,300

19,041,562

Royal Bank of Scotland Group PLC

592,888

19,497,121

U.S. Bancorp, Delaware

1,479,938

45,700,485

Wachovia Corp.

2,890,461

156,316,131

Wells Fargo & Co.

1,832,200

122,903,976

456,787,193

Consumer Finance - 0.5%

American Express Co.

1,045,196

55,625,331

Shares

Value (Note 1)

Diversified Financial Services - 8.3%

Bank of America Corp.

7,302,777

$ 351,263,574

Citigroup, Inc.

5,713,019

275,596,037

FirstRand Ltd.

6,223,429

14,668,891

JPMorgan Chase & Co.

5,797,712

243,503,904

885,032,406

Insurance - 7.6%

ACE Ltd.

2,159,796

109,264,080

Allianz AG sponsored ADR

1,071,900

16,936,020

Allstate Corp.

1,134,400

62,085,712

American International Group, Inc.

4,414,350

260,667,368

Genworth Financial, Inc. Class A (non-vtg.)

993,700

34,620,508

Hartford Financial Services Group, Inc.

912,800

77,222,880

MetLife, Inc. unit

835,300

23,029,221

Montpelier Re Holdings Ltd.

1,063,700

18,391,373

PartnerRe Ltd.

486,620

31,168,011

Swiss Reinsurance Co. (Reg.)

321,551

22,475,692

The St. Paul Travelers Companies, Inc.

2,315,126

103,208,317

Willis Group Holdings Ltd.

766,600

24,607,860

XL Capital Ltd. Class A

415,820

25,489,766

809,166,808

Real Estate Investment Trusts - 0.6%

Developers Diversified Realty Corp.

336,800

17,574,224

Equity Office Properties Trust

557,200

20,343,372

Equity Residential (SBI)

545,000

24,377,850

62,295,446

Thrifts & Mortgage Finance - 2.4%

Countrywide Financial Corp.

292,310

11,131,165

Fannie Mae

2,881,010

138,576,581

Freddie Mac

1,081,300

61,644,913

Golden West Financial Corp., Delaware

248,700

18,453,540

Sovereign Bancorp, Inc.

1,457,558

29,602,993

259,409,192

TOTAL FINANCIALS

2,950,814,188

HEALTH CARE - 7.1%

Health Care Equipment & Supplies - 1.2%

Baxter International, Inc.

2,517,732

92,551,828

Becton, Dickinson & Co.

113,800

6,956,594

Boston Scientific Corp. (a)

1,856,400

31,261,776

130,770,198

Health Care Providers & Services - 0.3%

HCA, Inc.

289,700

12,500,555

Omnicare, Inc.

155,700

7,383,294

UnitedHealth Group, Inc.

221,247

9,907,441

29,791,290

Common Stocks - continued

Shares

Value (Note 1)

HEALTH CARE - continued

Pharmaceuticals - 5.6%

Bristol-Myers Squibb Co. (d)

2,213,300

$ 57,235,938

Eli Lilly & Co.

289,500

16,000,665

Johnson & Johnson

2,162,000

129,547,040

Merck & Co., Inc.

2,146,800

78,207,924

Novartis AG sponsored ADR

485,100

26,156,592

Pfizer, Inc.

5,852,100

137,348,787

Schering-Plough Corp.

3,318,530

63,151,626

Wyeth

2,044,900

90,814,009

598,462,581

TOTAL HEALTH CARE

759,024,069

INDUSTRIALS - 11.2%

Aerospace & Defense - 2.6%

EADS NV

769,667

22,113,173

Honeywell International, Inc.

2,549,025

102,725,708

Lockheed Martin Corp.

1,057,000

75,829,180

The Boeing Co.

293,100

24,007,821

United Technologies Corp.

853,340

54,118,823

278,794,705

Airlines - 0.1%

UAL Corp. (a)

282,011

8,747,981

Building Products - 0.3%

Masco Corp.

950,200

28,163,928

Commercial Services & Supplies - 0.7%

Cendant Corp.

1,938,100

31,571,649

Waste Management, Inc.

1,082,800

38,850,864

70,422,513

Electrical Equipment - 0.4%

Emerson Electric Co.

498,700

41,796,047

Industrial Conglomerates - 3.1%

3M Co.

491,800

39,722,686

General Electric Co.

4,716,490

155,455,510

Textron, Inc.

306,000

28,207,080

Tyco International Ltd.

4,141,146

113,881,515

337,266,791

Machinery - 3.0%

Briggs & Stratton Corp.

755,888

23,515,676

Caterpillar, Inc.

630,700

46,974,536

Deere & Co.

206,800

17,265,732

Dover Corp.

1,153,700

57,027,391

Eaton Corp.

165,700

12,493,780

Illinois Tool Works, Inc.

303,800

14,430,500

Ingersoll-Rand Co. Ltd. Class A

1,354,588

57,949,275

Navistar International Corp. (a)

483,595

11,901,273

SPX Corp.

1,359,200

76,047,240

317,605,403

Road & Rail - 1.0%

Burlington Northern Santa Fe Corp.

947,000

75,049,750

Shares

Value (Note 1)

Laidlaw International, Inc.

268,000

$ 6,753,600

Union Pacific Corp.

287,100

26,688,816

108,492,166

TOTAL INDUSTRIALS

1,191,289,534

INFORMATION TECHNOLOGY - 8.0%

Communications Equipment - 1.0%

Cisco Systems, Inc. (a)

2,414,600

47,157,138

Lucent Technologies, Inc. (a)

5,077,300

12,287,066

Lucent Technologies, Inc. warrants 12/10/07 (a)

8,328

2,249

Motorola, Inc.

2,254,312

45,424,387

Nortel Networks Corp. (a)

621,100

1,389,270

106,260,110

Computers & Peripherals - 2.2%

Dell, Inc. (a)

726,800

17,741,188

EMC Corp. (a)

2,323,400

25,487,698

Hewlett-Packard Co.

3,024,811

95,826,012

Imation Corp.

59,500

2,442,475

International Business Machines Corp.

978,900

75,199,098

Sun Microsystems, Inc. (a)

3,725,375

15,460,306

232,156,777

Electronic Equipment & Instruments - 0.8%

Agilent Technologies, Inc. (a)

289,900

9,149,244

Arrow Electronics, Inc. (a)

775,900

24,983,980

Avnet, Inc. (a)

1,481,530

29,660,231

Solectron Corp. (a)

5,630,400

19,255,968

83,049,423

IT Services - 0.3%

MoneyGram International, Inc.

912,900

30,992,955

Office Electronics - 0.3%

Xerox Corp. (a)

2,842,900

39,544,739

Semiconductors & Semiconductor Equipment - 2.4%

Analog Devices, Inc.

1,151,900

37,022,066

Applied Materials, Inc.

2,108,200

34,321,496

Freescale Semiconductor, Inc.:

Class A (a)

17,710

513,590

Class B (a)

1,557,377

45,786,884

Intel Corp.

4,269,800

80,912,710

Micron Technology, Inc. (a)

1,694,200

25,514,652

Novellus Systems, Inc. (a)

103,500

2,556,450

Samsung Electronics Co. Ltd.

30,180

19,182,608

Teradyne, Inc. (a)

715,400

9,965,522

255,775,978

Software - 1.0%

Microsoft Corp.

3,352,800

78,120,240

Oracle Corp. (a)

731,200

10,595,088

Symantec Corp. (a)

1,496,133

23,249,907

111,965,235

TOTAL INFORMATION TECHNOLOGY

859,745,217

Common Stocks - continued

Shares

Value (Note 1)

MATERIALS - 4.5%

Chemicals - 2.3%

Air Products & Chemicals, Inc.

621,300

$ 39,713,496

Arkema (a)

12,180

475,366

Arkema sponsored ADR (a)

69,005

2,667,036

Ashland, Inc.

353,500

23,578,450

Bayer AG sponsored ADR

270,700

12,427,837

Celanese Corp. Class A

774,100

15,807,122

Chemtura Corp.

2,044,164

19,092,493

Dow Chemical Co.

742,300

28,971,969

E.I. du Pont de Nemours & Co.

755,000

31,408,000

Georgia Gulf Corp.

700,700

17,531,514

Lyondell Chemical Co. (d)

1,336,593

30,287,186

PolyOne Corp. (a)

1,126,200

9,888,036

Rohm & Haas Co.

206,600

10,354,792

Tronox, Inc. Class B

153,376

2,019,962

244,223,259

Containers & Packaging - 0.3%

Amcor Ltd.

1,784,800

8,860,179

Smurfit-Stone Container Corp. (a)

2,320,072

25,381,588

34,241,767

Metals & Mining - 1.3%

Alcan, Inc.

642,100

30,077,407

Alcoa, Inc.

2,399,116

77,635,394

Freeport-McMoRan Copper & Gold, Inc. Class B

195,004

10,805,172

Phelps Dodge Corp.

188,000

15,446,080

133,964,053

Paper & Forest Products - 0.6%

International Paper Co.

1,105,400

35,704,420

Weyerhaeuser Co.

519,600

32,345,100

68,049,520

TOTAL MATERIALS

480,478,599

TELECOMMUNICATION SERVICES - 6.4%

Diversified Telecommunication Services - 5.6%

AT&T, Inc.

7,380,893

205,853,106

BellSouth Corp.

4,481,099

162,215,784

Consolidated Communications Holdings, Inc.

364,300

6,058,309

Embarq Corp. (a)

127,955

5,244,875

Philippine Long Distance Telephone Co. sponsored ADR (d)

633,500

21,868,420

Qwest Communications International, Inc. (a)

5,870,900

47,495,581

Shares

Value (Note 1)

Telkom SA Ltd. sponsored ADR

249,575

$ 18,468,550

Verizon Communications, Inc.

