N-CSR 1 a15-2773_1ncsr.htm N-CSR

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			811-05624

Morgan Stanley Institutional Fund, Inc.
(Exact name of registrant as specified in charter)

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

John H. Gernon 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)

Registrant’s telephone number, including area code:				212-296-0289

Date of fiscal year end:	December 31,

Date of reporting period:		December 31, 2014

Item 1 - Report to Shareholder

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Active International Allocation Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					15
Statement of Operations					17
Statements of Changes in Net Assets					18
Financial Highlights					20
Notes to Financial Statements					23
Report of Independent Registered Public Accounting Firm					33
Federal Tax Notice					34
U.S. Privacy Policy					35
Director and Officer Information					38

This report is authorized for distribution only when preceded or accompanied by prospectuses of the Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information (SAI), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations, and describes in detail each of the Portfolio's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access portfolio information including performance, characteristics, and investment team commentary through Morgan Stanley Investment Management's website: www.morganstanley.com/im.

Market forecasts provided in this report may not necessarily come to pass. There is no guarantee that any sectors mentioned will continue to perform as discussed herein or that securities in such sectors will be held by the Portfolio in the future. There is no assurance that a Portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that market values of securities owned by the Portfolio will decline and, therefore, the value of the Portfolio's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Portfolio. Please see the prospectus for more complete information on investment risks.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Active International Allocation Portfolio (the "Portfolio") performed during the latest twelve-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Active International Allocation Portfolio

As a shareholder of the Portfolio, you incur two types of costs: (1) transactional costs, including redemptions fees; and (2) ongoing costs, including advisory fees, administration fees, distribution and shareholder services fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's 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 Portfolio 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.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in 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 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Active International Allocation Portfolio Class I	$	1,000.00	$	906.60	$	1,020.77	$	4.23	$	4.48		0.88	%
Active International Allocation Portfolio Class A		1,000.00		904.60		1,019.00		5.90		6.26		1.23
Active International Allocation Portfolio Class L		1,000.00		901.90		1,016.48		8.29		8.79		1.73

* Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 184/365 (to reflect the most recent one-half year period).

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Active International Allocation Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily, in accordance with country and sector weightings determined by the Adviser, Morgan Stanley Investment Management Inc., in equity securities of non-U.S. issuers which, in the aggregate, replicate broad market indices.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -6.37%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI EAFE Index (the "Index"), which returned -4.90%.

Factors Affecting Performance

• For 2014, returns in local currency terms were decent across all regions (U.S. +13%, Japan +9%, Europe +5%, and even emerging markets +5%).⁽ⁱ⁾ However, broad currency weakness versus the U.S. dollar brought the Index return in U.S. dollars down to -5% and MSCI Emerging Markets Index to -2%. Sector performance (in U.S. dollars) within the Index was led by the defensive growth/growth sectors of health care, +18%, and technology, +16%. Cyclicals were pulled down by global growth concerns, with materials losing -7% and energy down -13%.

• While global markets finished 2014 in positive territory, a key determinant of regional returns was the U.S. dollar appreciation against the euro, sterling and yen. U.S. dollar strength detracted from international equity returns for U.S. investors, but gave euro and yen investors big boosts to any money they had invested in U.S. assets. While 2014 began with expectations of economic acceleration and rising interest rates, by mid-year sentiment changed as the Russia/Ukraine crisis dragged on, the eurozone credit cycle failed to materialize (even Germany slowed), "Abenomics" seemed to lose its vigor and Chinese economic growth inexorably slowed.

• For the full year, the Portfolio fell -6.37%, lagging the Index loss of -4.90%. The bulk of Portfolio underperformance was in the first half of the year, primarily the result of an overweight to Europe. In

the second half of 2014, we were able to regain some ground via our sustained overweights to health care and technology, tactical shifts into China and an underweight in Europe. The impact of our allocation to Japan was positive for the 12-month period. An underweight to the energy sector was another positive contributor.

• The main detractors from relative performance included underweight allocations to Australia and Singapore and an underweight allocation to utilities (which soared, as investors perceive them as yield proxies).

• The Portfolio utilizes stock index futures as an additional vehicle to implement macro investment decisions. For 2014, macro investment decisions implemented with the use of stock index futures resulted in a realized loss for the Portfolio.

Management Strategies

• We begin the new year slightly overweight European equities due to expectations of quantitative easing (QE) and perhaps some surprise support from lower oil prices. We are slightly overweight Japan due to the Bank of Japan's aggressive asset buying and ongoing hope for improving equity governance. We like China for now, due to its potential to partially manage its slowdown via rate cuts (better than many of its low interest rate peers).

• As we enter 2015, we believe that equity market volatility will rise. Perhaps it was inevitable — as soon as the U.S. Federal Reserve moved closer to raising rates — the rise in the U.S. dollar was bound to put pressure on global growth and risk assets. That said, we are in the camp that believes the transition should be manageable, the fall in oil price is a net global positive, and 2015 could see higher equities.

⁽ⁱ⁾ Source for index data: MSCI. Country and regional returns are represented by their respective MSCI indexes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Active International Allocation Portfolio

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes.

Performance Compared to the MSCI EAFE Index⁽¹⁾ and the Lipper International Large-Cap Core Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁷⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–6.37	%		4.41	%		4.68	%		5.96	%
MSCI EAFE Index		–4.90			5.33			4.43			5.61
Lipper International Large-Cap Core Funds Index		–4.78			5.12			4.18			6.56
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		–6.70			4.12			4.40			5.18
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–11.61			3.00			3.84			4.88
MSCI EAFE Index		–4.90			5.33			4.43			4.71
Lipper International Large-Cap Core Funds Index		–4.78			5.12			4.18			5.62
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		–7.17			—			—			11.75
MSCI EAFE Index		–4.90			—			—			13.89
Lipper International Large-Cap Core Funds Index		–4.78			—			—			13.23

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Performance assumes that all dividends and distributions, if any, were reinvested. For the most recent month-end performance figures, please visit www.morganstanley.com/im. Investment return and principal value will fluctuate so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Total returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Performance of share classes will vary due to difference in expenses.

⁽¹⁾ MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the international equity market performance of developed markets, excluding the United States & Canada. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI EAFE Index currently consists of 21 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper International Large-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Large-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio was in the Lipper International Large-Cap Core Funds classification.

⁽³⁾ Total returns for the Portfolio reflect fees waived and expenses reimbursed, if applicable, by the Adviser. Without such waivers and reimbursements, total returns would have been lower. The fee waivers and/or expense reimbursements will continue for at least one year or until such time as the Fund's Board of Directors acts to discontinue all or a portion of such waivers and/or expense reimbursements when it deems that such action is appropriate.

⁽⁴⁾ Commenced operations on January 17, 1992.

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on June 14, 2012.

⁽⁷⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date or initial offering of the respective share class of the Portfolio, not the inception of the Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Active International Allocation Portfolio

	Shares		Value (000)
Common Stocks (89.8%)
Australia (4.5%)
AGL Energy Ltd.		9,167	$	100
ALS Ltd. (a)		5,371		23
Amcor Ltd.		24,107		265
AMP Ltd.		49,377		220
APA Group		12,465		76
Asciano Ltd.		15,757		77
Aurizon Holding Ltd.		27,415		103
Australia & New Zealand Banking Group Ltd.		48,922		1,273
BHP Billiton Ltd.		47,104		1,118
Brambles Ltd.		25,532		220
Coca-Cola Amatil Ltd.		13,096		99
Cochlear Ltd. (a)		917		58
Commonwealth Bank of Australia		24,518		1,703
Crown Resorts Ltd.		6,574		68
CSL Ltd.		8,270		582
Fortescue Metals Group Ltd. (a)		10,755		24
Goodman Group REIT (a)		30,768		142
Harvey Norman Holdings Ltd. (a)		12,081		33
Iluka Resources Ltd. (a)		8,868		43
Incitec Pivot Ltd.		31,700		82
Insurance Australia Group Ltd.		35,705		181
Leighton Holdings Ltd.		2,222		40
Lend Lease Group REIT		5,792		77
Macquarie Group Ltd.		4,661		220
National Australia Bank Ltd.		37,502		1,022
Orica Ltd. (a)		7,038		108
Origin Energy Ltd.		17,938		169
QBE Insurance Group Ltd.		16,798		152
Rio Tinto Ltd.		6,396		300
Santos Ltd.		15,468		105
Scentre Group REIT (b)		115,695		329
Sonic Healthcare Ltd.		7,300		110
Stockland REIT (a)		92,334		308
Suncorp Group Ltd.		19,864		226
Sydney Airport		4,934		19
TABCORP Holdings Ltd.		11,517		39
Tatts Group Ltd.		22,177		62
Telstra Corp., Ltd.		65,695		319
Toll Holdings Ltd.		11,026		52
Transurban Group		21,363		149
Wesfarmers Ltd.		20,277		686
Westfield Corp. REIT		41,275		302
Westpac Banking Corp.		44,527		1,197
Woodside Petroleum Ltd.		10,296		320
Woolworths Ltd. (a)		25,257		629
WorleyParsons Ltd.		3,609		30
				13,460
Belgium (1.3%)
Ageas		1,932		68
Anheuser-Busch InBev N.V.		17,046		1,918

	Shares		Value (000)
Anheuser-Busch InBev N.V. VVPR (b)(c)		20,526	$	—	@
Belgacom SA (a)		428		15
Groupe Bruxelles Lambert SA		5,717		487
KBC Groep N.V. (b)		9,618		534
Solvay SA, Class A		1,363		184
Telenet Group Holding N.V. (b)		1,702		96
UCB SA		3,566		271
Umicore SA		6,321		255
				3,828
Brazil (0.0%)
Cia Energetica de Minas Gerais (Preference)		1		—	@
China (2.1%)
Agricultural Bank of China Ltd. H Shares (d)		143,000		72
Anhui Conch Cement Co., Ltd. H Shares (a)(d)		32,000		119
Bank of China Ltd. H Shares (d)		506,000		283
Bank of Communications Co., Ltd. H Shares (d)		59,000		55
Beijing Enterprises Holdings Ltd. (d)		11,500		90
Belle International Holdings Ltd. (a)(d)		34,000		38
Brilliance China Automotive Holdings Ltd. (d)		22,000		35
Byd Co., Ltd. H Shares (a)(d)		5,500		21
China Citic Bank Corp., Ltd. H Shares (d)		56,000		45
China Communications Construction Co., Ltd. H Shares (d)		18,000		22
China Construction Bank Corp. H Shares (d)		464,000		378
China Life Insurance Co., Ltd. H Shares (d)		47,000		184
China Longyuan Power Group Corp. H Shares (d)		16,000		16
China Mengniu Dairy Co., Ltd. (d)		10,000		41
China Merchants Bank Co., Ltd. H Shares (d)		36,500		91
China Minsheng Banking Corp., Ltd. H Shares (d)		51,000		67
China Mobile Ltd. (d)		61,500		722
China National Building Material Co., Ltd. H Shares (a)(d)		90,000		87
China Oilfield Services Ltd. H Shares (d)		12,000		21
China Overseas Land & Investment Ltd. (d)		28,000		83
China Pacific Insurance Group Co., Ltd. H Shares (d)		18,000		90
China Petroleum & Chemical Corp. H Shares (d)		252,000		204
China Railway Construction Corp., Ltd. H Shares (d)		71,000		90
China Resources Land Ltd. (d)		16,000		42
China Resources Power Holdings Co., Ltd. (d)		6,000		15
China Shenhua Energy Co., Ltd. H Shares (d)		20,500		60
China Telecom Corp., Ltd. H Shares (d)		300,000		176
China Unicom Hong Kong Ltd. H Shares (d)		92,000		123
China Vanke Co., Ltd. H Shares (a)(b)(d)		10,800		24
Citic Ltd. (a)(d)		19,000		32
CITIC Securities Co., Ltd. H Shares (a)(d)		35,000		131
CNOOC Ltd. (d)		61,000		83
CSR Corp., Ltd. H Shares (a)(d)		74,000		100
Dongfeng Motor Group Co., Ltd. H Shares (d)		14,000		20
ENN Energy Holdings Ltd. (d)		6,000		34
Great Wall Motor Co., Ltd. H Shares (d)		7,500		42
Haitong Securities Co., Ltd. H Shares (a)(d)		54,800		137

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
China (cont'd)
Hengan International Group Co., Ltd. (d)		5,000	$	52
Huaneng Power International, Inc. H Shares (d)		20,000		27
Hutchison Port Holdings Trust (Units) (e)		140,000		96
Industrial & Commercial Bank of China Ltd. H Shares (d)		482,000		350
Jiangxi Copper Co., Ltd. H Shares (a)(d)		11,000		19
Kunlun Energy Co., Ltd. (d)		16,000		15
Lenovo Group Ltd. (a)(d)		48,000		63
PetroChina Co., Ltd. H Shares (d)		282,000		314
PICC Property & Casualty Co., Ltd. H Shares (d)		24,000		46
Ping An Insurance Group Co of China Ltd. H Shares (d)		16,500		167
Shimao Property Holdings Ltd. (d)		7,500		17
Sihuan Pharmaceutical Holdings Group Ltd. (d)		21,000		14
Sinopharm Group Co., Ltd. H Shares (a)(d)		18,400		65
Tencent Holdings Ltd. (d)		55,500		796
Tingyi Cayman Islands Holding Corp. (d)		14,000		32
Want Want China Holdings Ltd. (a)(d)		38,000		50
Wynn Macau Ltd. (a)(d)		4,800		13
Yangzijiang Shipbuilding Holdings Ltd.		47,000		43
Zhuzhou CSR Times Electric Co., Ltd. H Shares (d)		19,000		111
				6,163
Denmark (1.0%)
AP Moeller - Maersk A/S Series B		103		205
DSV A/S		3,040		92
Novo Nordisk A/S		57,055		2,414
Novozymes A/S Series B		7,032		295
TDC A/S		16,588		127
				3,133
Finland (1.1%)
Elisa Oyj		4,656		127
Kone Oyj, Class B (a)		8,071		367
Metso Oyj		2,666		79
Neste Oil Oyj		4,179		101
Nokia Oyj (a)		155,912		1,227
Orion Oyj, Class B		2,798		87
Sampo Oyj, Class A		12,968		608
Stora Enso Oyj, Class R		26,594		237
UPM-Kymmene Oyj		22,910		376
Wartsila Oyj		4,960		223
				3,432
France (8.3%)
Accor SA		3,240		145
Air Liquide SA		4,827		596
Airbus Group N.V.		11,263		559
Alcatel-Lucent (a)(b)		107,400		381
Alstom SA (b)		6,078		196
AtoS		3,245		257
AXA SA		44,074		1,018
BNP Paribas SA		23,126		1,359