3,793,702

127,051,080

594,255,705

Wireless Telecommunication Services - 0.8%

Sprint Nextel Corp.

2,738,100

54,734,619

Vodafone Group PLC sponsored ADR

1,426,500

30,384,450

85,119,069

TOTAL TELECOMMUNICATION SERVICES

679,374,774

UTILITIES - 3.2%

Electric Utilities - 0.4%

Entergy Corp.

599,000

42,379,250

Independent Power Producers & Energy Traders - 0.7%

AES Corp. (a)

1,644,400

30,339,180

TXU Corp.

788,840

47,164,744

77,503,924

Multi-Utilities - 2.1%

Dominion Resources, Inc.

985,400

73,698,066

Duke Energy Corp.

921,000

27,049,770

NorthWestern Energy Corp.

124,800

4,286,880

Public Service Enterprise Group, Inc.

955,500

63,177,660

Wisconsin Energy Corp.

1,309,400

52,768,820

220,981,196

TOTAL UTILITIES

340,864,370

TOTAL COMMON STOCKS

(Cost $7,842,844,796)

10,505,883,461

Convertible Preferred Stocks - 0.8%

CONSUMER DISCRETIONARY - 0.3%

Automobiles - 0.2%

Ford Motor Co. Capital Trust II 6.50%

402,500

11,165,350

General Motors Corp.:

Series B, 5.25%

359,600

6,584,276

Series C, 6.25%

253,100

5,097,434

22,847,060

Hotels, Restaurants & Leisure - 0.1%

Six Flags, Inc. 7.25% PIERS

384,900

8,279,199

TOTAL CONSUMER DISCRETIONARY

31,126,259

FINANCIALS - 0.2%

Insurance - 0.2%

Conseco, Inc. Series B, 5.50%

143,400

3,972,180

The Chubb Corp. Series B, 7.00%

120,100

4,235,567

Travelers Property Casualty Corp. 4.50%

208,200

5,059,260

XL Capital Ltd. 6.50%

475,300

9,976,547

23,243,554

Convertible Preferred Stocks - continued

Shares

Value (Note 1)

HEALTH CARE - 0.1%

Pharmaceuticals - 0.1%

Schering-Plough Corp. 6.00%

176,300

$ 8,832,630

INFORMATION TECHNOLOGY - 0.2%

Office Electronics - 0.2%

Xerox Corp. Series C, 6.25%

135,550

15,190,682

MATERIALS - 0.0%

Chemicals - 0.0%

Celanese Corp. 4.25%

67,100

2,042,524

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $95,898,028)

80,435,649

Corporate Bonds - 0.6%

Principal
Amount

Convertible Bonds - 0.5%

CONSUMER DISCRETIONARY - 0.2%

Hotels, Restaurants & Leisure - 0.0%

Six Flags, Inc. 4.5% 5/15/15

$ 3,640,000

3,863,132

Media - 0.2%

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

11,400,000

10,801,500

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

22,670,000

13,431,975

24,233,475

TOTAL CONSUMER DISCRETIONARY

28,096,607

INDUSTRIALS - 0.1%

Industrial Conglomerates - 0.1%

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

5,220,000

6,770,340

TELECOMMUNICATION SERVICES - 0.2%

Diversified Telecommunication Services - 0.2%

Level 3 Communications, Inc.:

3.5% 6/15/12

6,220,000

6,091,868

5.25% 12/15/11 (e)

11,850,000

14,492,550

20,584,418

TOTAL CONVERTIBLE BONDS

55,451,365

Nonconvertible Bonds - 0.1%

MATERIALS - 0.1%

Chemicals - 0.1%

Hercules, Inc. 6.5% 6/30/29 unit

15,700,000

12,743,690

TOTAL CORPORATE BONDS

(Cost $69,151,063)

68,195,055

Money Market Funds - 2.1%

Shares

Value (Note 1)

Fidelity Cash Central Fund, 5.11% (b)

49,268,505

$ 49,268,505

Fidelity Securities Lending Cash Central Fund, 5.14% (b)(c)

175,543,038

175,543,038

TOTAL MONEY MARKET FUNDS

(Cost $224,811,543)

224,811,543

TOTAL INVESTMENT
PORTFOLIO - 101.8%

(Cost $8,232,705,430)

10,879,325,708

NET OTHER ASSETS - (1.8)%

(189,512,616)

NET ASSETS - 100%

$ 10,689,813,092

Security Type Abbreviation

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 unaudited listing of the fund's holdings as of its most recent quarter end is available upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Security or a portion of the security is on loan 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 $38,726,025 or 0.4% of net assets.

(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 $13,895,125 or 0.1% of net assets.

Additional information on each holding is as follows:

Security

Acquisition Date

Acquisition Cost

KKR Private Equity Investors, L.P. Restricted Depositary Units

5/3/06

$ 15,612,500

Affiliated Central Funds

Information regarding fiscal year to date income earned by the fund from the affiliated Central funds is as follows:

Fund

Income earned

Fidelity Cash Central Fund

$ 413,865

Fidelity Securities Lending Cash Central Fund

1,063,479

Total

$ 1,477,344

Other Information

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

United States of America

89.1%

France

2.0%

United Kingdom

1.7%

Cayman Islands

1.5%

Netherlands Antilles

1.5%

Others (individually less than 1%)

4.2%

100.0%

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

VIP Equity-Income Portfolio

VIP Equity-Income Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)

Assets

Investment in securities, at value (including securities loaned of $174,191,840) - See accompanying schedule:

Unaffiliated issuers (cost $8,007,893,887)

$ 10,654,514,165

Affiliated Central Funds (cost $224,811,543)

224,811,543

Total Investments (cost $8,232,705,430)

$ 10,879,325,708

Cash

254,868

Foreign currency held at value
(cost $449,779)

449,878

Receivable for investments sold

64,314,375

Receivable for fund shares sold

3,637,215

Dividends receivable

14,172,693

Interest receivable

364,026

Prepaid expenses

21,632

Other receivables

273,402

Total assets

10,962,813,797

Liabilities

Payable for investments purchased

$ 85,935,380

Payable for fund shares redeemed

5,689,951

Accrued management fee

4,086,264

Distribution fees payable

474,139

Other affiliated payables

983,598

Other payables and accrued expenses

288,335

Collateral on securities loaned, at value

175,543,038

Total liabilities

273,000,705

Net Assets

$ 10,689,813,092

Net Assets consist of:

Paid in capital

$ 7,613,401,865

Undistributed net investment income

91,019,752

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

338,775,261

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

2,646,616,214

Net Assets

$ 10,689,813,092

Statement of Assets and Liabilities - continued

June 30, 2006 (Unaudited)

Initial Class:
Net Asset Value, offering price
and redemption price
per share ($7,643,976,176 ÷ 306,303,303 shares)

$ 24.96

Service Class:
Net Asset Value, offering price
and redemption price
per share ($1,055,819,533 ÷ 42,459,366 shares)

$ 24.87

Service Class 2:
Net Asset Value, offering price
and redemption price
per share ($1,891,981,006 ÷ 76,762,891 shares)

$ 24.65

Service Class 2R:
Net Asset Value, offering price
and redemption price
per share ($10,592,657 ÷ 431,654 shares)

$ 24.54

Investor Class:
Net Asset Value, offering price
and redemption price
per share ($87,443,720 ÷ 3,509,435 shares)

$ 24.92

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

Semiannual Report

VIP Equity-Income Portfolio
Financial Statements - continued

Statement of Operations

Six months ended June 30, 2006 (Unaudited)

Investment Income

Dividends

$ 121,002,787

Interest

1,764,495

Income from affiliated Central Funds (including $1,063,479 from security lending)

1,477,344

Total income

124,244,626

Expenses

Management fee

$ 25,337,022

Transfer agent fees

3,666,883

Distribution fees

2,849,221

Accounting and security lending fees

716,683

Independent trustees' compensation

20,876

Appreciation in deferred trustee compensation account

12,410

Custodian fees and expenses

129,522

Audit

61,999

Legal

68,946

Interest

58,940

Miscellaneous

268,106

Total expenses before reductions

33,190,608

Expense reductions

(194,725)

32,995,883

Net investment income (loss)

91,248,743

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

Unaffiliated issuers

362,304,464

Foreign currency transactions

7,684

Total net realized gain (loss)

362,312,148

Change in net unrealized appreciation (depreciation) on:

Investment securities

87,089,117

Assets and liabilities in foreign currencies

(952)

Total change in net unrealized appreciation (depreciation)

87,088,165

Net gain (loss)

449,400,313

Net increase (decrease) in net assets resulting from operations

$ 540,649,056

Statement of Changes in Net Assets

Six months ended
June 30, 2006
(Unaudited)

Year ended
December 31,
2005

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 91,248,743

$ 180,286,741

Net realized gain (loss)

362,312,148

551,406,495

Change in net unrealized appreciation (depreciation)

87,088,165

(133,326,683)

Net increase (decrease) in net assets resulting from operations

540,649,056

598,366,553

Distributions to shareholders from net investment income

(180,405,824)

(175,959,121)

Distributions to shareholders from net realized gain

(556,239,405)

(394,382,958)

Total distributions

(736,645,229)

(570,342,079)

Share transactions - net increase (decrease)

159,472,265

(588,913,583)

Redemption fees

662

2,560

Total increase (decrease) in net assets

(36,523,246)

(560,886,549)

Net Assets

Beginning of period

10,726,336,338

11,287,222,887

End of period (including undistributed net investment income of $91,019,752 and undistributed net investment income of $180,172,674, respectively)

$ 10,689,813,092

$ 10,726,336,338

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

VIP Equity-Income Portfolio

Financial Highlights - Initial Class

Six months ended
June 30, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002

2001

Net asset value, beginning of period

$ 25.49

$ 25.37

$ 23.18

$ 18.16

$ 22.75

$ 25.52

Income from Investment Operations

Net investment income (loss) E

.22

.42

.40

.36

.34

.34

Net realized and unrealized gain (loss)

1.04

1.00

2.24

5.01

(4.08)

(1.51)

Total from investment operations

1.26

1.42

2.64

5.37

(3.74)

(1.17)

Distributions from net investment income

(.45)

(.41)

(.36)

(.35)

(.36)

(.42)

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

(.49)

(1.18)

Total distributions

(1.79)

(1.30)

(.45)

(.35)

(.85)

(1.60)

Redemption fees added to paid in capital

- E, G

- E, G

- E, G

- E, G

- E, G

-

Net asset value, end of period

$ 24.96

$ 25.49

$ 25.37

$ 23.18

$ 18.16

$ 22.75

Total Return B, C, D

5.12%

5.87%

11.53%

30.33%

(16.95)%

(4.96)%

Ratios to Average Net Assets F

Expenses before reductions

.56% A

.56%

.58%

.57%

.57%

.58%

Expenses net of fee waivers, if any

.56% A

.56%

.58%

.57%

.57%

.58%

Expenses net of all reductions

.55% A

.55%

.57%

.56%

.56%

.57%

Net investment income (loss)

1.73% A

1.71%

1.71%

1.83%

1.70%

1.47%

Supplemental Data

Net assets, end of period (000 omitted)

$ 7,643,976

$ 7,875,801

$ 8,689,829

$ 8,402,963

$ 6,895,940

$ 9,256,205

Portfolio turnover rate

20% A

19%

22%

26%

25%

24%

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 fee 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, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002

2001

Net asset value, beginning of period

$ 25.39

$ 25.28

$ 23.11

$ 18.10

$ 22.67

$ 25.45

Income from Investment Operations

Net investment income (loss) E

.20

.39

.38

.34

.32

.31

Net realized and unrealized gain (loss)

1.04

1.00

2.22

5.00

(4.06)

(1.51)

Total from investment operations

1.24

1.39

2.60

5.34

(3.74)

(1.20)

Distributions from net investment income

(.42)

(.39)

(.34)

(.33)

(.34)

(.40)

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

(.49)

(1.18)

Total distributions

(1.76)

(1.28)

(.43)

(.33)

(.83)

(1.58)

Redemption fees added to paid in capital

- E, G

- E, G

- E, G

- E, G

- E, G

-

Net asset value, end of period

$ 24.87

$ 25.39

$ 25.28

$ 23.11

$ 18.10

$ 22.67

Total Return B, C, D

5.07%

5.76%

11.38%

30.22%

(17.00)%

(5.09)%

Ratios to Average Net Assets F

Expenses before reductions

.66% A

.66%

.68%

.67%

.67%

.68%

Expenses net of fee waivers, if any

.66% A

.66%

.68%

.67%

.67%

.68%

Expenses net of all reductions

.65% A

.65%

.67%

.66%

.66%

.67%

Net investment income (loss)

1.63% A

1.61%

1.61%

1.73%

1.60%

1.37%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,055,820

$ 1,079,838

$ 1,170,778

$ 1,071,483

$ 771,516

$ 836,017

Portfolio turnover rate

20% A

19%

22%

26%

25%

24%

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 fee 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, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002

2001

Net asset value, beginning of period

$ 25.17

$ 25.09

$ 22.96

$ 18.00

$ 22.59

$ 25.41

Income from Investment Operations

Net investment income (loss) E

.18

.35

.34

.31

.28

.27

Net realized and unrealized gain (loss)

1.03

.98

2.21

4.97

(4.04)

(1.50)

Total from investment operations

1.21

1.33

2.55

5.28

(3.76)

(1.23)

Distributions from net investment income

(.39)

(.36)

(.33)

(.32)

(.34)

(.41)

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

(.49)

(1.18)

Total distributions

(1.73)

(1.25)

(.42)

(.32)

(.83)

(1.59)

Redemption fees added to paid in capital

- E, G

- E, G

- E, G

- E, G

- E, G

-

Net asset value, end of period

$ 24.65

$ 25.17

$ 25.09

$ 22.96

$ 18.00

$ 22.59

Total Return B, C, D

5.00%

5.57%

11.23%

30.03%

(17.15)%

(5.23)%

Ratios to Average Net Assets F

Expenses before reductions

.81% A

.81%

.83%

.82%

.83%

.84%

Expenses net of fee waivers, if any

.81% A

.81%

.83%

.82%

.83%

.84%

Expenses net of all reductions

.80% A

.80%

.82%

.81%

.82%

.83%

Net investment income (loss)

1.48% A

1.46%

1.46%

1.58%

1.44%

1.21%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,891,981

$ 1,723,546

$ 1,420,999

$ 916,679

$ 403,632

$ 226,078

Portfolio turnover rate

20% A

19%

22%

26%

25%

24%

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 fee 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 2R

Six months ended
June 30, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002 F

Net asset value, beginning of period

$ 25.08

$ 25.01

$ 22.91

$ 17.99

$ 21.82

Income from Investment Operations

Net investment income (loss) E

.18

.35

.34

.31

.18

Net realized and unrealized gain (loss)

1.02

.99

2.20

4.96

(4.01)

Total from investment operations

1.20

1.34

2.54

5.27

(3.83)

Distributions from net investment income

(.40)

(.38)

(.35)

(.35)

-

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

-

Total distributions

(1.74)

(1.27)

(.44)

(.35)

-

Redemption fees added to paid in capital E, H

-

-

-

-

-

Net asset value, end of period

$ 24.54

$ 25.08

$ 25.01

$ 22.91

$ 17.99

Total Return B, C, D

4.99%

5.61%

11.22%

30.05%

(17.55)%

Ratios to Average Net Assets G

Expenses before reductions

.81% A

.81%

.83%

.82%

.85% A

Expenses net of fee waivers, if any

.81% A

.81%

.83%

.82%

.85% A

Expenses net of all reductions

.80% A

.80%

.82%

.81%

.84% A

Net investment income (loss)

1.48% A

1.46%

1.46%

1.57%

1.45% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 10,593

$ 9,651

$ 5,617

$ 1,891

$ 471

Portfolio turnover rate

20% A

19%

22%

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 fee 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.

VIP Equity-Income Portfolio

Financial Highlights - Investor Class

Six months ended
June 30, 2006

Year ended December 31,

Selected Per-Share Data

(Unaudited)

2005 F

Net asset value, beginning of period

$ 25.48

$ 24.46

Income from Investment Operations

Net investment income (loss) E

.20

.17

Net realized and unrealized gain (loss)

1.04

.85

Total from investment operations

1.24

1.02

Distributions from net investment income

(.46)

-

Distributions from net realized gain

(1.34)

-

Total distributions

(1.80)

-

Redemption fees added to paid in capital E, H

-

-

Net asset value, end of period

$ 24.92

$ 25.48

Total Return B, C, D

5.05%

4.17%

Ratios to Average Net Assets G

Expenses before reductions

.69% A

.74% A

Expenses net of fee waivers, if any

.69% A

.74% A

Expenses net of all reductions

.68% A

.73% A

Net investment income (loss)

1.60% A

1.54% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 87,444

$ 37,500

Portfolio turnover rate

20% A

19%

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 July 21, 2005 (commencement of sale of shares) to December 31, 2005. 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 fee 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, 2006 (Unaudited)

1. Significant Accounting Policies.

VIP Equity-Income Portfolio (the Fund) is a fund of Variable Insurance Products Fund, (the trust) (referred to in this report as VIP 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, Service Class 2R shares, and Investor Class 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 transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The Fund may invest in affiliated money market central funds (Money Market Central Funds), which are open-end investment companies available to investment companies and other accounts managed by FMR and its affiliates.

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. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.

When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used can not be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.

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 and may include proceeds received from litigation. 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 return of capital distributions or capital gain distributions. 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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

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

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Prior to July 1, 2006, deferred amounts were treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and were marked-to-market. Effective July 1, 2006, deferred amounts will be directly invested in a cross-section of Fidelity funds. Deferred amounts remain in the Fund until distributed in accordance with the Plan.

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), market discount, deferred trustees compensation, 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

$ 3,111,279,174

Unrealized depreciation

(474,927,088)

Net unrealized appreciation (depreciation)

$ 2,636,352,086

Cost for federal income tax purposes

$ 8,242,973,622

New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets and results of operations.

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 which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

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.

Purchases and sales of securities, other than short-term securities, aggregated $1,056,452,346 and $1,527,484,468, respectively.

VIP Equity-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 .20% of the Fund's average net assets and a group fee rate that averaged .27% 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 .47% 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.

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

$ 541,167

Service Class 2

2,295,018

Service Class 2R

13,036

$ 2,849,221

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 class. Each class with the exception of Investor Class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. Investor Class pays a monthly asset-based transfer agent fee of .18% of its month end net assets. The total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 2,619,352

Service Class

358,646

Service Class 2

622,319

Service Class 2R

3,474

Investor Class

63,092

$ 3,666,883

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.

Affiliated Central Funds. The Fund may invest in Money Market Central Funds which seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.

The Money Market Central Funds do not pay a management fee.