	Shares		Value (000)
Bouygues SA		8,037	$	290
Cap Gemini SA		5,480		390
Carrefour SA		15,805		480
Casino Guichard Perrachon SA		1,873		172
Christian Dior SA		1,029		176
Cie de Saint-Gobain		12,284		517
Cie Generale des Etablissements Michelin Series B		4,162		377
CNP Assurances		3,647		65
Credit Agricole SA		17,022		219
Danone SA		12,037		792
Dassault Systemes		5,287		322
Edenred		4,583		127
Electricite de France SA		15,862		436
Essilor International SA		3,775		420
Eurazeo SA		758		53
Fonciere Des Regions REIT		497		46
GDF Suez		87,803		2,051
Gecina SA REIT		399		50
Hermes International (a)		258		92
ICADE REIT		415		33
Iliad SA		1,207		290
Imerys SA		549		40
Kering		1,288		248
Klepierre REIT		1,710		74
L'Oreal SA		911		153
Lafarge SA		4,640		326
Lagardere SCA		3,081		80
Legrand SA		6,914		362
LVMH Moet Hennessy Louis Vuitton SA		4,187		662
Natixis SA		19,524		128
Orange SA		17,537		298
Pernod Ricard SA		4,767		529
Publicis Groupe SA		4,922		353
Remy Cointreau SA (a)		549		37
Renault SA		4,317		315
Safran SA		6,840		421
Sanofi		27,707		2,525
Schneider Electric SE		10,998		799
SCOR SE		2,802		85
Societe BIC SA		771		102
Societe Generale SA		15,347		645
Sodexo SA		1,604		157
STMicroelectronics N.V.		26,239		196
Suez Environnement Co.		18,388		319
Technip SA		2,429		145
Total SA		36,199		1,866
Unibail-Rodamco SE REIT		1,725		441
Veolia Environnement SA		23,669		420
Vinci SA		16,097		881
Vivendi SA (b)		11,060		276
				24,792

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Germany (8.4%)
Adidas AG		3,875	$	270
Allianz SE (Registered)		8,615		1,431
Axel Springer SE		860		52
BASF SE		17,560		1,484
Bayer AG (Registered)		18,551		2,536
Bayerische Motoren Werke AG		8,630		937
Beiersdorf AG		1,540		126
Brenntag AG		3,138		177
Commerzbank AG (b)		25,716		342
Continental AG		2,723		578
Daimler AG (Registered)		22,012		1,836
Deutsche Bank AG (Registered)		25,627		775
Deutsche Boerse AG		1,639		117
Deutsche Lufthansa AG (Registered)		2,539		42
Deutsche Post AG (Registered)		15,193		497
Deutsche Telekom AG (Registered)		102,616		1,645
E.ON SE		88,081		1,513
Fraport AG Frankfurt Airport Services Worldwide		446		26
Fresenius Medical Care AG & Co., KGaA		5,803		434
GEA Group AG		4,336		192
Henkel AG & Co., KGaA (Preference)		2,716		294
Hugo Boss AG		639		78
Infineon Technologies AG		43,245		464
Lanxess AG		1,502		70
Linde AG		2,310		431
Merck KGaA		3,043		289
Metro AG (b)		10,584		324
Muenchener Rueckversicherungs AG (Registered)		5,024		1,006
Osram Licht AG (b)		1,432		56
Porsche Automobil Holding SE (Preference)		4,514		367
ProSiebenSat.1 Media AG (Registered)		8,997		379
QIAGEN N.V. (b)		11,148		261
RWE AG		23,600		739
SAP SE		31,742		2,244
Siemens AG (Registered)		16,525		1,874
Telefonica Deutschland Holding AG (b)		7,901		42
ThyssenKrupp AG (b)		5,553		143
United Internet AG (Registered)		5,216		237
Volkswagen AG		3,105		677
Volkswagen AG (Preference)		1,410		315
				25,300
Hong Kong (1.0%)
AIA Group Ltd.		38,200		210
Bank of East Asia Ltd.		4,739		19
Beijing Enterprises Water Group Ltd. (b)		98,000		66
BOC Hong Kong Holdings Ltd. (a)		12,500		42
Cheung Kong Holdings Ltd.		25,000		417
Cheung Kong Infrastructure Holdings Ltd.		4,000		30
CLP Holdings Ltd.		6,000		52
First Pacific Co., Ltd.		8,000		8
Global Brands Group Holding Ltd. (b)		16,000		3

	Shares		Value (000)
Hang Lung Properties Ltd.		42,000	$	117
Hang Seng Bank Ltd.		2,900		48
Henderson Land Development Co., Ltd. (a)		21,085		146
Hong Kong & China Gas Co., Ltd.		23,700		54
Hong Kong Exchanges and Clearing Ltd.		4,068		90
Hutchison Whampoa Ltd.		8,000		92
Hysan Development Co., Ltd.		12,000		53
Link REIT (The)		39,500		247
MGM China Holdings Ltd.		3,200		8
MTR Corp., Ltd. (a)		7,171		29
New World Development Co., Ltd.		98,165		112
Power Assets Holdings Ltd.		4,000		39
Sands China Ltd.		8,400		41
Sino Land Co., Ltd.		58,596		94
SJM Holdings Ltd.		4,000		6
Sun Hung Kai Properties Ltd.		29,878		452
Swire Pacific Ltd., Class A		12,500		162
Swire Properties Ltd.		22,400		66
Wharf Holdings Ltd. (a)		29,000		208
Wheelock & Co., Ltd.		17,000		79
				2,990
Indonesia (0.0%)
Golden Agri-Resources Ltd. (a)		183,315		64
Ireland (0.5%)
Bank of Ireland (b)		1,250,128		466
CRH PLC		27,965		673
Kerry Group PLC, Class A		3,556		245
Ryanair Holdings PLC ADR (b)		200		14
				1,398
Italy (0.5%)
Assicurazioni Generali SpA		41,836		855
Banco Popolare SC (b)		86		1
Intesa Sanpaolo SpA		2,905		9
Luxottica Group SpA		5,931		325
Telecom Italia SpA		286,465		239
UniCredit SpA		1,016		6
Unione di Banche Italiane SCPA		15,203		108
				1,543
Japan (23.5%)
Aeon Co., Ltd. (a)		21,100		212
Aeon Mall Co., Ltd.		2,300		41
Ajinomoto Co., Inc.		21,000		389
Amada Co., Ltd.		6,400		55
ANA Holdings, Inc.		42,000		103
Asahi Glass Co., Ltd. (a)		27,300		133
Asahi Group Holdings Ltd.		12,300		380
Asahi Kasei Corp.		39,000		357
Asics Corp.		2,100		50
Astellas Pharma, Inc.		77,700		1,081
Bank of Yokohama Ltd. (The)		71,000		385
Benesse Holdings, Inc.		2,054		61
Bridgestone Corp.		20,400		709

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Japan (cont'd)
Brother Industries Ltd.		6,200	$	113
Canon, Inc.		21,104		670
Casio Computer Co., Ltd. (a)		2,200		34
Central Japan Railway Co.		4,692		704
Chiba Bank Ltd. (The)		19,000		125
Chubu Electric Power Co., Inc. (b)		16,500		194
Chugai Pharmaceutical Co., Ltd.		7,100		175
Chugoku Bank Ltd. (The)		3,800		52
Citizen Holdings Co., Ltd.		10,300		79
Credit Saison Co., Ltd.		5,900		110
Dai Nippon Printing Co., Ltd.		12,100		109
Dai-ichi Life Insurance Co., Ltd. (The)		8,400		127
Daiichi Sankyo Co., Ltd.		23,500		329
Daikin Industries Ltd. (a)		6,100		393
Daito Trust Construction Co., Ltd.		2,856		323
Daiwa House Industry Co., Ltd.		16,600		314
Daiwa Securities Group, Inc.		80,000		623
Denso Corp.		21,350		995
Dentsu, Inc.		2,000		84
Don Quijote Holdings Co., Ltd.		900		61
East Japan Railway Co.		12,000		899
Eisai Co., Ltd.		8,200		318
FANUC Corp.		9,050		1,494
Fast Retailing Co., Ltd. (a)		1,700		619
Fuji Heavy Industries Ltd.		8,200		289
FUJIFILM Holdings Corp.		18,500		558
Fujitsu Ltd.		67,200		358
Fukuoka Financial Group, Inc.		28,000		145
Hachijuni Bank Ltd. (The)		9,000		58
Hakuhodo DY Holdings, Inc. (a)		5,700		55
Hamamatsu Photonics KK		1,600		76
Hankyu Hanshin Holdings, Inc.		21,000		113
Hirose Electric Co., Ltd.		900		105
Hisamitsu Pharmaceutical Co., Inc.		1,500		47
Hitachi Ltd.		123,000		900
Hitachi Metals Ltd.		3,000		51
Honda Motor Co., Ltd.		45,413		1,321
Hoya Corp.		16,400		549
IHI Corp.		61,530		312
Inpex Corp.		17,000		189
Isetan Mitsukoshi Holdings Ltd.		5,400		66
Isuzu Motors Ltd.		9,600		117
Ito En Ltd. (a)		3,800		68
ITOCHU Corp.		46,651		499
Japan Airlines Co., Ltd.		3,400		99
Japan Exchange Group, Inc.		2,700		63
Japan Real Estate Investment Corp. REIT		23		111
Japan Retail Fund Investment Corp. REIT		40		84
Japan Tobacco, Inc.		28,100		772
JFE Holdings, Inc.		21,500		479
JGC Corp.		9,546		197
Joyo Bank Ltd. (The) (a)		60,000		298

	Shares		Value (000)
JSR Corp.		3,608	$	62
JX Holdings, Inc.		115,246		449
Kajima Corp. (a)		22,000		91
Kakaku.com, Inc. (a)		4,100		59
Kansai Electric Power Co., Inc. (The) (a)(b)		23,600		225
Kansai Paint Co., Ltd.		3,000		46
Kao Corp.		16,100		635
Kawasaki Heavy Industries Ltd. (a)		69,500		317
KDDI Corp.		4,200		263
Keikyu Corp.		10,000		74
Keio Corp.		8,000		57
Keyence Corp.		2,057		911
Kinden Corp.		7,000		71
Kintetsu Corp.		40,750		134
Kirin Holdings Co., Ltd.		26,200		325
Kobe Steel Ltd.		30,000		52
Komatsu Ltd.		34,400		763
Konica Minolta, Inc.		17,730		191
Kose Corp.		2,000		78
Kubota Corp.		37,000		537
Kuraray Co., Ltd.		13,956		159
Kurita Water Industries Ltd.		4,400		92
Kyocera Corp.		12,900		591
Kyowa Exeo Corp.		4,500		48
Kyowa Hakko Kirin Co., Ltd.		7,000		66
Kyushu Electric Power Co., Inc. (a)(b)		10,600		106
Lawson, Inc. (a)		3,200		194
LIXIL Group Corp.		7,962		168
Mabuchi Motor Co., Ltd.		1,800		71
Makita Corp.		1,300		59
Marubeni Corp.		54,250		325
Maruichi Steel Tube Ltd. (a)		600		13
Mazda Motor Corp.		8,100		194
MEIJI Holdings Co., Ltd. (a)		700		64
Minebea Co., Ltd.		3,000		44
Miraca Holdings, Inc.		1,800		78
Mitsubishi Chemical Holdings Corp. (a)		45,400		221
Mitsubishi Corp.		44,400		814
Mitsubishi Electric Corp.		54,352		647
Mitsubishi Estate Co., Ltd.		37,000		783
Mitsubishi Heavy Industries Ltd.		117,550		650
Mitsubishi Materials Corp. (a)		63,000		209
Mitsubishi Motors Corp.		7,900		72
Mitsubishi Tanabe Pharma Corp.		5,700		84
Mitsubishi UFJ Financial Group, Inc. (See Note G)		153,106		839
Mitsui & Co., Ltd.		50,500		675
Mitsui Chemicals, Inc.		30,000		85
Mitsui Fudosan Co., Ltd.		27,900		750
Mitsui OSK Lines Ltd.		33,000		98
Mizuho Financial Group, Inc.		723,100		1,215
MS&AD Insurance Group Holdings, Inc.		14,760		351
Murata Manufacturing Co., Ltd.		8,500		929
Nabtesco Corp.		1,800		43