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 were $4,476 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 affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Daily
Loan Balance

Weighted Average
Interest Rate

Interest
Expense

Borrower

$ 9,834,902

4.77%

$ 53,408

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 Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $16,111 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

6. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, 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. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from affiliated central funds.

7. 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. The average daily loan balance during the period for which loans were outstanding amounted to $6,306,333. The weighted average interest rate was 5.27%. At period end, there were no bank borrowings outstanding.

8. 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 $193,508 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 $1,217.

9. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

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.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
June 30, 2006

Year ended
December 31, 2005 A

From net investment income

Initial Class

$ 134,846,596

$ 137,602,640

Service Class

17,470,661

17,563,270

Service Class 2

27,087,115

20,698,826

Service Class 2R

157,721

94,385

Investor Class

843,731

-

Total

$ 180,405,824

$ 175,959,121

From net realized gain

Initial Class

$ 405,144,480

$ 302,386,049

Service Class

55,739,729

40,600,805

Service Class 2

92,358,102

51,172,097

Service Class 2R

523,133

224,007

Investor Class

2,473,961

-

Total

$ 556,239,405

$ 394,382,958

A Distributions for Investor Class are for the period July 21, 2005 (commencement of sale of shares) to December 31, 2005.

VIP Equity-Income Portfolio

11. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended
June 30,
2006

Year ended
December 31,
2005 A

Six months ended
June 30,
2006

Year ended
December 31,
2005 A

Initial Class

Shares sold

3,839,226

9,995,592

$ 96,843,423

$ 243,588,116

Reinvestment of distributions

22,240,160

18,234,094

539,991,076

439,988,689

Shares redeemed

(28,768,916)

(61,778,854)

(726,539,912)

(1,504,207,375)

Net increase (decrease)

(2,689,530)

(33,549,168)

$ (89,705,413)

$ (820,630,570)

Service Class

Shares sold

971,404

1,664,065

$ 24,253,794

$ 40,334,290

Reinvestment of distributions

3,023,973

2,417,459

73,210,390

58,164,074

Shares redeemed

(4,066,015)

(7,864,758)

(102,209,268)

(190,937,287)

Net increase (decrease)

(70,638)

(3,783,234)

$ (4,745,084)

$ (92,438,923)

Service Class 2

Shares sold

7,622,309

15,407,445

$ 189,522,765

$ 370,175,387

Reinvestment of distributions

4,974,811

3,009,670

119,445,217

71,870,922

Shares redeemed

(4,302,833)

(6,593,873)

(107,259,782)

(158,371,244)

Net increase (decrease)

8,294,287

11,823,242

$ 201,708,200

$ 283,675,065

Service Class 2R

Shares sold

102,796

229,939

$ 2,550,417

$ 5,501,232

Reinvestment of distributions

28,488

13,378

680,853

318,391

Shares redeemed

(84,414)

(83,085)

(2,095,562)

(1,983,529)

Net increase (decrease)

46,870

160,232

$ 1,135,708

$ 3,836,094

Investor Class

Shares sold

2,051,820

1,480,945

$ 51,613,559

$ 36,874,007

Reinvestment of distributions

136,756

-

3,317,692

-

Shares redeemed

(150,995)

(9,091)

(3,852,397)

(229,256)

Net increase (decrease)

2,037,581

1,471,854

$ 51,078,854

$ 36,644,751

A Share transactions for Investor Class are for the period July 21, 2005 (commencement of sale of shares) to December 31, 2005.

Semiannual Report

Board Approval of Investment Advisory Contracts and Management Fees

VIP Equity-Income Portfolio

On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub-advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non-discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees' counsel, considered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.

The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund's management contract or sub-advisory agreements; (ii) the investment process or strategies employed in the management of the fund's assets; (iii) the nature or level of services provided under the fund's management contract or sub-advisory agreements; (iv) the day-to-day management of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund's management contract or sub-advisory agreements under the Investment Company Act of 1940.

Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund's portfolio manager would not change, it did not consider the fund's investment performance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.

In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund's management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.

Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund's Agreement is fair and reasonable, and that the fund's Agreement should be approved.

Semiannual Report

Semiannual Report

VIP Equity-Income Portfolio

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

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

Fidelity Research & Analysis Company
(formerly 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 Service Agents

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Fidelity Service Company, Inc.
Boston, MA

Custodian

The Northern Trust Company
Chicago, IL

VIPEI-SANN-0806
1.705693.108

Fidelity® Variable Insurance Products:

Equity-Income Portfolio - Service Class 2R

Semiannual Report

June 30, 2006

(2_fidelity_logos) (Registered_Trademark)

Contents

Shareholder Expense Example

<Click Here>

An example of shareholder expenses.

Investment Changes

<Click Here>

A summary of major shifts in the fund's investments over the past six months.

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

Board Approval of Investment Advisory Contracts and Management Fees

<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

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.

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.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

VIP Equity-Income Portfolio

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
January 1, 2006

Ending
Account Value
June 30, 2006

Expenses Paid
During Period*
January 1, 2006
to June 30, 2006

Initial Class

Actual

$ 1,000.00

$ 1,051.20

$ 2.85

HypotheticalA

$ 1,000.00

$ 1,022.02

$ 2.81

Service Class

Actual

$ 1,000.00

$ 1,050.70

$ 3.36

HypotheticalA

$ 1,000.00

$ 1,021.52

$ 3.31

Service Class 2

Actual

$ 1,000.00

$ 1,050.00

$ 4.12

HypotheticalA

$ 1,000.00

$ 1,020.78

$ 4.06

Service Class 2R

Actual

$ 1,000.00

$ 1,049.90

$ 4.12

HypotheticalA

$ 1,000.00

$ 1,020.78

$ 4.06

Investor Class

Actual

$ 1,000.00

$ 1,050.50

$ 3.51

HypotheticalA

$ 1,000.00

$ 1,021.37

$ 3.46

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Annualized
Expense Ratio

Initial Class

.56%

Service Class

.66%

Service Class 2

.81%

Service Class 2R

.81%

Investor Class

.69%

Semiannual Report

VIP Equity-Income Portfolio

Investment Changes

Top Ten Stocks as of June 30, 2006

% of fund's
net assets

% of fund's net assets
6 months ago

Exxon Mobil Corp.

4.1

3.1

Bank of America Corp.

3.3

3.0

Citigroup, Inc.

2.6

2.7

American International Group, Inc.

2.5

2.7

JPMorgan Chase & Co.

2.3

2.3

AT&T, Inc.

1.9

1.7

Total SA sponsored ADR

1.6

2.1

Schlumberger Ltd. (NY Shares)

1.5

1.3

BellSouth Corp.

1.5

1.2

Wachovia Corp.

1.5

1.5

22.8

Top Five Market Sectors as of June 30, 2006

% of fund's
net assets

% of fund's net assets
6 months ago

Financials

27.8

28.9

Energy

13.1

11.8

Consumer Discretionary

12.1

11.9

Industrials

11.3

11.0

Information Technology

8.2

9.0

Asset Allocation (% of fund's net assets)

As of June 30, 2006*

As of December 31, 2005**

Stocks 99.1%

Stocks 98.8%

Bonds 0.6%

Bonds 0.7%

Short-Term Investments
and Net Other Assets 0.3%

Short-Term Investments
and Net Other Assets 0.5%

* Foreign investments

10.9%

** Foreign investments

11.8%



Semiannual Report

VIP Equity-Income Portfolio

Investments June 30, 2006 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.3%

Shares

Value (Note 1)

CONSUMER DISCRETIONARY - 11.6%

Auto Components - 0.2%

American Axle & Manufacturing Holdings, Inc.

336,400

$ 5,755,804

Johnson Controls, Inc.

203,425

16,725,604

22,481,408

Automobiles - 1.3%

General Motors Corp. (d)

976,400

29,086,956

Harley-Davidson, Inc.

249,400

13,689,566

Hyundai Motor Co.

187,710

15,947,535

Monaco Coach Corp.

188,200

2,390,140

Renault SA

229,101

24,617,544

Toyota Motor Corp. sponsored ADR

430,700

45,046,913

Winnebago Industries, Inc. (d)

374,700

11,630,688

142,409,342

Diversified Consumer Services - 0.1%

Service Corp. International (SCI)

1,580,000

12,861,200

Hotels, Restaurants & Leisure - 0.3%

Gaylord Entertainment Co. (a)

207,165

9,040,681

McDonald's Corp.

373,000

12,532,800

WMS Industries, Inc. (a)

217,600

5,960,064

27,533,545

Household Durables - 1.2%

Newell Rubbermaid, Inc.

2,509,600

64,822,968

Sony Corp. sponsored ADR

289,900

12,767,196

Whirlpool Corp.

624,534

51,617,735

129,207,899

Internet & Catalog Retail - 0.2%

Liberty Media Holding Corp. - Interactive Series A (a)

899,869

15,531,739

Leisure Equipment & Products - 0.3%

Eastman Kodak Co. (d)

1,464,000

34,813,920

Media - 5.5%

CBS Corp. Class B

1,667,943

45,117,858

Clear Channel Communications, Inc.

2,831,900

87,647,305

Comcast Corp. Class A (a)

2,427,891

79,489,151

Discovery Holding Co. Class A (a)

368,167

5,386,283

Gannett Co., Inc.

289,800

16,208,514

Liberty Media Holding Corp. - Capital Series A (a)

179,973

15,076,338

Live Nation, Inc. (a)

434,225

8,840,821

McGraw-Hill Companies, Inc.

41,500

2,084,545

News Corp. Class A

1,140,016

21,865,507

NTL, Inc.