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Japan (cont'd)
Namco Bandai Holdings, Inc.		5,500	$	117
NEC Corp.		65,900		192
NGK Insulators Ltd.		9,660		199
NGK Spark Plug Co., Ltd.		8,959		271
NH Foods Ltd.		2,000		44
Nidec Corp.		6,800		441
Nikon Corp.		16,600		220
Nintendo Co., Ltd. (a)		2,408		251
Nippon Building Fund, Inc. REIT		28		140
Nippon Express Co., Ltd.		23,300		119
Nippon Paint Holdings Co., Ltd. (a)		2,000		58
Nippon Steel Sumitomo Metal Corp.		298,108		740
Nippon Telegraph & Telephone Corp.		13,300		684
Nippon Television Holdings, Inc.		3,700		54
Nippon Yusen KK		62,015		175
Nissan Motor Co., Ltd. (a)		82,905		722
Nitori Holdings Co., Ltd.		800		43
Nitto Denko Corp.		7,700		431
Nomura Holdings, Inc.		100,450		572
NSK Ltd.		7,553		89
NTT Data Corp.		4,400		165
NTT DoCoMo, Inc.		21,700		318
Obayashi Corp. (a)		11,571		74
Obic Co., Ltd.		2,200		71
Odakyu Electric Railway Co., Ltd.		18,000		160
OJI Holdings Corp.		8,000		29
Omron Corp.		9,804		439
Ono Pharmaceutical Co., Ltd.		2,700		239
Oriental Land Co., Ltd.		2,250		516
ORIX Corp.		27,160		340
Osaka Gas Co., Ltd.		91,600		342
Otsuka Holdings Co., Ltd.		9,100		273
Panasonic Corp.		20,700		243
Rakuten, Inc. (a)		7,200		100
Resona Holdings, Inc.		28,800		145
Rohm Co., Ltd.		6,805		413
Santen Pharmaceutical Co., Ltd.		2,700		145
Secom Co., Ltd.		6,885		396
Sega Sammy Holdings, Inc.		2,300		30
Seiko Epson Corp.		1,100		46
Sekisui Chemical Co., Ltd.		21,072		254
Sekisui House Ltd.		50,746		665
Seven & I Holdings Co., Ltd.		20,900		754
Shimamura Co., Ltd.		200		17
Shimano, Inc.		3,950		511
Shimizu Corp.		9,000		61
Shin-Etsu Chemical Co., Ltd.		12,493		813
Shionogi & Co., Ltd.		16,600		430
Shiseido Co., Ltd.		12,600		176
Shizuoka Bank Ltd. (The) (a)		18,000		165
SMC Corp.		1,905		496
Softbank Corp.		32,900		1,958

	Shares		Value (000)
Sojitz Corp.		48,400	$	68
Sompo Japan Nipponkoa Holdings, Inc.		9,600		241
Sony Corp. (a)		29,593		602
Sumitomo Chemical Co., Ltd.		54,600		216
Sumitomo Corp.		31,800		327
Sumitomo Electric Industries Ltd.		22,200		277
Sumitomo Metal Mining Co., Ltd.		22,300		333
Sumitomo Mitsui Financial Group, Inc.		35,600		1,286
Sumitomo Mitsui Trust Holdings, Inc.		191,167		730
Sumitomo Realty & Development Co., Ltd.		13,500		460
Suzuki Motor Corp.		2,900		87
Sysmex Corp.		1,500		67
T&D Holdings, Inc.		18,300		220
Taiheiyo Cement Corp. (a)		21,000		66
Taisei Corp. (a)		31,000		176
Takeda Pharmaceutical Co., Ltd.		24,800		1,029
TDK Corp.		6,252		368
Teijin Ltd.		5,608		15
Terumo Corp.		14,800		337
THK Co., Ltd.		8,200		198
Tobu Railway Co., Ltd. (a)		50,900		218
Toho Co., Ltd.		2,900		66
Tohoku Electric Power Co., Inc.		15,500		180
Tokio Marine Holdings, Inc.		28,020		910
Tokyo Electron Ltd.		5,000		379
Tokyo Gas Co., Ltd.		100,600		543
Tokyu Corp.		35,400		220
Tokyu Fudosan Holdings Corp.		14,000		96
Toppan Printing Co., Ltd.		12,600		82
Toray Industries, Inc.		48,100		385
Toshiba Corp.		110,026		466
TOTO Ltd.		4,000		47
Toyo Suisan Kaisha Ltd.		3,800		123
Toyota Industries Corp.		2,650		135
Toyota Motor Corp.		69,655		4,344
Trend Micro, Inc.		3,400		93
Unicharm Corp.		17,400		419
USS Co., Ltd.		4,100		63
West Japan Railway Co.		1,442		68
Yahoo! Japan Corp. (a)		67,900		245
Yakult Honsha Co., Ltd. (a)		3,300		174
Yamada Denki Co., Ltd. (a)		44,600		149
Yamaha Corp.		4,100		61
Yamaha Motor Co., Ltd.		7,300		147
Yamato Holdings Co., Ltd.		10,835		213
Yamato Kogyo Co., Ltd.		2,900		82
Yaskawa Electric Corp.		10,100		129
				70,442
Korea, Republic of (0.0%)
Nexon Co., Ltd.		6,300		59
Macau (0.0%)
Galaxy Entertainment Group Ltd. (d)		8,000		44

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Malta (0.0%)
BGP Holdings PLC (b)(c)(f)		72,261	$	—
Netherlands (3.3%)
Aegon N.V.		45,726		343
Akzo Nobel N.V.		6,051		420
ArcelorMittal		20,958		227
ASML Holding N.V.		13,766		1,475
Boskalis Westminster N.V.		120		7
CNH Industrial N.V.		80,161		646
Corio N.V. REIT		1,621		79
Gemalto N.V. (a)		3,130		256
Heineken N.V.		5,641		401
ING Groep N.V. CVA (b)		92,409		1,196
Koninklijke Ahold N.V.		22,981		409
Koninklijke DSM N.V.		4,004		243
Koninklijke KPN N.V.		104,124		328
Koninklijke Philips N.V.		23,254		675
Randstad Holding N.V.		287		14
Reed Elsevier N.V.		26,463		632
TNT Express N.V.		22,240		148
Unilever N.V. CVA		36,840		1,447
Wolters Kluwer N.V.		17,981		549
Ziggo N.V. (b)		6,670		311
				9,806
Norway (0.6%)
Akastor ASA (a)		3,810		11
DnB ASA		36,951		545
Norsk Hydro ASA		31,716		178
Orkla ASA		18,249		124
Statoil ASA		31,081		545
Subsea 7 SA (a)		6,448		66
Telenor ASA		15,967		322
				1,791
Portugal (0.1%)
Banco Comercial Portugues SA (b)		8,239		1
Galp Energia SGPS SA		17,993		182
				183
Singapore (1.6%)
Ascendas Real Estate Investment Trust REIT		53,000		95
CapitaCommercial Trust REIT		50,000		66
CapitaLand Ltd.		69,000		171
CapitaMall Trust REIT		63,218		97
City Developments Ltd. (a)		11,203		86
ComfortDelGro Corp., Ltd.		53,627		105
DBS Group Holdings Ltd.		46,091		712
Genting Singapore PLC (a)		165,000		134
Global Logistic Properties Ltd.		76,000		142
Jardine Cycle & Carriage Ltd.		3,065		98
Keppel Corp., Ltd.		39,200		262
Keppel Land Ltd.		17,000		44
Noble Group Ltd.		113,350		97
Oversea-Chinese Banking Corp. Ltd.		78,851		620
SembCorp Industries Ltd.		25,694		86

	Shares		Value (000)
SembCorp Marine Ltd. (a)		21,400	$	53
Singapore Airlines Ltd.		14,286		125
Singapore Exchange Ltd.		21,071		124
Singapore Press Holdings Ltd. (a)		43,433		138
Singapore Technologies Engineering Ltd.		41,000		105
Singapore Telecommunications Ltd.		210,745		619
StarHub Ltd.		15,000		47
United Overseas Bank Ltd.		34,956		646
UOL Group Ltd.		11,000		58
Wilmar International Ltd.		49,000		119
				4,849
South Africa (0.3%)
SABMiller PLC		17,960		929
Spain (1.1%)
Abertis Infraestructuras SA		2,402		47
ACS Actividades de Construccion y Servicios SA		1,275		44
Amadeus IT Holding SA, Class A		8,684		345
Banco Bilbao Vizcaya Argentaria SA		41,375		389
Banco de Sabadell SA (a)		67,000		176
Banco Popular Espanol SA		24,687		122
Banco Santander SA		101,752		851
Bankia SA (b)		78,780		117
CaixaBank SA		33,387		173
Distribuidora Internacional de Alimentacion SA		7,104		48
Ferrovial SA (a)		3,443		68
Grifols SA		3,855		153
Inditex SA		8,937		256
International Consolidated Airlines Group SA (b)		13,299		100
Mapfre SA		7,045		24
Repsol SA (a)		8,979		167
Telefonica SA		11,751		168
Zardoya Otis SA (a)		1,371		15
				3,263
Sweden (2.8%)
Assa Abloy AB, Class B		9,085		480
Electrolux AB, Class B		3,993		117
Elekta AB, Class B (a)		10,929		112
Getinge AB, Class B		10,086		229
Hennes & Mauritz AB, Class B		22,160		919
Hexagon AB, Class B		10,768		333
Investor AB, Class B		24,099		873
Lundin Petroleum AB (a)(b)		5,632		81
Nordea Bank AB		93,722		1,082
Securitas AB, Class B		3,121		38
Skanska AB, Class B		12,872		275
Svenska Cellulosa AB SCA, Class B		21,256		459
Svenska Handelsbanken AB, Class A		21,875		1,021
Swedish Match AB		9,835		307
Tele2 AB, Class B		824		10
Telefonaktiebolaget LM Ericsson, Class B		126,639		1,534
TeliaSonera AB		40,038		258
Volvo AB, Class B		33,903		366
				8,494

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Switzerland (9.6%)
ABB Ltd. (Registered) (b)		55,775	$	1,180
Actelion Ltd. (Registered) (b)		3,492		402
Adecco SA (Registered) (b)		259		18
Baloise Holding AG (Registered)		1,792		229
Cie Financiere Richemont SA (Registered)		9,953		882
Credit Suisse Group AG (Registered) (b)		34,812		873
Geberit AG (Registered)		1,187		403
Givaudan SA (Registered) (b)		234		418
Holcim Ltd. (Registered) (b)		7,204		512
Julius Baer Group Ltd. (a)(b)		7,487		342
Lonza Group AG (Registered) (b)		2,302		259
Nestle SA (Registered)		80,223		5,880
Novartis AG (Registered)		64,936		5,972
Pargesa Holding SA		265		20
Partners Group Holding AG		446		129
Roche Holding AG (Genusschein)		19,830		5,375
Schindler Holding AG		1,464		211
SGS SA (Registered)		24		49
Sonova Holding AG (Registered)		1,119		164
Swatch Group AG (The)		1,450		336
Swiss Life Holding AG (Registered) (b)		790		187
Swiss Prime Site AG (Registered) (b)		1,404		103
Swiss Re AG (b)		10,559		883
Swisscom AG (Registered)		1,111		583
Syngenta AG (Registered)		1,735		557
UBS Group AG (b)		84,288		1,449
Zurich Insurance Group AG (b)		4,728		1,480
				28,896
United Kingdom (18.2%)
3i Group PLC		23,064		160
Aberdeen Asset Management PLC		31,824		213
Admiral Group PLC		3,253		67
Amec Foster Wheeler PLC		9,273		121
Anglo American PLC		27,874		516
ARM Holdings PLC		51,529		793
AstraZeneca PLC		30,485		2,144
Aviva PLC		80,263		601
BAE Systems PLC		65,556		479
Barclays PLC		229,088		861
BG Group PLC		89,128		1,186
BHP Billiton PLC		42,171		902
BP PLC		305,598		1,940
British American Tobacco PLC		42,815		2,326
British Land Co., PLC REIT		23,697		285
BT Group PLC		239,534		1,487
Bunzl PLC		9,503		259
Burberry Group PLC		7,198		182
Capita PLC		7,351		123
Carnival PLC		5,401		244
Centrica PLC		48,876		210
Cobham PLC		702		4

	Shares		Value (000)
Compass Group PLC		59,673	$	1,017
Croda International PLC		3,268		135
Diageo PLC		56,363		1,617
easyJet PLC		1,570		41
Experian PLC		29,808		503
G4S PLC		16,315		70
GKN PLC		41,312		219
GlaxoSmithKline PLC		117,523		2,514
Glencore PLC		212,591		978
Hammerson PLC REIT		19,687		184
Hargreaves Lansdown PLC		3,757		59
HSBC Holdings PLC		403,187		3,810
Imperial Tobacco Group PLC		17,046		746
Indivior PLC (b)		17,250		40
InterContinental Hotels Group PLC		9,622		386
Intertek Group PLC		4,555		165
Intu Properties PLC REIT		14,426		75
Investec PLC		6,958		58
J Sainsbury PLC (a)		33,711		128
Johnson Matthey PLC		4,575		240
Kingfisher PLC		21,136		111
Land Securities Group PLC REIT		21,131		378
Legal & General Group PLC		113,655		437
Lloyds Banking Group PLC (b)		1,551,797		1,832
Marks & Spencer Group PLC		25,691		190
Meggitt PLC		15,537		124
National Grid PLC		35,422		505
Next PLC		4,146		437
Old Mutual PLC		86,496		254
Pearson PLC		29,811		548
Petrofac Ltd.		7,272		79
Prudential PLC		39,794		916
Reckitt Benckiser Group PLC		17,250		1,392
Reed Elsevier PLC		40,746		693
Rexam PLC		15,581		110
Rio Tinto PLC		25,502		1,175
Rolls-Royce Holdings PLC (b)		35,222		474
Royal Dutch Shell PLC, Class A		95,177		3,155
Royal Dutch Shell PLC, Class B		72,557		2,493
RSA Insurance Group PLC (b)		12,854		87
Sage Group PLC (The)		40,665		293
Schroders PLC		3,222		134
Segro PLC REIT		43,985		252
Severn Trent PLC		2,259		70
Shire PLC		14,406		1,019
Sky PLC		64,535		898
Smith & Nephew PLC		62,530		1,148
Smiths Group PLC		10,608		180
SSE PLC		9,203		231
Standard Chartered PLC		29,253		439
Standard Life PLC		35,034		216
Tesco PLC		185,879		541
Tullow Oil PLC		408		3