812,888

20,240,899

The McClatchy Co. Class A (d)

153,591

6,162,071

The New York Times Co. Class A (d)

929,525

22,810,544

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

1,481,965

20,688,231

The Walt Disney Co.

1,800,000

54,000,000

Time Warner, Inc.

5,798,350

100,311,455

Shares

Value (Note 1)

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

1,503,743

$ 53,894,149

Vivendi Universal SA sponsored ADR

708,000

24,716,280

584,539,951

Multiline Retail - 1.3%

Big Lots, Inc. (a)(d)

1,704,756

29,117,237

Dollar Tree Stores, Inc. (a)

1,349,400

35,759,100

Family Dollar Stores, Inc.

1,072,100

26,191,403

Federated Department Stores, Inc.

1,100,800

40,289,280

Sears Holdings Corp. (a)

67,387

10,434,203

141,791,223

Specialty Retail - 0.9%

AnnTaylor Stores Corp. (a)

1,019,650

44,232,417

Home Depot, Inc.

549,700

19,673,763

OfficeMax, Inc.

146,000

5,949,500

RadioShack Corp.

1,425,700

19,959,800

Tiffany & Co., Inc.

229,800

7,587,996

97,403,476

Textiles, Apparel & Luxury Goods - 0.3%

Liz Claiborne, Inc.

553,040

20,495,662

VF Corp.

229,300

15,574,056

36,069,718

TOTAL CONSUMER DISCRETIONARY

1,244,643,421

CONSUMER STAPLES - 5.6%

Beverages - 0.5%

Anheuser-Busch Companies, Inc. (d)

1,222,900

55,752,011

Food & Staples Retailing - 1.2%

Wal-Mart Stores, Inc.

2,665,800

128,411,586

Food Products - 0.5%

Corn Products International, Inc.

620,700

18,993,420

Kraft Foods, Inc. Class A

1,170,900

36,180,810

55,174,230

Household Products - 1.6%

Colgate-Palmolive Co.

1,855,400

111,138,460

Kimberly-Clark Corp.

763,600

47,114,120

Procter & Gamble Co.

265,442

14,758,575

173,011,155

Personal Products - 0.6%

Avon Products, Inc.

1,950,070

60,452,170

Tobacco - 1.2%

Altria Group, Inc.

1,684,600

123,700,178

TOTAL CONSUMER STAPLES

596,501,330

ENERGY - 13.1%

Energy Equipment & Services - 3.4%

Baker Hughes, Inc.

1,109,100

90,779,835

BJ Services Co.

726,890

27,083,921

Halliburton Co.

475,800

35,309,118

Common Stocks - continued

Shares

Value (Note 1)

ENERGY - continued

Energy Equipment & Services - continued

Noble Corp.

639,300

$ 47,576,706

Schlumberger Ltd. (NY Shares)

2,496,120

162,522,373

363,271,953

Oil, Gas & Consumable Fuels - 9.7%

Apache Corp.

589,980

40,266,135

BP PLC sponsored ADR

1,406,942

97,937,233

Chevron Corp.

2,076,142

128,845,373

ConocoPhillips

893,000

58,518,290

Double Hull Tankers, Inc.

409,300

5,513,271

El Paso Corp.

1,042,900

15,643,500

EOG Resources, Inc.

393,300

27,271,422

Exxon Mobil Corp.

7,122,636

436,973,712

Hess Corp.

186,200

9,840,670

Kerr-McGee Corp.

290,000

20,111,500

Lukoil Oil Co. sponsored ADR

208,400

17,505,600

Total SA sponsored ADR

2,570,392

168,412,084

Williams Companies, Inc.

558,100

13,037,216

1,039,876,006

TOTAL ENERGY

1,403,147,959

FINANCIALS - 27.6%

Capital Markets - 3.9%

Ameriprise Financial, Inc.

604,702

27,012,038

Bank of New York Co., Inc.

2,702,300

87,014,060

KKR Private Equity Investors, L.P. Restricted Depositary Units (f)

624,500

13,895,125

Mellon Financial Corp.

1,543,000

53,125,490

Merrill Lynch & Co., Inc.

1,213,600

84,418,016

Morgan Stanley

1,781,500

112,608,615

Nomura Holdings, Inc.

935,000

17,578,000

State Street Corp.

462,153

26,846,468

422,497,812

Commercial Banks - 4.3%

Bank of China Ltd. (H Shares)

9,754,000

4,427,214

Comerica, Inc.

187,900

9,768,921

KeyCorp

728,500

25,992,880

Kookmin Bank sponsored ADR

389,000

32,310,340

Lloyds TSB Group PLC

2,118,800

20,828,563

Marshall & Ilsley Corp.

416,300

19,041,562

Royal Bank of Scotland Group PLC

592,888

19,497,121

U.S. Bancorp, Delaware

1,479,938

45,700,485

Wachovia Corp.

2,890,461

156,316,131

Wells Fargo & Co.

1,832,200

122,903,976

456,787,193

Consumer Finance - 0.5%

American Express Co.

1,045,196

55,625,331

Shares

Value (Note 1)

Diversified Financial Services - 8.3%

Bank of America Corp.

7,302,777

$ 351,263,574

Citigroup, Inc.

5,713,019

275,596,037

FirstRand Ltd.

6,223,429

14,668,891

JPMorgan Chase & Co.

5,797,712

243,503,904

885,032,406

Insurance - 7.6%

ACE Ltd.

2,159,796

109,264,080

Allianz AG sponsored ADR

1,071,900

16,936,020

Allstate Corp.

1,134,400

62,085,712

American International Group, Inc.

4,414,350

260,667,368

Genworth Financial, Inc. Class A (non-vtg.)

993,700

34,620,508

Hartford Financial Services Group, Inc.

912,800

77,222,880

MetLife, Inc. unit

835,300

23,029,221

Montpelier Re Holdings Ltd.

1,063,700

18,391,373

PartnerRe Ltd.

486,620

31,168,011

Swiss Reinsurance Co. (Reg.)

321,551

22,475,692

The St. Paul Travelers Companies, Inc.

2,315,126

103,208,317

Willis Group Holdings Ltd.

766,600

24,607,860

XL Capital Ltd. Class A

415,820

25,489,766

809,166,808

Real Estate Investment Trusts - 0.6%

Developers Diversified Realty Corp.

336,800

17,574,224

Equity Office Properties Trust

557,200

20,343,372

Equity Residential (SBI)

545,000

24,377,850

62,295,446

Thrifts & Mortgage Finance - 2.4%

Countrywide Financial Corp.

292,310

11,131,165

Fannie Mae

2,881,010

138,576,581

Freddie Mac

1,081,300

61,644,913

Golden West Financial Corp., Delaware

248,700

18,453,540

Sovereign Bancorp, Inc.

1,457,558

29,602,993

259,409,192

TOTAL FINANCIALS

2,950,814,188

HEALTH CARE - 7.1%

Health Care Equipment & Supplies - 1.2%

Baxter International, Inc.

2,517,732

92,551,828

Becton, Dickinson & Co.

113,800

6,956,594

Boston Scientific Corp. (a)

1,856,400

31,261,776

130,770,198

Health Care Providers & Services - 0.3%

HCA, Inc.

289,700

12,500,555

Omnicare, Inc.

155,700

7,383,294

UnitedHealth Group, Inc.

221,247

9,907,441

29,791,290

Common Stocks - continued

Shares

Value (Note 1)

HEALTH CARE - continued

Pharmaceuticals - 5.6%

Bristol-Myers Squibb Co. (d)

2,213,300

$ 57,235,938

Eli Lilly & Co.

289,500

16,000,665

Johnson & Johnson

2,162,000

129,547,040

Merck & Co., Inc.

2,146,800

78,207,924

Novartis AG sponsored ADR

485,100

26,156,592

Pfizer, Inc.

5,852,100

137,348,787

Schering-Plough Corp.

3,318,530

63,151,626

Wyeth

2,044,900

90,814,009

598,462,581

TOTAL HEALTH CARE

759,024,069

INDUSTRIALS - 11.2%

Aerospace & Defense - 2.6%

EADS NV

769,667

22,113,173

Honeywell International, Inc.

2,549,025

102,725,708

Lockheed Martin Corp.

1,057,000

75,829,180

The Boeing Co.

293,100

24,007,821

United Technologies Corp.

853,340

54,118,823

278,794,705

Airlines - 0.1%

UAL Corp. (a)

282,011

8,747,981

Building Products - 0.3%

Masco Corp.

950,200

28,163,928

Commercial Services & Supplies - 0.7%

Cendant Corp.

1,938,100

31,571,649

Waste Management, Inc.

1,082,800

38,850,864

70,422,513

Electrical Equipment - 0.4%

Emerson Electric Co.

498,700

41,796,047

Industrial Conglomerates - 3.1%

3M Co.

491,800

39,722,686

General Electric Co.

4,716,490

155,455,510

Textron, Inc.

306,000

28,207,080

Tyco International Ltd.

4,141,146

113,881,515

337,266,791

Machinery - 3.0%

Briggs & Stratton Corp.

755,888

23,515,676

Caterpillar, Inc.

630,700

46,974,536

Deere & Co.

206,800

17,265,732

Dover Corp.

1,153,700

57,027,391

Eaton Corp.

165,700

12,493,780

Illinois Tool Works, Inc.

303,800

14,430,500

Ingersoll-Rand Co. Ltd. Class A

1,354,588

57,949,275

Navistar International Corp. (a)

483,595

11,901,273

SPX Corp.

1,359,200

76,047,240

317,605,403

Road & Rail - 1.0%

Burlington Northern Santa Fe Corp.

947,000

75,049,750

Shares

Value (Note 1)

Laidlaw International, Inc.

268,000

$ 6,753,600

Union Pacific Corp.

287,100

26,688,816

108,492,166

TOTAL INDUSTRIALS

1,191,289,534

INFORMATION TECHNOLOGY - 8.0%

Communications Equipment - 1.0%

Cisco Systems, Inc. (a)

2,414,600

47,157,138

Lucent Technologies, Inc. (a)

5,077,300

12,287,066

Lucent Technologies, Inc. warrants 12/10/07 (a)

8,328

2,249

Motorola, Inc.

2,254,312

45,424,387

Nortel Networks Corp. (a)

621,100

1,389,270

106,260,110

Computers & Peripherals - 2.2%

Dell, Inc. (a)

726,800

17,741,188

EMC Corp. (a)

2,323,400

25,487,698

Hewlett-Packard Co.

3,024,811

95,826,012

Imation Corp.

59,500

2,442,475

International Business Machines Corp.

978,900

75,199,098

Sun Microsystems, Inc. (a)

3,725,375

15,460,306

232,156,777

Electronic Equipment & Instruments - 0.8%

Agilent Technologies, Inc. (a)

289,900

9,149,244

Arrow Electronics, Inc. (a)

775,900

24,983,980

Avnet, Inc. (a)

1,481,530

29,660,231

Solectron Corp. (a)

5,630,400

19,255,968

83,049,423

IT Services - 0.3%

MoneyGram International, Inc.

912,900

30,992,955

Office Electronics - 0.3%

Xerox Corp. (a)

2,842,900

39,544,739

Semiconductors & Semiconductor Equipment - 2.4%

Analog Devices, Inc.

1,151,900

37,022,066

Applied Materials, Inc.

2,108,200

34,321,496

Freescale Semiconductor, Inc.:

Class A (a)

17,710

513,590

Class B (a)

1,557,377

45,786,884

Intel Corp.

4,269,800

80,912,710

Micron Technology, Inc. (a)

1,694,200

25,514,652

Novellus Systems, Inc. (a)

103,500

2,556,450

Samsung Electronics Co. Ltd.

30,180

19,182,608

Teradyne, Inc. (a)

715,400

9,965,522

255,775,978

Software - 1.0%

Microsoft Corp.

3,352,800

78,120,240

Oracle Corp. (a)

731,200

10,595,088

Symantec Corp. (a)

1,496,133

23,249,907

111,965,235

TOTAL INFORMATION TECHNOLOGY

859,745,217

Common Stocks - continued

Shares

Value (Note 1)

MATERIALS - 4.5%

Chemicals - 2.3%

Air Products & Chemicals, Inc.

621,300

$ 39,713,496

Arkema (a)

12,180

475,366

Arkema sponsored ADR (a)

69,005

2,667,036

Ashland, Inc.

353,500

23,578,450

Bayer AG sponsored ADR

270,700

12,427,837

Celanese Corp. Class A

774,100

15,807,122

Chemtura Corp.

2,044,164

19,092,493

Dow Chemical Co.

742,300

28,971,969

E.I. du Pont de Nemours & Co.

755,000

31,408,000

Georgia Gulf Corp.

700,700

17,531,514

Lyondell Chemical Co. (d)

1,336,593

30,287,186

PolyOne Corp. (a)

1,126,200

9,888,036

Rohm & Haas Co.

206,600

10,354,792

Tronox, Inc. Class B

153,376

2,019,962

244,223,259

Containers & Packaging - 0.3%

Amcor Ltd.

1,784,800

8,860,179

Smurfit-Stone Container Corp. (a)

2,320,072

25,381,588

34,241,767

Metals & Mining - 1.3%

Alcan, Inc.

642,100

30,077,407

Alcoa, Inc.

2,399,116

77,635,394

Freeport-McMoRan Copper & Gold, Inc. Class B

195,004

10,805,172

Phelps Dodge Corp.

188,000

15,446,080

133,964,053

Paper & Forest Products - 0.6%

International Paper Co.

1,105,400

35,704,420

Weyerhaeuser Co.

519,600

32,345,100

68,049,520

TOTAL MATERIALS

480,478,599

TELECOMMUNICATION SERVICES - 6.4%

Diversified Telecommunication Services - 5.6%

AT&T, Inc.

7,380,893

205,853,106

BellSouth Corp.

4,481,099

162,215,784

Consolidated Communications Holdings, Inc.

364,300

6,058,309

Embarq Corp. (a)

127,955

5,244,875

Philippine Long Distance Telephone Co. sponsored ADR (d)

633,500

21,868,420

Qwest Communications International, Inc. (a)

5,870,900

47,495,581

Shares

Value (Note 1)

Telkom SA Ltd. sponsored ADR

249,575

$ 18,468,550

Verizon Communications, Inc.

3,793,702

127,051,080

594,255,705

Wireless Telecommunication Services - 0.8%

Sprint Nextel Corp.

2,738,100

54,734,619

Vodafone Group PLC sponsored ADR

1,426,500

30,384,450

85,119,069

TOTAL TELECOMMUNICATION SERVICES

679,374,774

UTILITIES - 3.2%

Electric Utilities - 0.4%

Entergy Corp.

599,000

42,379,250

Independent Power Producers & Energy Traders - 0.7%

AES Corp. (a)

1,644,400

30,339,180

TXU Corp.

788,840

47,164,744

77,503,924

Multi-Utilities - 2.1%

Dominion Resources, Inc.

985,400

73,698,066

Duke Energy Corp.

921,000

27,049,770

NorthWestern Energy Corp.

124,800

4,286,880

Public Service Enterprise Group, Inc.

955,500

63,177,660

Wisconsin Energy Corp.

1,309,400

52,768,820

220,981,196

TOTAL UTILITIES

340,864,370

TOTAL COMMON STOCKS

(Cost $7,842,844,796)

10,505,883,461

Convertible Preferred Stocks - 0.8%

CONSUMER DISCRETIONARY - 0.3%

Automobiles - 0.2%

Ford Motor Co. Capital Trust II 6.50%

402,500

11,165,350

General Motors Corp.:

Series B, 5.25%

359,600

6,584,276

Series C, 6.25%

253,100

5,097,434

22,847,060

Hotels, Restaurants & Leisure - 0.1%

Six Flags, Inc. 7.25% PIERS

384,900

8,279,199

TOTAL CONSUMER DISCRETIONARY

31,126,259

FINANCIALS - 0.2%

Insurance - 0.2%

Conseco, Inc. Series B, 5.50%

143,400

3,972,180

The Chubb Corp. Series B, 7.00%

120,100

4,235,567

Travelers Property Casualty Corp. 4.50%

208,200

5,059,260

XL Capital Ltd. 6.50%

475,300

9,976,547

23,243,554

Convertible Preferred Stocks - continued

Shares

Value (Note 1)

HEALTH CARE - 0.1%

Pharmaceuticals - 0.1%

Schering-Plough Corp. 6.00%

176,300

$ 8,832,630

INFORMATION TECHNOLOGY - 0.2%

Office Electronics - 0.2%

Xerox Corp. Series C, 6.25%

135,550

15,190,682

MATERIALS - 0.0%

Chemicals - 0.0%

Celanese Corp. 4.25%

67,100

2,042,524

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $95,898,028)

80,435,649

Corporate Bonds - 0.6%

Principal
Amount

Convertible Bonds - 0.5%

CONSUMER DISCRETIONARY - 0.2%

Hotels, Restaurants & Leisure - 0.0%

Six Flags, Inc. 4.5% 5/15/15

$ 3,640,000

3,863,132

Media - 0.2%

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

11,400,000

10,801,500

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

22,670,000

13,431,975

24,233,475

TOTAL CONSUMER DISCRETIONARY

28,096,607

INDUSTRIALS - 0.1%

Industrial Conglomerates - 0.1%

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

5,220,000

6,770,340

TELECOMMUNICATION SERVICES - 0.2%

Diversified Telecommunication Services - 0.2%

Level 3 Communications, Inc.:

3.5% 6/15/12

6,220,000

6,091,868

5.25% 12/15/11 (e)

11,850,000

14,492,550

20,584,418

TOTAL CONVERTIBLE BONDS

55,451,365

Nonconvertible Bonds - 0.1%

MATERIALS - 0.1%

Chemicals - 0.1%

Hercules, Inc. 6.5% 6/30/29 unit

15,700,000

12,743,690

TOTAL CORPORATE BONDS

(Cost $69,151,063)

68,195,055

Money Market Funds - 2.1%

Shares

Value (Note 1)

Fidelity Cash Central Fund, 5.11% (b)

49,268,505

$ 49,268,505

Fidelity Securities Lending Cash Central Fund, 5.14% (b)(c)

175,543,038

175,543,038

TOTAL MONEY MARKET FUNDS

(Cost $224,811,543)

224,811,543

TOTAL INVESTMENT
PORTFOLIO - 101.8%

(Cost $8,232,705,430)

10,879,325,708

NET OTHER ASSETS - (1.8)%

(189,512,616)

NET ASSETS - 100%

$ 10,689,813,092

Security Type Abbreviation

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 unaudited listing of the fund's holdings as of its most recent quarter end is available upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Security or a portion of the security is on loan 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 $38,726,025 or 0.4% of net assets.

(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 $13,895,125 or 0.1% of net assets.