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
United Kingdom (cont'd)
Unilever PLC		19,330	$	785
United Utilities Group PLC		6,523		92
Vodafone Group PLC		648,087		2,221
Weir Group PLC (The)		3,863		111
Whitbread PLC		6,569		485
Wolseley PLC		6,337		361
WPP PLC		75,616		1,569
				54,526
United States (0.0%)
AAC Technologies Holdings, Inc. (a)(d)		5,000		27
Li & Fung Ltd. (a)(d)		16,000		15
				42
Total Common Stocks (Cost $254,552)				269,427
	No. of Rights
Rights (0.0%)
Australia (0.0%)
APA Group (b)		4,155		3
Spain (0.0%)
Repsol SA (a)(b)		8,979		5
Total Rights (Cost $5)				8
	No. of Warrants
Warrants (0.0%)
Hong Kong (0.0%)
Sun Hung Kai Properties Ltd., expires 4/22/16 (b) (Cost $6)		3,000		7
	Shares
Short-Term Investments (11.5%)
Security held as Collateral on Loaned Securities (2.5%)
Investment Company (2.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G)		7,465,877		7,466
Total Security held as Collateral on Loaned Securities (Cost $7,466)				7,466

	Shares		Value (000)
Investment Company (9.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $27,110)		27,109,692	$	27,110
Total Short-Term Investments (Cost $34,576)				34,576
Total Investments (101.3%) (Cost $289,139) Including $8,470 of Securities Loaned (g)(h)				304,018
Liabilities in Excess of Other Assets (-1.3%)				(4,007	)
Net Assets (100.0%)			$	300,011

(a) All or a portion of this security was on loan at December 31, 2014.

(b) Non-income producing security.

(d) Security trades on the Hong Kong exchange.

(e) Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(f) At December 31, 2014, the Portfolio held a fair valued security valued at $0, representing 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(g) Securities are available for collateral in connection with open foreign currency forward exchange and futures contracts.

(h) The approximate fair value and percentage of net assets, $267,713,000 and 89.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

@ Value is less than $500.

ADR American Depositary Receipt.

CVA Certificaten Van Aandelen.

REIT Real Estate Investment Trust.

VVPR Verminderde Voorheffing Précompte Réduit.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at December 31, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
Bank of New York Mellon	EUR	1,068	$	1,292	1/15/15	USD	1,336	$	1,336	$	44
Citibank NA	JPY	1,262,500		10,541	1/15/15	USD	10,778		10,778		237
Citibank NA	USD	13,614		13,614	1/15/15	EUR	10,880		13,167		(447	)
Citibank NA	USD	3,562		3,562	1/15/15	EUR	2,834		3,430		(132	)
Citibank NA	USD	9,217		9,217	1/15/15	JPY	1,070,843		8,941		(276	)
Citibank NA	USD	12,563		12,563	1/15/15	JPY	1,469,639		12,270		(293	)
Commonwealth Bank of Australia	USD	7,988		7,988	1/15/15	AUD	9,742		7,947		(41	)
Deutsche Bank AG	EUR	3,152		3,815	1/15/15	USD	3,944		3,944		129
Deutsche Bank AG	GBP	552		861	1/15/15	USD	869		869		8
Goldman Sachs International	EUR	767		928	1/15/15	USD	960		960		32
JPMorgan Chase Bank NA	EUR	675		816	1/15/15	USD	844		844		28
Northern Trust Company	JPY	3,050,989		25,474	1/15/15	USD	26,046		26,046		572
State Street Bank and Trust Co.	JPY	182,458		1,524	1/15/15	USD	1,558		1,558		34
State Street Bank and Trust Co.	USD	6,643		6,643	1/15/15	GBP	4,224		6,583		(60	)
UBS AG	EUR	1,933		2,339	1/15/15	USD	2,418		2,418		79
UBS AG	USD	1,086		1,086	1/15/15	GBP	691		1,076		(10	)
			$	102,263				$	102,167	$	(96	)

Futures Contracts:

The Portfolio had the following futures contracts open at December 31, 2014:

	Number of Contracts		Value (000)		Expiration Date	Unrealized Appreciation (Depreciation) (000)
Long:
CAC 40 Index (France)		50	$	2,588	Jan-15	$	81
Dax Index (Germany)		16		4,764	Mar-15		(12	)
FTSE 100 Index (United Kingdom)		60		6,099	Mar-15		265
Hang Seng Index (Hong Kong)		37		5,642	Jan-15		57
IBEX 35 Index (Spain)		62		7,686	Jan-15		196
SPI 200 Index (Australia)		40		4,395	Mar-15		221
						$	808

AUD — Australian Dollar

EUR — Euro

GBP — British Pound

JPY — Japanese Yen

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		70.7	%
Banks		10.3
Pharmaceuticals		9.9
Investment Company		9.1
Total Investments		100.0	%***

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

*** Does not include open long futures contracts with an underlying face amount of approximately $31,174,000 with net unrealized appreciation of approximately $808,000. Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $96,000.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Active International Allocation Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $252,872)	$	268,603
Investments in Securities of Affiliated Issuers, at Value (Cost $36,267)		35,415
Total Investments in Securities, at Value (Cost $289,139)		304,018
Foreign Currency, at Value (Cost $2,431)		2,370
Cash		1,303
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		1,163
Receivable for Variation Margin on Futures Contracts		2,232
Tax Reclaim Receivable		268
Dividends Receivable		212
Receivable for Portfolio Shares Sold		67
Receivable for Investments Sold		5
Receivable from Affiliates		3
Other Assets		38
Total Assets		311,679
Liabilities:
Collateral on Securities Loaned, at Value		8,769
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		1,259
Payable for Portfolio Shares Redeemed		569
Payable for Advisory Fees		511
Payable for Sub Transfer Agency Fees — Class I		232
Payable for Sub Transfer Agency Fees — Class A		105
Payable for Sub Transfer Agency Fees — Class L		17
Payable for Professional Fees		53
Payable for Custodian Fees		26
Payable for Shareholder Services Fees — Class A		16
Payable for Distribution and Shareholder Services Fees — Class L		6
Payable for Administration Fees		21
Payable for Directors' Fees and Expenses		18
Payable for Transfer Agency Fees — Class I		3
Payable for Transfer Agency Fees — Class A		6
Payable for Transfer Agency Fees — Class L		1
Other Liabilities		56
Total Liabilities		11,668
Net Assets	$	300,011
Net Assets Consist Of:
Paid-in-Capital	$	338,780
Distributions in Excess of Net Investment Income		(80	)
Accumulated Net Realized Loss		(54,192	)
Unrealized Appreciation (Depreciation) on:
Investments		15,731
Investments in Affiliates		(852	)
Futures Contracts		808
Foreign Currency Forward Exchange Contracts		(96	)
Foreign Currency Translations		(88	)
Net Assets	$	300,011

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Active International Allocation Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	219,467
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		17,535,970
Net Asset Value, Offering and Redemption Price Per Share	$	12.52
CLASS A:
Net Assets	$	71,938
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		5,626,080
Net Asset Value, Redemption Price Per Share	$	12.79
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.71
Maximum Offering Price Per Share	$	13.50
CLASS L:
Net Assets	$	8,606
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		675,497
Net Asset Value, Offering and Redemption Price Per Share	$	12.74
⁽¹⁾ Including: Securities on Loan, at Value:	$	8,470

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Active International Allocation Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $761 of Foreign Taxes Withheld)	$	11,283
Income from Securities Loaned — Net		234
Dividends from Securities of Affiliated Issuers (Note G)		61
Total Investment Income		11,578
Expenses:
Advisory Fees (Note B)		2,207
Sub Transfer Agency Fees		99
Sub Transfer Agency Fees — Class I		194
Sub Transfer Agency Fees — Class A		109
Sub Transfer Agency Fees — Class L		17
Shareholder Services Fees — Class A (Note D)		209
Distribution and Shareholder Services Fees — Class L (Note D)		72
Administration Fees (Note C)		272
Custodian Fees (Note F)		161
Professional Fees		118
Shareholder Reporting Fees		111
Pricing Fees		47
Registration Fees		32
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		8
Transfer Agency Fees — Class A (Note E)		14
Transfer Agency Fees — Class L (Note E)		4
Directors' Fees and Expenses		9
Other Expenses		29
Total Expenses		3,713
Reimbursement of Class Specific Expenses — Class I (Note B)		(202	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(40	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(11	)
Rebate from Morgan Stanley Affiliate (Note G)		(57	)
Waiver of Advisory Fees (Note B)		(31	)
Net Expenses		3,372
Net Investment Income		8,206
Realized Gain (Loss):
Investments Sold		(9,641	)
Investments in Affiliates		(301	)
Foreign Currency Forward Exchange Contracts		91
Foreign Currency Transactions		(147	)
Futures Contracts		1,534
Net Realized Loss		(8,464	)
Change in Unrealized Appreciation (Depreciation):
Investments		(19,814	)
Investments in Affiliates		75
Foreign Currency Forward Exchange Contracts		(422	)
Foreign Currency Translations		(59	)
Futures Contracts		(593	)
Net Change in Unrealized Appreciation (Depreciation)		(20,813	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(29,277	)
Net Decrease in Net Assets Resulting from Operations	$	(21,071	)

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Active International Allocation Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	8,206		$	5,793
Net Realized Gain (Loss)		(8,464	)		29,350
Net Change in Unrealized Appreciation (Depreciation)		(20,813	)		32,986
Net Increase (Decrease) in Net Assets Resulting from Operations		(21,071	)		68,129
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(6,048	)		(6,934	)
*Class A:**
Net Investment Income		(1,668	)		(1,805	)
*Class H:**
Net Investment Income		—			(308	)**
Class L:
Net Investment Income		(153	)		(195	)
Total Distributions		(7,869	)		(9,242	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		13,277			11,713
Distributions Reinvested		6,009			6,894
Redeemed		(39,288	)		(51,945	)
*Class A:**
Subscribed		4,264			7,891
Distributions Reinvested		1,634			1,767
Conversion from Class H		—			75,886
Redeemed		(17,601	)		(11,733	)
*Class H:**
Subscribed		—			907	**
Distributions Reinvested		—			299	**
Conversion to Class A		—			(75,886	)**
Redeemed		—			(8,634	)**
Class L:
Subscribed		30			58
Distributions Reinvested		150			191
Redeemed		(1,082	)		(1,854	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(32,607	)		(44,446	)
Redemption Fees		—	@		—	@
Total Increase (Decrease) in Net Assets		(61,547	)		14,441
Net Assets:
Beginning of Period		361,558			347,117
End of Period (Including Distributions in Excess of Net Investment Income of $(80) and $(399))	$	300,011		$	361,558

The accompanying notes are an integral part of the financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Active International Allocation Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		980			908
Shares Issued on Distributions Reinvested		484			531
Shares Redeemed		(2,888	)		(4,074	)
Net Decrease in Class I Shares Outstanding		(1,424	)		(2,635	)
*Class A:**
Shares Subscribed		309			631
Shares Issued on Distributions Reinvested		128			132
Conversion from Class H		—			5,855
Shares Redeemed		(1,270	)		(883	)
Net Increase (Decrease) in Class A Shares Outstanding		(833	)		5,735
*Class H:**
Shares Subscribed		—			73	**
Shares Issued on Distributions Reinvested		—			24	**
Conversion to Class A		—			(5,868	)**
Shares Redeemed		—			(688	)**
Net Decrease in Class H Shares Outstanding		—			(6,459	)
Class L:
Shares Subscribed		2			4
Shares Issued on Distributions Reinvested		12			15
Shares Redeemed		(79	)		(144	)
Net Decrease in Class L Shares Outstanding		(65	)		(125	)

@ Amount is less than $500.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
19

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Active International Allocation Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.75		$	11.65		$	10.07		$	12.06		$	11.30
Income (Loss) from Investment Operations:
Net Investment Income†		0.34			0.22			0.23			0.27			0.20
Net Realized and Unrealized Gain (Loss)		(1.22	)		2.25			1.51			(2.03	)		0.81
Total from Investment Operations		(0.88	)		2.47			1.74			(1.76	)		1.01
Distributions from and/or in Excess of:
Net Investment Income		(0.35	)		(0.37	)		(0.16	)		(0.23	)		(0.25	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	12.52		$	13.75		$	11.65		$	10.07		$	12.06
Total Return++		(6.37	)%		21.38	%		17.30	%		(14.56	)%		8.95	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	219,467		$	260,614		$	251,657		$	302,048		$	441,350
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.88	%+		0.83	%+		0.89	%+		0.84	%+^		0.79	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			0.88	%+		N/A			0.84	%+^		0.79	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		2.53	%+		1.71	%+		2.12	%+		2.33	%+		1.82	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.02	%		0.02	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		32	%		36	%		27	%		26	%		19	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.99	%		0.99	%		0.98	%		0.95	%		0.92	%+
Net Investment Income to Average Net Assets		2.42	%		1.55	%		2.03	%		2.22	%		1.69	%+

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

+ The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

^ Effective July 1, 2011, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to July 1, 2011, the maximum ratio was 0.80% for Class I shares.