Additional information on each holding is as follows:

Security

Acquisition Date

Acquisition Cost

KKR Private Equity Investors, L.P. Restricted Depositary Units

5/3/06

$ 15,612,500

Affiliated Central Funds

Information regarding fiscal year to date income earned by the fund from the affiliated Central funds is as follows:

Fund

Income earned

Fidelity Cash Central Fund

$ 413,865

Fidelity Securities Lending Cash Central Fund

1,063,479

Total

$ 1,477,344

Other Information

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

United States of America

89.1%

France

2.0%

United Kingdom

1.7%

Cayman Islands

1.5%

Netherlands Antilles

1.5%

Others (individually less than 1%)

4.2%

100.0%

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

VIP Equity-Income Portfolio

VIP Equity-Income Portfolio

Financial Statements

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)

Assets

Investment in securities, at value (including securities loaned of $174,191,840) - See accompanying schedule:

Unaffiliated issuers (cost $8,007,893,887)

$ 10,654,514,165

Affiliated Central Funds (cost $224,811,543)

224,811,543

Total Investments (cost $8,232,705,430)

$ 10,879,325,708

Cash

254,868

Foreign currency held at value
(cost $449,779)

449,878

Receivable for investments sold

64,314,375

Receivable for fund shares sold

3,637,215

Dividends receivable

14,172,693

Interest receivable

364,026

Prepaid expenses

21,632

Other receivables

273,402

Total assets

10,962,813,797

Liabilities

Payable for investments purchased

$ 85,935,380

Payable for fund shares redeemed

5,689,951

Accrued management fee

4,086,264

Distribution fees payable

474,139

Other affiliated payables

983,598

Other payables and accrued expenses

288,335

Collateral on securities loaned, at value

175,543,038

Total liabilities

273,000,705

Net Assets

$ 10,689,813,092

Net Assets consist of:

Paid in capital

$ 7,613,401,865

Undistributed net investment income

91,019,752

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

338,775,261

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

2,646,616,214

Net Assets

$ 10,689,813,092

Statement of Assets and Liabilities - continued

June 30, 2006 (Unaudited)

Initial Class:
Net Asset Value, offering price
and redemption price
per share ($7,643,976,176 ÷ 306,303,303 shares)

$ 24.96

Service Class:
Net Asset Value, offering price
and redemption price
per share ($1,055,819,533 ÷ 42,459,366 shares)

$ 24.87

Service Class 2:
Net Asset Value, offering price
and redemption price
per share ($1,891,981,006 ÷ 76,762,891 shares)

$ 24.65

Service Class 2R:
Net Asset Value, offering price
and redemption price
per share ($10,592,657 ÷ 431,654 shares)

$ 24.54

Investor Class:
Net Asset Value, offering price
and redemption price
per share ($87,443,720 ÷ 3,509,435 shares)

$ 24.92

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

Semiannual Report

VIP Equity-Income Portfolio
Financial Statements - continued

Statement of Operations

Six months ended June 30, 2006 (Unaudited)

Investment Income

Dividends

$ 121,002,787

Interest

1,764,495

Income from affiliated Central Funds (including $1,063,479 from security lending)

1,477,344

Total income

124,244,626

Expenses

Management fee

$ 25,337,022

Transfer agent fees

3,666,883

Distribution fees

2,849,221

Accounting and security lending fees

716,683

Independent trustees' compensation

20,876

Appreciation in deferred trustee compensation account

12,410

Custodian fees and expenses

129,522

Audit

61,999

Legal

68,946

Interest

58,940

Miscellaneous

268,106

Total expenses before reductions

33,190,608

Expense reductions

(194,725)

32,995,883

Net investment income (loss)

91,248,743

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

Unaffiliated issuers

362,304,464

Foreign currency transactions

7,684

Total net realized gain (loss)

362,312,148

Change in net unrealized appreciation (depreciation) on:

Investment securities

87,089,117

Assets and liabilities in foreign currencies

(952)

Total change in net unrealized appreciation (depreciation)

87,088,165

Net gain (loss)

449,400,313

Net increase (decrease) in net assets resulting from operations

$ 540,649,056

Statement of Changes in Net Assets

Six months ended
June 30, 2006
(Unaudited)

Year ended
December 31,
2005

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 91,248,743

$ 180,286,741

Net realized gain (loss)

362,312,148

551,406,495

Change in net unrealized appreciation (depreciation)

87,088,165

(133,326,683)

Net increase (decrease) in net assets resulting from operations

540,649,056

598,366,553

Distributions to shareholders from net investment income

(180,405,824)

(175,959,121)

Distributions to shareholders from net realized gain

(556,239,405)

(394,382,958)

Total distributions

(736,645,229)

(570,342,079)

Share transactions - net increase (decrease)

159,472,265

(588,913,583)

Redemption fees

662

2,560

Total increase (decrease) in net assets

(36,523,246)

(560,886,549)

Net Assets

Beginning of period

10,726,336,338

11,287,222,887

End of period (including undistributed net investment income of $91,019,752 and undistributed net investment income of $180,172,674, respectively)

$ 10,689,813,092

$ 10,726,336,338

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

VIP Equity-Income Portfolio

Financial Highlights - Initial Class

Six months ended
June 30, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002

2001

Net asset value, beginning of period

$ 25.49

$ 25.37

$ 23.18

$ 18.16

$ 22.75

$ 25.52

Income from Investment Operations

Net investment income (loss) E

.22

.42

.40

.36

.34

.34

Net realized and unrealized gain (loss)

1.04

1.00

2.24

5.01

(4.08)

(1.51)

Total from investment operations

1.26

1.42

2.64

5.37

(3.74)

(1.17)

Distributions from net investment income

(.45)

(.41)

(.36)

(.35)

(.36)

(.42)

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

(.49)

(1.18)

Total distributions

(1.79)

(1.30)

(.45)

(.35)

(.85)

(1.60)

Redemption fees added to paid in capital

- E, G

- E, G

- E, G

- E, G

- E, G

-

Net asset value, end of period

$ 24.96

$ 25.49

$ 25.37

$ 23.18

$ 18.16

$ 22.75

Total Return B, C, D

5.12%

5.87%

11.53%

30.33%

(16.95)%

(4.96)%

Ratios to Average Net Assets F

Expenses before reductions

.56% A

.56%

.58%

.57%

.57%

.58%

Expenses net of fee waivers, if any

.56% A

.56%

.58%

.57%

.57%

.58%

Expenses net of all reductions

.55% A

.55%

.57%

.56%

.56%

.57%

Net investment income (loss)

1.73% A

1.71%

1.71%

1.83%

1.70%

1.47%

Supplemental Data

Net assets, end of period (000 omitted)

$ 7,643,976

$ 7,875,801

$ 8,689,829

$ 8,402,963

$ 6,895,940

$ 9,256,205

Portfolio turnover rate

20% A

19%

22%

26%

25%

24%

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 fee 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, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002

2001

Net asset value, beginning of period

$ 25.39

$ 25.28

$ 23.11

$ 18.10

$ 22.67

$ 25.45

Income from Investment Operations

Net investment income (loss) E

.20

.39

.38

.34

.32

.31

Net realized and unrealized gain (loss)

1.04

1.00

2.22

5.00

(4.06)

(1.51)

Total from investment operations

1.24

1.39

2.60

5.34

(3.74)

(1.20)

Distributions from net investment income

(.42)

(.39)

(.34)

(.33)

(.34)

(.40)

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

(.49)

(1.18)

Total distributions

(1.76)

(1.28)

(.43)

(.33)

(.83)

(1.58)

Redemption fees added to paid in capital

- E, G

- E, G

- E, G

- E, G

- E, G

-

Net asset value, end of period

$ 24.87

$ 25.39

$ 25.28

$ 23.11

$ 18.10

$ 22.67

Total Return B, C, D

5.07%

5.76%

11.38%

30.22%

(17.00)%

(5.09)%

Ratios to Average Net Assets F

Expenses before reductions

.66% A

.66%

.68%

.67%

.67%

.68%

Expenses net of fee waivers, if any

.66% A

.66%

.68%

.67%

.67%

.68%

Expenses net of all reductions

.65% A

.65%

.67%

.66%

.66%

.67%

Net investment income (loss)

1.63% A

1.61%

1.61%

1.73%

1.60%

1.37%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,055,820

$ 1,079,838

$ 1,170,778

$ 1,071,483

$ 771,516

$ 836,017

Portfolio turnover rate

20% A

19%

22%

26%

25%

24%

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 fee 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, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002

2001

Net asset value, beginning of period

$ 25.17

$ 25.09

$ 22.96

$ 18.00

$ 22.59

$ 25.41

Income from Investment Operations

Net investment income (loss) E

.18

.35

.34

.31

.28

.27

Net realized and unrealized gain (loss)

1.03

.98

2.21

4.97

(4.04)

(1.50)

Total from investment operations

1.21

1.33

2.55

5.28

(3.76)

(1.23)

Distributions from net investment income

(.39)

(.36)

(.33)

(.32)

(.34)

(.41)

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

(.49)

(1.18)

Total distributions

(1.73)

(1.25)

(.42)

(.32)

(.83)

(1.59)

Redemption fees added to paid in capital

- E, G

- E, G

- E, G

- E, G

- E, G

-

Net asset value, end of period

$ 24.65

$ 25.17

$ 25.09

$ 22.96

$ 18.00

$ 22.59

Total Return B, C, D

5.00%

5.57%

11.23%

30.03%

(17.15)%

(5.23)%

Ratios to Average Net Assets F

Expenses before reductions

.81% A

.81%

.83%

.82%

.83%

.84%

Expenses net of fee waivers, if any

.81% A

.81%

.83%

.82%

.83%

.84%

Expenses net of all reductions

.80% A

.80%

.82%

.81%

.82%

.83%

Net investment income (loss)

1.48% A

1.46%

1.46%

1.58%

1.44%

1.21%

Supplemental Data

Net assets, end of period (000 omitted)