The accompanying notes are an integral part of the financial statements.
20

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Active International Allocation Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	14.03		$	11.89		$	10.27		$	12.28		$	11.50
Income (Loss) from Investment Operations:
Net Investment Income†		0.30			0.11			0.20			0.25			0.18
Net Realized and Unrealized Gain (Loss)		(1.24	)		2.36			1.55			(2.07	)		0.81
Total from Investment Operations		(0.94	)		2.47			1.75			(1.82	)		0.99
Distributions from and/or in Excess of:
Net Investment Income		(0.30	)		(0.33	)		(0.13	)		(0.19	)		(0.21	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	12.79		$	14.03		$	11.89		$	10.27		$	12.28
Total Return++		(6.70	)%		20.94	%		17.05	%		(14.75	)%		8.69	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	71,938		$	90,599		$	8,608		$	10,387		$	14,477
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.23	%+		1.09	%+^^		1.14	%+		1.09	%+^		1.04	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.21	%+^^		N/A			1.09	%+^		1.04	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		2.18	%+		0.84	%+		1.80	%+		2.08	%+		1.57	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.02	%		0.02	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		32	%		36	%		27	%		26	%		19	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.31	%+		1.25	%+		1.23	%		1.20	%		1.17	%+
Net Investment Income to Average Net Assets		2.10	%+		0.68	%+		1.71	%		1.97	%		1.44	%+

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.15% for Class A shares.

^ Effective July 1, 2011, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.15% for Class A shares. Prior to July 1, 2011, the maximum ratio was 1.05% for Class A shares.

The accompanying notes are an integral part of the financial statements.
21

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Active International Allocation Portfolio

	Class L
	Year Ended December 31,						Period from June 14, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	13.97		$	11.84		$	10.09
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.23			0.12			(0.02	)
Net Realized and Unrealized Gain (Loss)		(1.23	)		2.27			1.91
Total from Investment Operations		(1.00	)		2.39			1.89
Distributions from and/or in Excess of:
Net Investment Income		(0.23	)		(0.26	)		(0.14	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	12.74		$	13.97		$	11.84
Total Return++		(7.17	)%		20.34	%		18.80	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,606		$	10,345		$	10,246
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.73	%+		1.61	%+^^		1.63	%+*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.66	%+^^		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.68	%+		0.94	%+		(0.33	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.02	%		0.02	%		0.02	%*
Portfolio Turnover Rate		32	%		36	%		27	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.87	%		1.76	%		1.79	%*
Net Investment Income (Loss) to Average Net Assets		1.54	%		0.79	%		(0.49	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

+ The Ratios of Expenses and Net Investment Income (Loss) reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.65% for Class L shares.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
22

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

Morgan Stanley Institutional Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of twenty-six separate, active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Active International Allocation Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily, in accordance with country and sector weightings determined by Morgan Stanley Investment Management Inc. (the "Adviser"), in equity securities of non-U.S. issuers which, in the aggregate, replicate broad market indices. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) futures are valued at the latest price published by the commodities exchange on which they trade; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally,

developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Directors have the ultimate responsibility of determining the fair value of the investments. Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	—	$	2,166	$	—		$	2,166
Air Freight & Logistics		—		910		—			910
Airlines		14		510		—			524
Auto Components		—		3,561		—			3,561
Automobiles		—		11,858		—			11,858
Banks		—		30,498		—			30,498
Beverages		—		6,303		—			6,303
Biotechnology		—		1,137		—			1,137
Building Products		—		2,141		—			2,141
Capital Markets		1,449		4,426		—			5,875
Chemicals		—		8,366		—			8,366
Commercial Services & Supplies		—		1,144		—			1,144
Communications Equipment		—		3,142		—			3,142
Computers & Peripherals		—		222		—			222
Construction & Engineering		—		2,435		—			2,435
Construction Materials		—		1,823		—			1,823
Consumer Finance		—		110		—			110
Containers & Packaging		—		375		—			375
Distributors		—		98		—			98
Diversified Consumer Services		—		61		—			61
Diversified Financial Services		—		2,175		—	†		2,175	†
Diversified Telecommunication Services		—		8,437		—			8,437
Electric Utilities		—		1,493		—			1,493
Electrical Equipment		111		3,752		—			3,863
Electronic Equipment, Instruments & Components		—		5,436		—			5,436
Energy Equipment & Services		—		473		—			473
Food & Staples Retailing		—		4,577		—			4,577

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Common Stocks (cont'd)
Food Products	$	—	$	10,373	$	—		$	10,373
Gas Utilities		—		1,049		—			1,049
Health Care Equipment & Supplies		—		2,535		—			2,535
Health Care Providers & Services		—		687		—			687
Hotels, Restaurants & Leisure		—		3,365		—			3,365
Household Durables		—		2,135		—			2,135
Household Products		—		2,564		—			2,564
Independent Power Producers & Energy Traders		—		58		—			58
Industrial Conglomerates		—		3,757		—			3,757
Information Technology Services		—		1,586		—			1,586
Insurance		—		14,185		—			14,185
Internet & Catalog Retail		—		100		—			100
Internet Software & Services		—		1,337		—			1,337
Leisure Products		—		719		—			719
Life Sciences Tools & Services		—		520		—			520
Machinery		100		7,654		—			7,754
Marine		—		478		—			478
Media		—		6,246		—			6,246
Metals & Mining		—		7,582		—			7,582
Multi-Utilities		—		5,857		—			5,857
Multi-line Retail		—		787		—			787
Oil, Gas & Consumable Fuels		—		13,627		—			13,627
Paper & Forest Products		—		642		—			642
Personal Products		—		1,220		—			1,220
Pharmaceuticals		40		29,376		—			29,416
Professional Services		—		895		—			895
Real Estate Investment Trusts (REITs)		—		3,818		—			3,818
Real Estate Management & Development		—		5,520		—			5,520
Road & Rail		—		3,172		—			3,172
Semiconductors & Semiconductor Equipment		—		3,720		—			3,720
Software		—		3,518		—			3,518
Specialty Retail		—		2,215		—			2,215
Tech Hardware, Storage & Peripherals		—		1,611		—			1,611
Textiles, Apparel & Luxury Goods		—		3,319		—			3,319
Tobacco		—		4,151		—			4,151
Trading Companies & Distributors		—		3,602		—			3,602
Transportation Infrastructure		—		337		—			337
Water Utilities		—		228		—			228
Wireless Telecommunication Services		—		5,539		—			5,539
Total Common Stocks		1,714		267,713		—	†		269,427	†

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)			Total (000)
Rights	$	5		$	3		$	—		$	8
Warrants		7			—			—			7
Short-Term Investments
Investment Company		34,576			—			—			34,576
Foreign Currency Forward Exchange Contracts		—			1,163			—			1,163
Futures Contracts		820			—			—			820
Total Assets		37,122			268,879			—	†		306,001	†
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(1,259	)		—			(1,259	)
Futures Contract		(12	)		—			—			(12	)
Total Liabilities		(12	)		(1,259	)		—			(1,271	)
Total	$	37,110		$	267,620		$	—	†	$	304,730	†

† Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $242,884,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)
Beginning Balance	$	—	†
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—
Realized gains (losses)		—
Ending Balance	$	—	†
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	—

† Includes one security which is valued at zero.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

3. Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Portfolio does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4. Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Portfolio's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has open positions in the futures contract.

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Portfolio also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following tables set forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Appreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

1,163

Futures Contracts

Variation Margin on
Futures Contracts

Equity Risk

820

(a)

Total

1,983

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Depreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

(1,259

)

Futures Contract

Variation Margin on
Futures Contract

Equity Risk

(12

)(a)

Total

(1,271

)

(a) This amount represents the cumulative appreciation (depreciation) as reported in the Portfolio of Investments. The Statement of Assets and Liabilities only reflects the current day's net variation margin.

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the year ended December 31, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	91
Equity Risk	Futures Contracts		1,534
Total		$	1,625
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(422	)
Equity Risk	Futures Contracts		(593	)
Total		$	(1,015	)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	1,163	$	(1,259	)

(b) Excludes exchange traded derivatives.

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA

Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
Bank of New York Mellon	$	44	$	—		$	—	$	44
Citibank NA		237		(237	)		—		0
Deutsche Bank AG		137		—			—		137
Goldman Sachs International		32		—			—		32
JPMorgan Chase Bank NA		28		—			—		28
Northern Trust Company		572		—			—		572
State Street Bank and Trust Co.		34		(34	)		—		0
UBS AG		79		(10	)		—		69
Total	$	1,163	$	(281	)	$	—	$	882

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
Citibank NA	$	1,148	$	(237	)	$	—	$	911
Commonwealth Bank of Australia		41		—			—		41
State Street Bank and Trust Co.		60		(34	)		—		26
UBS AG		10		(10	)		—		0
Total	$	1,259	$	(281	)	$	—	$	978

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	62,940,000
Futures Contracts:
Average monthly original value	$	45,446,000

5. Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	8,470	(d)	$	—	$	(8,470	)(e)(f)	$	0

(d) Represents market value of loaned securities at period end.

(e) The Portfolio received cash collateral of approximately $8,769,000, of which approximately $7,466,000 was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $1,303,000, which is not reflected in the Portfolio of Investments. In addition, the Portfolio received non-cash collateral of approximately $177,000 in the form of U.S. Government obligations, which the Portfolio cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(f) The actual collateral received is greater than the amount shown here due to overcollateralization.

6. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares and Class L shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

7. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Portfolio owns shares of real estate investment trusts ("REITs") which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $1 billion				Over $1 billion
	0.65	%			0.60	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.62% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares and 1.75% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $31,000 of advisory fees were waived and approximately $253,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Fund's Distributor of Portfolio shares pursuant to a Distribution Agreement. The Fund has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Portfolio pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class L shares.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $92,753,000 and $121,605,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $57,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	36,878			$	112,592			$	114,894			$	27			$	34,576

The Portfolio had transactions with Mitsubishi UFJ Financial Group, Inc. and its affiliated broker-dealers, which may be deemed affiliates of the Adviser/Administrator and Distributor under Section 17 the Act.

A summary of the Portfolio's transactions in shares of the Mitsubishi UFJ Financial Group, Inc. during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Realized Loss (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	1,368			$	—			$	304			$	(301	)		$	34			$	839

of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Portfolio.

H. Federal Income Taxes: It is the Portfolio's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for Federal income taxes is required in the financial statements.

The Portfolio may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10 Income Taxes — Overall sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2014, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2014 and 2013 was as follows:

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	7,870	$	—	$	9,242	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are primarily due to differing book and tax treatments in the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and basis adjustments on certain equity securities designated as passive foreign investment companies, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	(18	)		$	18			$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	479			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $293,562,000. The aggregate gross unrealized appreciation is approximately $37,318,000 and the aggregate gross unrealized depreciation is approximately $26,862,000 resulting in net unrealized depreciation of approximately $10,456,000.

At December 31, 2014, the Portfolio had available unused long-term capital losses of approximately $8,817,000 that do not have an expiration date.

In addition, at December 31, 2014, the Portfolio had available capital loss carryforwards to offset future net capital gains, to the extent provided by regulations, through the indicated expiration dates:

Amount (000)		Expiration*
$	7,834	December 31, 2016
	33,505	December 31, 2017

* Includes capital losses acquired from Morgan Stanley International Fund that may be subject to limitation under IRC Section 382 in future years.

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Active International Allocation Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Active International Allocation Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Active International Allocation Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the Portfolio's earnings for its taxable year ended December 31, 2014. When distributed, certain earnings may be subject to a maximum tax rate of 15% as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Portfolio designated up to a maximum of approximately $8,199,000 as taxable at this lower rate.

The Portfolio intends to pass through foreign tax credits of approximately $329,000 and has derived net income from sources within foreign countries amounting to approximately $11,967,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

We are required by federal law to provide you with notice of our U.S. privacy policy ("Policy"). This Policy applies to both our current and former clients unless we state otherwise and is intended for individual clients who purchase products or receive services from us for personal, family or household purposes. This Policy is not applicable to partnerships, corporations, trusts or other non-individual clients or account holders, nor is this Policy applicable to individuals who are either beneficiaries of a trust for which we serve as trustee or participants in an employee benefit plan administered or advised by us. This Policy is, however, applicable to individuals who select us to be a custodian of securities or assets in individual retirement accounts, 401(k) accounts, or accounts subject to the Uniform Gifts to Minors Act.

This notice sets out our business practices to protect your privacy; how we collect and share personal information about you; and how you can limit our sharing or certain uses by others of this information. We may amend this Policy at any time, and will inform you of any changes to our Policy as required by law.

WE RESPECT YOUR PRIVACY

We appreciate that you have provided us with your personal financial information and understand your concerns about your information. We strive to safeguard the information our clients entrust to us. Protecting the confidentiality and security of client information is an important part of how we conduct our business.

This notice describes what personal information we collect about you, how we collect it, when we may share it with others, and how certain others may use it. It discusses the steps you may take to limit our sharing of certain information about you with our affiliated companies, including, but not limited to our affiliated banking businesses, brokerage firms and credit service affiliates. It also discloses how you may limit our affiliates' use of shared information for marketing purposes.

Throughout this Policy, we refer to the nonpublic information that personally identifies you as "personal information." We also use the term "affiliated company" in this notice. An affiliated company is a company in our family of companies and includes companies with the Morgan Stanley name. These affiliated companies are financial institutions such as broker-dealers, banks, investment advisers and credit card issuers. We refer to any company that is not an affiliated company as a nonaffiliated third party. For purposes of Section 5 of this notice, and your ability to limit certain uses of personal information by our affiliates, this notice applies to the use of personal information by our affiliated companies.

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

We may collect the following types of information about you: (i) information provided by you, including information from applications and other forms we receive from you, (ii) information about your transactions with us or our affiliates, (iii) information about your transactions with nonaffiliated third parties, (iv) information from consumer reporting agencies, (v) information obtained from our websites, and (vi) information obtained from other sources. For example:

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about account balances, your use of account(s) and the types of products and services you prefer to receive from us through your dealings and transactions with us and other sources.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

We may disclose personal information that we collect about you to our affiliated companies to manage your account(s) effectively, to service and process your transactions, and to let you know about products and services offered by us and affiliated companies, to manage our business, and as otherwise required or permitted by law. Offers for products and services from affiliated companies are developed under conditions designed to safeguard your personal information.

b. Information We Disclose to Third Parties.

We may disclose personal information that we collect about you to nonaffiliated third parties to provide marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements. We may also disclose all of the information we collect to other nonaffiliated third parties for our everyday business purposes, such as to process transactions, maintain account(s), respond to court orders and legal investigations, report to credit bureaus, offer our own products and services, protect against fraud, for institutional risk control, to perform services on our behalf, and as otherwise required or permitted by law.

When we share personal information about you with a nonaffiliated third party, they are required to limit their use of personal information about you to the particular purpose for which it was shared and they are not allowed to share personal information about you with others except to fulfill that limited purpose or as may be permitted or required by law.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We maintain physical, electronic and procedural security measures that comply with applicable law and regulations to help safeguard the personal information we collect about you. We have internal policies governing the proper handling of client information by employees. Third parties that provide support or marketing services on our behalf may also receive personal information about you, and we require them to adhere to appropriate security standards with respect to such information.

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

By following the opt-out procedures in Section 6 below, you may limit the extent to which we share with our affiliated companies, personal information that was collected to determine your eligibility for products and services such as your credit reports and other information that you have provided to us or that we may obtain from third parties ("eligibility information"). Eligibility information does not include your identification information or personal information pertaining to our transactions or experiences with you. Please note that, even if you direct us not to share eligibility information with our affiliated companies, we may still share your personal information, including eligibility information, with our affiliated companies under circumstances that are permitted under applicable law, such as to process transactions or to service your account.

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

By following the opt-out instructions in Section 6 below, you may limit our affiliated companies from marketing their products or services to you based on personal information we disclose to them. This information may include, for example, your income and account history with us. Please note that, even if you choose to limit our affiliated companies from using personal information about you that we may share with them for marketing their products and services to you, our affiliated companies may use your personal information that they obtain from us to market to you in circumstances permitted by law, such as if the affiliated party has its own relationship with you.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

If you wish to limit our sharing of eligibility information about you with our affiliated companies, or our affiliated companies' use of personal information for marketing purposes, as described in this notice, you may do so by:

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

If you choose to write to us, your request should include: your name, address, telephone number and account number(s) to which the opt-out applies and whether you are opting out with respect to sharing of eligibility information (Section 4 above), or information used for marketing (Section 5 above), or both. Written opt-out requests should not be sent with any other correspondence. In order to process your request, we require that the request be provided by you directly and not through a third party. Once you have informed us about your privacy preferences, your opt-out preference will remain in effect with respect to this Policy (as it may be amended) until you notify us otherwise. If you are a joint account owner, we will accept instructions from any one of you and apply those instructions to the entire account.

Please understand that if you limit our sharing or our affiliated companies' use of personal information, you and any joint account holder(s) may not receive information about our affiliated companies' products and services, including products or services that could help you manage your financial resources and achieve your investment objectives.

If you have more than one account or relationship with us, please specify the accounts to which you would like us to apply your privacy choices. If you have accounts or relationships with our affiliates, you may receive multiple privacy policies from them, and will need to separately notify those companies of your privacy choices for those accounts or relationships.

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

If, at any time in the future, an affiliated company becomes a nonaffiliated third party, further disclosures of personal information made to the former affiliated company will be limited to those described in Section 2(b) above relating to nonaffiliated third parties. If you elected under Section 6 to limit disclosures we make to affiliated companies, or use of personal information by affiliated companies, your election will not apply to use by any former affiliated company of your personal information in their possession once it becomes a nonaffiliated third party.

SPECIAL NOTICE TO RESIDENTS OF VERMONT

The following section supplements our Policy with respect to our individual clients who have a Vermont address and supersedes anything to the contrary in the above Policy with respect to those clients only.

The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with nonaffiliated third parties, or eligibility information with affiliated companies, other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or eligibility information with affiliated companies, unless you provide us with your written consent to share such information.

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

The following section supplements our Policy with respect to our individual clients who have a California address and supersedes anything to the contrary in the above Policy with respect to those clients only.

In response to a California law, if your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

President, Strategic Decisions, LLC (consulting) (since February 2009); Director or Trustee of various Morgan Stanley Funds (since August 2006); Chairperson of the Insurance Sub-Committee of the Compliance and Insurance Committee (since February 2007); served as President and Chief Executive Officer of the Nuclear Energy Institute (policy organization) (February 2005-November 2008); retired as Admiral, U.S. Navy after serving over 38 years on active duty including 8 years as Director of the Naval Nuclear Propulsion Program in the Department of the Navy and the U.S. Department of Energy (1996-2004); served as Chief of Naval Personnel (July 1994-September 1996); and on the Joint Staff as Director of Political Military Affairs (June 1992-July 1994); knighted as Honorary Knight Commander of the Most Excellent Order of the British Empire; awarded the Officier de l'Orde National du Mérite by the French Government; elected to the National Academy of Engineering (2009).

Director of BP p.l.c.; Director of Naval and Nuclear Technologies LLP; Director of the Armed Services YMCA of the USA and the U.S. Naval Submarine League; Director of the American Shipbuilding Suppliers Association; Member of the National Security Advisory Council of the Center for U.S. Global Engagement and a member of the CNA Military Advisory Board; Chairman of the Charity, J Street Cup Golf Charity; Trustee of Fairhaven United Methodist Church.

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Private investor and a member of the advisory board of American Road Group LLC (retail) (since June 2000); Chairperson of the Compliance and Insurance Committee (since October 2006); Director or Trustee of various Morgan Stanley Funds (since April 1994); formerly, Chairperson of the Insurance Committee (July 2006-September 2006); Vice Chairman of Kmart Corporation (December 1998-October 2000), Chairman and Chief Executive Officer of Levitz Furniture Corporation (November 1995-November 1998) and President and Chief Executive Officer of Hills Department Stores (May 1991-July 1995); variously Chairman, Chief Executive Officer, President and Chief Operating Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck & Co.

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

President, Cedarwood Associates (mutual fund and investment management consulting) (since July 2006); Chairperson of the Money Market and Alternatives Sub-Committee of the Investment Committee (since October 2006) and Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Senior Managing Director of Victory Capital Management (1993-2006).

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Owner, OBIR, LLC (since June 2014); formerly, Managing Director, BlackRock, Inc. (February 2011-December 2013); and Chief Executive Officer, General Motors Asset Management (a/k/a Promark Global Advisors, Inc.) (June 2005-May 2010).

Member of Virginia Commonwealth University Board of Visitors; Member of Virginia Commonwealth University School of Business Foundation; formerly, Member of Committee on Directors for Emerging Markets Growth Fund, Inc. (2007-2010); Chairperson of Performance Equity Management, LLC (2006-2010); and Chairperson, GMAM Absolute Return Strategies Fund, LLC (2006-2010).

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Chairman and Chief Executive Officer, Opus Capital Group (since January 1996); and formerly, Director, Capvest Venture Fund, LP (May 2000-December 2011); Partner, Adena Ventures, LP (July 1999-December 2010); Director, The Victory Funds (February 2005-July 2008).

Director of Cincinnati Bell Inc. and Member, Audit Committee and Compensation Committee; Director of Northern Kentucky University Foundation and Member, Investment Committee; Member of Chase College of Law Transactional Law Practice Center Board of Advisors; Director of Best Transport; Member, University of Cincinnati Foundation Investment Committee; formerly, Member, Miami University Board of Visitors (2008-2011); Trustee of Victory Funds (2005-2008) and Chairman, Investment Committee (2007-2008) and Member, Service Provider Committee (2005-2008).

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Investment Committee (since October 2006) and Director or Trustee of various Morgan Stanley Funds (since July 1991); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly Chairperson of the Audit Committee (July 1991-September 2006), Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

President, Kearns & Associates LLC (investment consulting); Chairperson of the Audit Committee (since October 2006) and Director or Trustee of various Morgan Stanley Funds (since August 1994); formerly, Deputy Chairperson of the Audit Committee (July 2003-September 2006) and Chairperson of the Audit Committee of various Morgan Stanley Funds (since August 1994); CFO of the J. Paul Getty Trust.

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Managing Director, Aetos Capital, LLC (since March 2000); Co-President, Aetos Alternatives Management, LLC (since January 2004); and Co-Chief Executive Officer of Aetos Capital LLC (since August 2013); Chairperson of the Fixed Income Sub-Committee of the Investment Committee (since October 2006) and Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management, President, various Morgan Stanley Funds (June 1998-March 2000) and Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997-December 1999).

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

Chairperson of the Boards of various Morgan Stanley Funds (since July 2006); Chairperson of the Closed-End Fund Committee (since June 2012) and Director or Trustee of various Morgan Stanley Funds (since July 1991); formerly, Chairperson of the Insurance Committee (until July 2006), General Partner, TriumphCapital, L.P. (private investment partnership) (1988-2013).

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Chairperson of the Equity Sub-Committee of the Investment Committee (since October 2006) and Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, President and CEO of General Motors Asset Management; Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994-December 2005).

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

Formerly, Director of AXA Financial, Inc. and AXA Equitable Life Insurance Company (2002-2011) and Director of AXA MONY Life Insurance Company and AXA MONY Life Insurance Company of America (2004-2011).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

** The Fund Complex includes (as of December 31, 2014) all open-end and closed-end funds (including all of their portfolios) advised by Morgan Stanley Investment Management Inc. (the "Adviser") and any funds that have an adviser that is an affiliated person of the Adviser (including, but not limited to, Morgan Stanley AIP GP LP).

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

President and Principal Executive Officer of the Equity and Fixed Income Funds and the Morgan Stanley AIP Funds (since September 2013) and the Liquidity Funds and various money market funds (since May 2014) in the Fund Complex, Managing Director of the Adviser; Head of Product (since 2006) and Global Portfolio Analysis and Reporting (since 2012); for MSIM's Long Only business.

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Managing Director of the Adviser and various entities affiliated with the Adviser; Chief Compliance Officer of various Morgan Stanley Funds and the Adviser (since January 2014); formerly, Vice President of various Morgan Stanley Funds (December 1997-January 2014).

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Managing Director of the Adviser and various entities affiliated with the Adviser; Vice President of various Morgan Stanley Funds (since January 2014); formerly, Assistant Secretary of various Morgan Stanley Funds (October 2004-January 2014).

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus of the Morgan Stanley Institutional Fund, Inc., which describes in detail each Portfolio's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Portfolio, please visit our website at www.morganstanley.com/im or call toll free 1 (800) 548-7786.

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIAIAANN
1125083 Exp. 02.19.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

U.S. Real Estate Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					25
Federal Tax Notice					26
U.S. Privacy Policy					27
Director and Officer Information					30

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in U.S. Real Estate Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

U.S. Real Estate Portfolio

As a shareholder of the Portfolio, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, including advisory fees, administration fees, distribution and shareholder services fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the information for each class in 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 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
U.S. Real Estate Portfolio Class I	$	1,000.00	$	1,113.10	$	1,020.82	$	4.63	$	4.43		0.87	%
U.S. Real Estate Portfolio Class A		1,000.00		1,110.10		1,018.55		7.02		6.72		1.32
U.S. Real Estate Portfolio Class L		1,000.00		1,108.00		1,016.28		9.40		9.00		1.77
U.S. Real Estate Portfolio Class IS		1,000.00		1,112.40		1,020.72		4.74		4.53		0.89

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

U.S. Real Estate Portfolio

The Portfolio seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs").

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 30.74%, net of fees, for Class I shares. The Portfolio's Class I shares outperformed against the Portfolio's benchmark, the FTSE NAREIT Equity REITs Index (the "Index"), which returned 30.14%, and against the S&P 500® Index, which returned 13.69%. Please keep in mind that high double-digit returns are highly unusual and cannot be sustained.

Factors Affecting Performance

• The REIT market gained 30.14% in the 12-month period ending December 31, 2014, as measured by the Index. During the year, movements in REIT share prices appear to have continued to be largely influenced by transactional evidence in the private markets of strong investor demand for core assets at valuations that demonstrate the acceptance of low expected returns, and investors' continuing search for yield. Share prices also appeared to fluctuate alongside renewed downward pressure on yields for prime assets due in part to lower sovereign yields. REITs outperformed the broader equity markets during the year, as the U.S. market posted the best returns based upon significant transaction activity demonstrating improved private market values, strong operating fundamentals, lower interest rates and the strength of the U.S. dollar.

• Among the major sectors, the apartment and retail sectors outperformed and the office sector underperformed the Index. Apartment companies outperformed as the sector continues to experience improved investor sentiment after suffering from significant underperformance in 2013. Investors appeared to be impressed with favorable operating fundamentals and a plateauing of the supply pipeline. Within the office sector, companies with exposure to specialty office and central business district (CBD) outperformed, while the secondary CBD/suburban office sector underperformed the Index. The retail sector outperformed as the owners of malls outperformed and owners of shopping

centers performed roughly in-line with the Index. The health care REITs outperformed the Index, as returns were likely boosted by investors searching for higher yields, particularly as the 10-year Treasury yield declined in the fourth quarter. Among the smaller sectors, the hotel and storage sectors outperformed, while the industrial sector underperformed the Index. The net lease sector was a significant underperformer. The weakness was virtually entirely due to a decline in the shares of large cap net lease company, which announced accounting irregularities and the related resignations of their chief financial officer and chief administrative officer in October and subsequent resignations by their Chairman, chief executive officer and chief operating office in December.