$ 1,891,981

$ 1,723,546

$ 1,420,999

$ 916,679

$ 403,632

$ 226,078

Portfolio turnover rate

20% A

19%

22%

26%

25%

24%

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 fee 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 2R

Six months ended
June 30, 2006

Years ended December 31,

Selected Per-Share Data

(Unaudited)

2005

2004

2003

2002 F

Net asset value, beginning of period

$ 25.08

$ 25.01

$ 22.91

$ 17.99

$ 21.82

Income from Investment Operations

Net investment income (loss) E

.18

.35

.34

.31

.18

Net realized and unrealized gain (loss)

1.02

.99

2.20

4.96

(4.01)

Total from investment operations

1.20

1.34

2.54

5.27

(3.83)

Distributions from net investment income

(.40)

(.38)

(.35)

(.35)

-

Distributions from net realized gain

(1.34)

(.89)

(.09)

-

-

Total distributions

(1.74)

(1.27)

(.44)

(.35)

-

Redemption fees added to paid in capital E, H

-

-

-

-

-

Net asset value, end of period

$ 24.54

$ 25.08

$ 25.01

$ 22.91

$ 17.99

Total Return B, C, D

4.99%

5.61%

11.22%

30.05%

(17.55)%

Ratios to Average Net Assets G

Expenses before reductions

.81% A

.81%

.83%

.82%

.85% A

Expenses net of fee waivers, if any

.81% A

.81%

.83%

.82%

.85% A

Expenses net of all reductions

.80% A

.80%

.82%

.81%

.84% A

Net investment income (loss)

1.48% A

1.46%

1.46%

1.57%

1.45% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 10,593

$ 9,651

$ 5,617

$ 1,891

$ 471

Portfolio turnover rate

20% A

19%

22%

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 fee 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.

VIP Equity-Income Portfolio

Financial Highlights - Investor Class

Six months ended
June 30, 2006

Year ended December 31,

Selected Per-Share Data

(Unaudited)

2005 F

Net asset value, beginning of period

$ 25.48

$ 24.46

Income from Investment Operations

Net investment income (loss) E

.20

.17

Net realized and unrealized gain (loss)

1.04

.85

Total from investment operations

1.24

1.02

Distributions from net investment income

(.46)

-

Distributions from net realized gain

(1.34)

-

Total distributions

(1.80)

-

Redemption fees added to paid in capital E, H

-

-

Net asset value, end of period

$ 24.92

$ 25.48

Total Return B, C, D

5.05%

4.17%

Ratios to Average Net Assets G

Expenses before reductions

.69% A

.74% A

Expenses net of fee waivers, if any

.69% A

.74% A

Expenses net of all reductions

.68% A

.73% A

Net investment income (loss)

1.60% A

1.54% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 87,444

$ 37,500

Portfolio turnover rate

20% A

19%

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 July 21, 2005 (commencement of sale of shares) to December 31, 2005. 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 fee 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, 2006 (Unaudited)

1. Significant Accounting Policies.

VIP Equity-Income Portfolio (the Fund) is a fund of Variable Insurance Products Fund, (the trust) (referred to in this report as VIP 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, Service Class 2R shares, and Investor Class 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 transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The Fund may invest in affiliated money market central funds (Money Market Central Funds), which are open-end investment companies available to investment companies and other accounts managed by FMR and its affiliates.

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. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.

When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used can not be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.

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 and may include proceeds received from litigation. 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 return of capital distributions or capital gain distributions. 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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

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

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Prior to July 1, 2006, deferred amounts were treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and were marked-to-market. Effective July 1, 2006, deferred amounts will be directly invested in a cross-section of Fidelity funds. Deferred amounts remain in the Fund until distributed in accordance with the Plan.

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), market discount, deferred trustees compensation, 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

$ 3,111,279,174

Unrealized depreciation

(474,927,088)

Net unrealized appreciation (depreciation)

$ 2,636,352,086

Cost for federal income tax purposes

$ 8,242,973,622

New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets and results of operations.

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 which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

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.

Purchases and sales of securities, other than short-term securities, aggregated $1,056,452,346 and $1,527,484,468, respectively.

VIP Equity-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 .20% of the Fund's average net assets and a group fee rate that averaged .27% 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 .47% 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.

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

$ 541,167

Service Class 2

2,295,018

Service Class 2R

13,036

$ 2,849,221

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 class. Each class with the exception of Investor Class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. Investor Class pays a monthly asset-based transfer agent fee of .18% of its month end net assets. The total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Initial Class

$ 2,619,352

Service Class

358,646

Service Class 2

622,319

Service Class 2R

3,474

Investor Class

63,092

$ 3,666,883

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.

Affiliated Central Funds. The Fund may invest in Money Market Central Funds which seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.

The Money Market Central Funds do not pay a management fee.

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 were $4,476 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 affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Daily
Loan Balance

Weighted Average
Interest Rate

Interest
Expense

Borrower

$ 9,834,902

4.77%

$ 53,408

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 Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $16,111 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

6. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, 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. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from affiliated central funds.

7. 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. The average daily loan balance during the period for which loans were outstanding amounted to $6,306,333. The weighted average interest rate was 5.27%. At period end, there were no bank borrowings outstanding.

8. 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 $193,508 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 $1,217.

9. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

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.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
June 30, 2006

Year ended
December 31, 2005 A

From net investment income

Initial Class

$ 134,846,596

$ 137,602,640

Service Class

17,470,661

17,563,270

Service Class 2

27,087,115

20,698,826

Service Class 2R

157,721

94,385

Investor Class

843,731

-

Total

$ 180,405,824

$ 175,959,121

From net realized gain

Initial Class

$ 405,144,480

$ 302,386,049

Service Class

55,739,729

40,600,805

Service Class 2

92,358,102

51,172,097

Service Class 2R

523,133

224,007

Investor Class

2,473,961

-

Total

$ 556,239,405

$ 394,382,958

A Distributions for Investor Class are for the period July 21, 2005 (commencement of sale of shares) to December 31, 2005.

VIP Equity-Income Portfolio

11. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended
June 30,
2006

Year ended
December 31,
2005 A

Six months ended
June 30,
2006

Year ended
December 31,
2005 A

Initial Class

Shares sold

3,839,226

9,995,592

$ 96,843,423

$ 243,588,116

Reinvestment of distributions

22,240,160

18,234,094

539,991,076

439,988,689

Shares redeemed

(28,768,916)

(61,778,854)

(726,539,912)

(1,504,207,375)

Net increase (decrease)

(2,689,530)

(33,549,168)

$ (89,705,413)

$ (820,630,570)

Service Class

Shares sold

971,404

1,664,065

$ 24,253,794

$ 40,334,290

Reinvestment of distributions

3,023,973

2,417,459

73,210,390

58,164,074

Shares redeemed

(4,066,015)

(7,864,758)

(102,209,268)

(190,937,287)

Net increase (decrease)

(70,638)

(3,783,234)

$ (4,745,084)

$ (92,438,923)

Service Class 2

Shares sold

7,622,309

15,407,445

$ 189,522,765

$ 370,175,387

Reinvestment of distributions

4,974,811

3,009,670

119,445,217

71,870,922

Shares redeemed

(4,302,833)

(6,593,873)

(107,259,782)

(158,371,244)

Net increase (decrease)

8,294,287

11,823,242

$ 201,708,200

$ 283,675,065

Service Class 2R

Shares sold

102,796

229,939

$ 2,550,417

$ 5,501,232

Reinvestment of distributions

28,488

13,378

680,853

318,391

Shares redeemed

(84,414)

(83,085)

(2,095,562)

(1,983,529)

Net increase (decrease)

46,870

160,232

$ 1,135,708

$ 3,836,094

Investor Class

Shares sold

2,051,820

1,480,945

$ 51,613,559

$ 36,874,007

Reinvestment of distributions

136,756

-

3,317,692

-

Shares redeemed

(150,995)

(9,091)

(3,852,397)

(229,256)

Net increase (decrease)

2,037,581

1,471,854

$ 51,078,854

$ 36,644,751

A Share transactions for Investor Class are for the period July 21, 2005 (commencement of sale of shares) to December 31, 2005.

Semiannual Report

Board Approval of Investment Advisory Contracts and Management Fees

VIP Equity-Income Portfolio

On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub-advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non-discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees' counsel, considered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.

The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund's management contract or sub-advisory agreements; (ii) the investment process or strategies employed in the management of the fund's assets; (iii) the nature or level of services provided under the fund's management contract or sub-advisory agreements; (iv) the day-to-day management of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund's management contract or sub-advisory agreements under the Investment Company Act of 1940.

Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund's portfolio manager would not change, it did not consider the fund's investment performance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.

In connection with its future renewal of the fund's management contract and sub-advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund's management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.

Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund's Agreement is fair and reasonable, and that the fund's Agreement should be approved.

Semiannual Report

Semiannual Report

VIP Equity-Income Portfolio

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Adviser

FMR Co., Inc.

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

Fidelity Research & Analysis Company
(formerly 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 Service Agents

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Fidelity Service Company, Inc.
Boston, MA

Custodian

The Northern Trust Company
Chicago, IL

VIPEI2R-SANN-0806
1.833447.100

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. Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. 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: Equity-Income Portfolio's Board of Trustees.

Item 11. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Variable Insurance Products Fund: Equity-Income Portfolio's (the "Fund") 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 Fund 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 Fund's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting.

Item 12. 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, 2006

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, 2006

By:

/s/Joseph B. Hollis

Joseph B. Hollis

Chief Financial Officer

Date:

August 17, 2006