• The Portfolio's Class I shares outperformed the Index for the period. Contributions to the Portfolio's performance relative to the Index came from top-down sector allocation and to a lesser extent bottom-up stock selection. Cash held in the Portfolio detracted. From a bottom-up perspective, the Portfolio achieved favorable relative stock selection in the shopping center, net lease, and mall sectors. This was partially offset by the negative impact of stock selection in the hotel and health care sectors. From a top-down perspective, the underweight to the net lease, secondary CBD/suburban office and diversified sectors, and overweight to the apartment and hotel sectors contributed to relative performance. This was partially offset by the underweight to the specialty office and health care sectors, which detracted from performance.

Management Strategies

• We have maintained our core investment philosophy as a real estate value investor. This results in the ownership of stocks whose share prices we believe provide real estate exposure at the best valuation relative to their underlying asset values. We continue to focus on relative implied valuations as a key metric. Our company-specific research leads us to an overweighting in the Portfolio to a group of companies that are focused in the ownership of high quality malls, apartments, upscale hotels, CBD office assets and a number of out-of-favor companies, and an underweighting to

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

U.S. Real Estate Portfolio

companies focused in the ownership of net lease and health care assets.

• Our outlook for the REIT market is based on two key factors: private market pricing for underlying real estate assets and public market pricing for the securities. With asset values for high quality assets having fully recovered and now, on average, 15% in excess of their all-time peak levels achieved in 2007, the overall REIT market ended the year at around a 5% premium to net asset values (NAVs).⁽ⁱ⁾ This reflects a bifurcation in the market between the core property sectors (apartments, malls) trading at discounts/par to NAVs and finance-company/dividend-oriented stocks (health care, net lease) trading at significant premiums to NAVs. It is noteworthy that, historically, it has been unusual for high capitalization rate assets to be trading at the largest premiums.

⁽ⁱ⁾ Source: Morgan Stanley Investment Management and Green Street Advisors, Inc.

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the FTSE NAREIT Equity REITs Index⁽¹⁾, the S&P 500^® Index⁽²⁾, and the Lipper Real Estate Funds Average⁽³⁾

	Period Ended December 31, 2014 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁹⁾
Portfolio — Class I Shares w/o sales charges⁽⁵⁾		30.74	%		16.38	%		8.85	%		13.17	%
FTSE NAREIT Equity REITs Index		30.14			16.88			8.31			11.59
S&P 500^® Index		13.69			15.45			7.67			9.57
Lipper Real Estate Funds Average		27.64			16.15			7.52			12.13
Portfolio — Class A Shares w/o sales charges⁽⁶⁾		30.28			16.05			8.56			12.31
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁶⁾		23.43			14.80			7.97			11.99
FTSE NAREIT Equity REITs Index		30.14			16.88			8.31			11.32
S&P 500^® Index		13.69			15.45			7.67			8.51
Lipper Real Estate Funds Average		27.64			16.15			7.52			11.84
Portfolio — Class L Shares w/o sales charges⁽⁷⁾		29.68			—			—			14.74
FTSE NAREIT Equity REITs Index		30.14			—			—			16.39
S&P 500^® Index		13.69			—			—			19.38
Lipper Real Estate Funds Average		27.64			—			—			15.25
Portfolio — Class IS Shares w/o sales charges⁽⁸⁾		30.82			—			—			23.27
FTSE NAREIT Equity REITs Index		30.14			—			—			22.25
S&P 500^® Index		13.69			—			—			18.92
Lipper Real Estate Funds Average		27.64			—			—			20.94

⁽¹⁾ The FTSE NAREIT (National Association of Real Estate Investment Trusts) Equity REITs Index is free float-adjusted market capitalization weighted index of tax-qualified REITs listed on the New York Stock Exchange, NYSE Amex and the NASDAQ National Market Systems. Effective December 20, 2010, the FTSE NAREIT Equity REITs Index does not include "Timber REITs" The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Standard & Poor's 500^® Index (S&P 500^®) measures the performance of the large cap segment of the U.S. equities market, covering approximately 75% of the U.S. equities market. The Index includes 500 leading companies in leading industries of the U.S. economy. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽³⁾ The Lipper Real Estate Funds Average tracks the performance of all funds in the Lipper Real Estate Funds classification. The Average, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. As of the date of this report, the Portfolio is in the Lipper Real Estate Funds classification.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

U.S. Real Estate Portfolio

⁽⁴⁾ Total returns for the Portfolio reflect fees waived and expenses reimbursed, if applicable, by the Adviser. Without such waivers and reimbursements, total returns would have been lower. The fee waivers and/or expense reimbursements will continue for at least one year or until such time as the Fund's Board of Directors acts to discontinue all or a portion of such waivers and/or expense reimbursements when it deems that such action is appropriate.

⁽⁵⁾ Commenced operations on February 24, 1995.

⁽⁶⁾ Commenced offering on January 2, 1996.

⁽⁷⁾ Commenced offering on November 11, 2011.

⁽⁸⁾ Commenced offering on September 13, 2013.

⁽⁹⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date or initial offering of the respective share class of the Portfolio, not the inception of the Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

U.S. Real Estate Portfolio

	Shares		Value (000)
Common Stocks (99.1%)
Apartments (17.8%)
AvalonBay Communities, Inc. REIT		355,298	$	58,052
Camden Property Trust REIT		258,717		19,104
Equity Residential REIT		1,245,143		89,451
Essex Property Trust, Inc. REIT		44,778		9,251
Mid-America Apartment Communities, Inc. REIT		168,607		12,592
				188,450
Diversified (7.3)
Lexington Realty Trust REIT		45,670		501
Vornado Realty Trust REIT		615,686		72,472
WP Carey, Inc. REIT		62,008		4,347
				77,320
Health Care (7.7%)
American Realty Capital Healthcare Trust, Inc. REIT		388,370		4,622
HCP, Inc. REIT		394,529		17,371
Health Care REIT, Inc.		99,225		7,508
Healthcare Realty Trust, Inc. REIT		165,894		4,532
Senior Housing Properties Trust REIT		955,931		21,136
Ventas, Inc. REIT		379,750		27,228
				82,397
Industrial (5.3%)
Cabot Industrial Value Fund II, LP REIT (a)(b)(c)(d)		14,000		6,781
Exeter Industrial Value Fund, LP REIT (a)(b)(c)(d)		7,905,000		7,059
Keystone Industrial Fund, LP REIT (a)(b)(c)(d)		7,574,257		7,317
KTR Industrial Fund II, LP REIT (a)(b)(c)(d)		9,195,652		10,023
ProLogis, Inc. REIT		505,309		21,744
Rexford Industrial Realty, Inc. REIT		225,637		3,545
				56,469
Lodging/Resorts (13.0%)
Chesapeake Lodging Trust		276,179		10,277
Extended Stay America, Inc.		132,660		2,562
Hilton Worldwide Holdings, Inc. (a)		468,380		12,220
Host Hotels & Resorts, Inc. REIT		3,414,569		81,164
La Quinta Holdings, Inc. (a)		122,169		2,695
Starwood Hotels & Resorts Worldwide, Inc.		290,157		23,523
Sunstone Hotel Investors, Inc. REIT		365,190		6,029
				138,470
Manufactured Homes (1.4%)
Equity Lifestyle Properties, Inc. REIT		282,956		14,586
Mixed Industrial/Office (1.4%)
Duke Realty Corp. REIT		277,475		5,605
Liberty Property Trust REIT		235,210		8,851
				14,456
Office (10.4%)
Alexandria Real Estate Equities, Inc. REIT		69,220		6,142
BioMed Realty Trust, Inc. REIT		283,030		6,096
Boston Properties, Inc. REIT		304,580		39,196
BRCP REIT I, LP (a)(b)(c)(d)		6,101,396		1,068
BRCP REIT II, LP (a)(b)(c)(d)		8,363,574		4,976
Corporate Office Properties Trust REIT		102,490		2,908

	Shares		Value (000)
Cousins Properties, Inc. REIT		1,048,563	$	11,975
Douglas Emmett, Inc. REIT		335,895		9,539
Hudson Pacific Properties, Inc. REIT		450,156		13,532
Mack-Cali Realty Corp. REIT		531,884		10,138
New York REIT, Inc.		48,228		511
Paramount Group, Inc. REIT (a)		258,293		4,802
				110,883
Regional Malls (19.2%)
General Growth Properties, Inc. REIT		1,597,855		44,948
Macerich Co. (The) REIT		268,746		22,416
Simon Property Group, Inc. REIT		747,192		136,071
				203,435
Retail Free Standing (2.4%)
National Retail Properties, Inc. REIT		311,781		12,275
Realty Income Corp. REIT		190,700		9,098
STORE Capital Corp. REIT		172,761		3,734
				25,107
Self Storage (5.4%)
CubeSmart REIT		131,329		2,898
Public Storage REIT		274,199		50,686
Sovran Self Storage, Inc. REIT		44,153		3,851
				57,435
Shopping Centers (7.8%)
Acadia Realty Trust REIT		116,397		3,728
DDR Corp. REIT		123,406		2,266
Equity One, Inc. REIT		89,549		2,271
Federal Realty Investment Trust REIT		64,485		8,606
Kimco Realty Corp. REIT		386,050		9,705
Regency Centers Corp. REIT		505,973		32,271
Tanger Factory Outlet Centers, Inc. REIT		641,469		23,709
				82,556
Total Common Stocks (Cost $698,482)				1,051,564
Short-Term Investment (0.9%)
Investment Company (0.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $9,090)		9,090,432		9,090
Total Investments (100.0%) (Cost $707,572)				1,060,654
Other Assets in Excess of Liabilities (0.0%) (e)				29
Net Assets (100.0%)			$	1,060,683

(a) Non-income producing security.

(b) Security has been deemed illiquid at December 31, 2014.

(c) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $37,224,000, representing 3.5% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

U.S. Real Estate Portfolio

(d) Restricted security valued at fair value and not registered under the Securities Act of 1933. BRCP REIT I, LP was acquired between 5/03 - 5/08 and has a cost basis of approximately $506,000. BRCP REIT II, LP was acquired between 10/06 - 4/11 and has a current cost basis of approximately $8,364,000. Cabot Industrial Value Fund II, LP was acquired between 11/05 - 2/10 and has a current cost basis of approximately $7,000,000. Exeter Industrial Value Fund, LP was acquired between 11/07 - 4/11 and has a current cost basis of approximately $6,166,000. Keystone Industrial Fund, LP was acquired between 3/06 - 6/11 and has a current cost basis of approximately $4,462,000. KTR Industrial Fund II, LP was acquired between 1/09 - 5/12 and has a current cost basis of approximately $3,231,000. At December 31, 2014, these securities had an aggregate market value of approximately $37,224,000, representing 3.5% of net assets.

(e) Amount is less than 0.05%.

REIT Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Regional Malls		19.2	%
Apartments		17.8
Lodging/Resorts		13.1
Office		10.5
Shopping Centers		7.8
Health Care		7.7
Diversified		7.3
Self Storage		5.4
Industrial		5.3
Other*		5.9
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Real Estate Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $698,482)	$	1,051,564
Investment in Security of Affiliated Issuer, at Value (Cost $9,090)		9,090
Total Investments in Securities, at Value (Cost $707,572)		1,060,654
Foreign Currency, at Value (Cost $1)		1
Dividends Receivable		5,019
Receivable for Portfolio Shares Sold		953
Receivable for Investments Sold		490
Receivable from Affiliate		—	@
Other Assets		64
Total Assets		1,067,181
Liabilities:
Payable for Portfolio Shares Redeemed		2,616
Payable for Advisory Fees		1,996
Payable for Investments Purchased		1,322
Payable for Sub Transfer Agency Fees — Class I		214
Payable for Sub Transfer Agency Fees — Class A		91
Payable for Sub Transfer Agency Fees — Class L		5
Payable for Administration Fees		72
Payable for Professional Fees		40
Payable for Shareholder Services Fees — Class A		23
Payable for Distribution and Shareholder Services Fees — Class L		3
Payable for Directors' Fees and Expenses		22
Payable for Transfer Agency Fees — Class I		10
Payable for Transfer Agency Fees — Class A		5
Payable for Transfer Agency Fees — Class L		1
Payable for Custodian Fees		6
Other Liabilities		72
Total Liabilities		6,498
Net Assets	$	1,060,683
Net Assets Consist Of:
Paid-in-Capital	$	685,180
Accumulated Undistributed Net Investment Income		1,289
Accumulated Net Realized Gain		21,132
Unrealized Appreciation (Depreciation) on:
Investments		353,082
Foreign Currency Translations		(—	@)
Net Assets	$	1,060,683

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	948,311
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		46,313,563
Net Asset Value, Offering and Redemption Price Per Share	$	20.48
CLASS A:
Net Assets	$	107,441
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		5,360,566
Net Asset Value, Redemption Price Per Share	$	20.04
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.11
Maximum Offering Price Per Share	$	21.15
CLASS L:
Net Assets	$	4,919
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		245,619
Net Asset Value, Offering and Redemption Price Per Share	$	20.03
CLASS IS:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		584
Net Asset Value, Offering and Redemption Price Per Share	$	20.48

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Real Estate Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	28,366
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		28,368
Expenses:
Advisory Fees (Note B)		7,720
Administration Fees (Note C)		798
Sub Transfer Agency Fees		(171	)#
Sub Transfer Agency Fees — Class I		481
Sub Transfer Agency Fees — Class A		178
Sub Transfer Agency Fees — Class L		5
Shareholder Services Fees — Class A (Note D)		274
Distribution and Shareholder Services Fees — Class L (Note D)		35
Shareholder Reporting Fees		167
Professional Fees		90
Registration Fees		54
Transfer Agency Fees (Note E)		—	@
Transfer Agency Fees — Class I (Note E)		28
Transfer Agency Fees — Class A (Note E)		13
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		34
Directors' Fees and Expenses		23
Pricing Fees		4
Other Expenses		28
Expenses Before Non Operating Expenses		9,765
Investment Related Expenses		68
Total Expenses		9,833
Rebate from Morgan Stanley Affiliate (Note G)		(7	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Net Expenses		9,824
Net Investment Income		18,544
Realized Gain:
Investments Sold		56,530
Change in Unrealized Appreciation (Depreciation):
Investments		190,135
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		190,135
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		246,665
Net Increase in Net Assets Resulting from Operations	$	265,209

@ Amount is less than $500.

# Over accrual of prior year expenses.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Real Estate Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	18,544		$	15,031
Net Realized Gain		56,530			27,034
Net Change in Unrealized Appreciation (Depreciation)		190,135			(19,185	)
Net Increase in Net Assets Resulting from Operations		265,209			22,880
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(15,986	)		(18,870	)
Net Realized Gain		(33,514	)		(19,628	)
*Class A:**
Net Investment Income		(1,569	)		(1,988	)
Net Realized Gain		(3,982	)		(2,365	)
*Class H:**
Net Investment Income		—			(101	)**
Net Realized Gain		—			(123	)**
Class L:
Net Investment Income		(45	)		(69	)
Net Realized Gain		(176	)		(113	)
Class IS:
Net Investment Income		(—	@)		(—	@)***
Net Realized Gain		(—	@)		(—	@)***
Total Distributions		(55,272	)		(43,257	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		190,489			393,679
Distributions Reinvested		39,540			30,554
Redeemed		(265,506	)		(433,966	)
*Class A:**
Subscribed		33,259			24,542
Distributions Reinvested		5,518			4,337
Conversion from Class H		—			23,632
Redeemed		(55,752	)		(42,145	)
*Class H:**
Subscribed		—			2,068	**
Distributions Reinvested		—			216	**
Conversion to Class A		—			(23,632	)
Redeemed		—			(3,794	)**
Class L:
Subscribed		213			533
Distributions Reinvested		219			179
Redeemed		(964	)		(1,138	)
Class IS:
Subscribed		—			10	***
Net Decrease in Net Assets Resulting from Capital Share Transactions		(52,984	)		(24,925	)
Total Increase (Decrease) in Net Assets		156,953			(45,302	)
Net Assets:
Beginning of Period		903,730			949,032
End of Period (Including Accumulated Undistributed Net Investment Income of $1,289 and $478)	$	1,060,683		$	903,730

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		10,099			22,284
Shares Issued on Distributions Reinvested		2,019			1,827
Shares Redeemed		(14,030	)		(24,704	)
Net Decrease in Class I Shares Outstanding		(1,912	)		(593	)
*Class A:**
Shares Subscribed		1,789			1,437
Shares Issued on Distributions Reinvested		288			266
Conversion from Class H		—			1,442
Shares Redeemed		(2,966	)		(2,453	)
Net Increase (Decrease) in Class A Shares Outstanding		(889	)		692
*Class H:**
Shares Subscribed		—			118	**
Shares Issued on Distributions Reinvested		—			12	**
Conversion to Class A		—			(1,442	)
Shares Redeemed		—			(218	)**
Net Decrease in Class H Shares Outstanding		—			(1,530	)
Class L:
Shares Subscribed		11			31
Shares Issued on Distributions Reinvested		11			11
Shares Redeemed		(52	)		(67	)
Net Decrease in Class L Shares Outstanding		(30	)		(25	)
Class IS:
Shares Subscribed		—			1	***

@ Amount is less than $500.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

U.S. Real Estate Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	16.55		$	16.93		$	14.99		$	14.33		$	11.18
Income from Investment Operations:
Net Investment Income†		0.36			0.27			0.24			0.11			0.30
Net Realized and Unrealized Gain		4.66			0.14			2.19			0.69			3.02
Total from Investment Operations		5.02			0.41			2.43			0.80			3.32
Distributions from and/or in Excess of:
Net Investment Income		(0.35	)		(0.20	)		(0.20	)		(0.14	)		(0.17	)
Net Realized Gain		(0.74	)		(0.59	)		(0.29	)		—			—
Total Distributions		(1.09	)		(0.79	)		(0.49	)		(0.14	)		(0.17	)
Net Asset Value, End of Period	$	20.48		$	16.55		$	16.93		$	14.99		$	14.33
Total Return++		30.74	%		2.45	%		16.26	%		5.57	%		29.86	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	948,311		$	797,933		$	826,420		$	773,138		$	855,474
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.95	%+		1.01	%+		0.98	%+		1.01	%+		0.99	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		0.94	%+		1.00	%+		0.97	%+		1.00	%+		0.98	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.90	%+		1.51	%+		2.45	%+		0.76	%+		2.34	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		25	%		24	%		22	%		21	%		41	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.03	%		N/A			1.03	%		N/A
Net Investment Income to Average Net Assets		N/A			1.49	%		N/A			0.74	%		N/A

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

U.S. Real Estate Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	16.21		$	16.60		$	14.70		$	14.07		$	10.99
Income from Investment Operations:
Net Investment Income†		0.29			0.23			0.19			0.08			0.26
Net Realized and Unrealized Gain		4.56			0.12			2.16			0.66			2.96
Total from Investment Operations		4.85			0.35			2.35			0.74			3.22
Distributions from and/or in Excess of:
Net Investment Income		(0.28	)		(0.15	)		(0.16	)		(0.11	)		(0.14	)
Net Realized Gain		(0.74	)		(0.59	)		(0.29	)		—			—
Total Distributions		(1.02	)		(0.74	)		(0.45	)		(0.11	)		(0.14	)
Net Asset Value, End of Period	$	20.04		$	16.21		$	16.60		$	14.70		$	14.07
Total Return++		30.28	%		2.14	%		16.02	%		5.26	%		29.51	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	107,441		$	101,325		$	92,240		$	92,047		$	89,321
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.31	%+		1.28	%+^		1.23	%+		1.26	%+		1.24	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.30	%+		1.27	%+^		1.22	%+		1.25	%+		1.23	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.54	%+		1.35	%+		2.20	%+		0.54	%+		2.09	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		25	%		24	%		22	%		21	%		41	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.29	%		N/A			1.28	%		N/A
Net Investment Income to Average Net Assets		N/A			1.34	%		N/A			0.52	%		N/A

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.25% for Class A shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

U.S. Real Estate Portfolio

	Class L
	Year Ended December 31,									Period from November 11, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	16.20		$	16.59		$	14.69		$	14.52
Income from Investment Operations:
Net Investment Income†		0.20			0.13			0.10			0.06
Net Realized and Unrealized Gain		4.56			0.13			2.16			0.11
Total from Investment Operations		4.76			0.26			2.26			0.17
Distributions from and/or in Excess of:
Net Investment Income		(0.19	)		(0.06	)		(0.07	)		—
Net Realized Gain		(0.74	)		(0.59	)		(0.29	)		—
Total Distributions		(0.93	)		(0.65	)		(0.36	)		—
Net Asset Value, End of Period	$	20.03		$	16.20		$	16.59		$	14.69
Total Return++		29.68	%		1.62	%		15.44	%		1.17	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,919		$	4,462		$	4,975		$	5,879
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.79	%+		1.78	%+^^		1.73	%+		1.75	%+*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.78	%+		1.77	%+^^		1.72	%+		N/A
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.06	%+		0.73	%+		1.70	%+		3.33	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§*
Portfolio Turnover Rate		25	%		24	%		22	%		21	%*
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.79	%		N/A			1.91	%+*
Net Investment Income to Average Net Assets		N/A			0.72	%		N/A			3.17	%+*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.75% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

U.S. Real Estate Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	16.55		$	17.13
Income from Investment Operations:
Net Investment Income†		0.38			0.03
Net Realized and Unrealized Gain		4.65			0.01
Total from Investment Operations		5.03			0.04
Distributions from and/or in Excess of:
Net Investment Income		(0.36	)		(0.11	)
Net Realized Gain		(0.74	)		(0.51	)
Total Distributions		(1.10	)		(0.62	)
Net Asset Value, End of Period	$	20.48		$	16.55
Total Return++		30.82	%		0.30	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	12		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.89	%+		0.90	%*^^
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		0.88	%+		0.89	%*^^
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.96	%+		0.52	%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		N/A
Portfolio Turnover Rate		25	%		24	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		20.21	%		6.19	%*
Net Investment Loss to Average Net Assets		(17.36	)%		(4.77	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.93% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the U.S. Real Estate Portfolio. The Portfolio seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs"). The Portfolio focuses on REITs as well as real estate operating companies ("REOCs") that invest in a variety of property types and regions. The Portfolio has capital subscription commitments to certain investee companies for this same purpose, the details of which are disclosed in the Unfunded Commitments note. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

The Portfolio invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Portfolio.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Apartments	$	188,450	$	—	$	—	$	188,450
Diversified		77,320		—		—		77,320
Health Care		82,397		—		—		82,397
Industrial		25,289		—		31,180		56,469
Lodging/Resorts		138,470		—		—		138,470
Manufactured Homes		14,586		—		—		14,586
Mixed Industrial/Office		14,456		—		—		14,456
Office		104,839		—		6,044		110,883
Regional Malls		203,435		—		—		203,435
Retail Free Standing		25,107		—		—		25,107
Self Storage		57,435		—		—		57,435
Shopping Centers		82,556		—		—		82,556
Total Common Stocks		1,014,340		—		37,224		1,051,564
Short-Term Investment
Investment Company		9,090		—		—		9,090
Total Assets	$	1,023,430	$	—	$	37,224	$	1,060,654

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, the Portfolio did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stocks (000)
Beginning Balance	$	36,160
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		(3,712	)
Change in unrealized appreciation (depreciation)		4,776
Realized gains (losses)		—
Ending Balance	$	37,224
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	4,776

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of December 31, 2014.

Fair Value at
December 31,
2014
(000)

Valuation
Technique

Unobservable
Input

Industrial

Common
Stocks

31,180

Reported Capital Balance,
Adjusted for Subsequent
Capital Calls, Return of
Capital and significant
market changes
between last capital
statement and valuation
date, as applicable

Adjusted Capital
Balance

Office

Common
Stocks

6,044

Reported Capital Balance,
Adjusted for Subsequent
Capital Calls, Return of
Capital and significant
market changes
between last capital
statement and valuation
date, as applicable

Adjusted Capital
Balance

3. Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are

maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

4. Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Portfolio and BRCP REIT I, LLC, the Portfolio has made a subscription commitment of $7,000,000 for which it will receive 7,000,000 shares of common stock. As of December 31, 2014, BRCP REIT I, LLC has drawn down approximately $6,101,000 which represents 87.2% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and BRCP REIT II, LLC, the Portfolio has made a subscription commitment of $9,000,000 for which it will receive 9,000,000 shares of common stock. As of December 31, 2014, BRCP REIT II, LLC has drawn down approximately $8,364,000 which represents 92.9% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and Exeter Industrial Value Fund LP, the Portfolio has made a subscription commitment of $8,500,000 for which it will receive 8,500,000 shares of common stock. As of December 31, 2014, Exeter Industrial Value Fund LP has drawn down approximately $7,905,000 which represents 93.0% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and Keystone Industrial Fund, LP, the Portfolio has made a subscription commitment of $7,946,000 for which it will receive 7,946,000 shares of common stock. As of December 31, 2014, Keystone

Industrial Fund, LP has drawn down approximately $7,574,000 which represents 95.3% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and KTR Industrial Fund II LP, the Portfolio has made a subscription commitment of $10,000,000 for which it will receive 10,000,000 shares of common stock. As of December 31, 2014, KTR Industrial Fund II LP has drawn down approximately $9,196,000 which represents 92.0% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and Cabot Industrial Value Fund II, LP, the Portfolio has made a subscription commitment of $7,500,000 for which it will receive 15,000 shares of common stock. As of December 31, 2014, Cabot Industrial Value Fund II, LP has drawn down approximately $7,000,000 which represents 93.3% of the commitment.

5. Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

6. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

8. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Portfolio owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

First $500 million				Next $500 million				Over $1 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.77% of the Portfolio's average daily net assets.

shares, 1.85% for Class L shares and 0.93% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $247,630,000 and $325,775,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $7,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	6,203			$	129,798			$	126,911			$	2			$	9,090

The Portfolio has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Portfolio.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	17,600	$	37,672	$	19,641	$	23,617

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Permanent differences, primarily due to basis adjustments on partnerships, differing treatments of gains (losses) related to REIT adjustments, a dividend redesignation and equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	(133	)		$	(409	)		$	542

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	229			$	23,192

At December 31, 2014, the aggregate cost for federal income tax purposes is approximately $709,738,000. The aggregate gross unrealized appreciation is approximately $358,944,000 and the aggregate gross unrealized depreciation is approximately $8,028,000 resulting in net unrealized appreciation of approximately $350,916,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 63% and 51%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
U.S. Real Estate Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of U.S. Real Estate Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of U.S. Real Estate Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 6.3% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $37,672,000 as a long-term capital gain distribution.

For Federal income tax purposes, the following information is furnished with respect to the Portfolio's earnings for the taxable year ended December 31, 2014. When distributed, certain earnings may be subject to a maximum tax rate of 15% as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Portfolio designated up to a maximum of approximately $1,171,000 as taxable at this lower rate.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIUSREANN
1112332 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Small Cap Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					17
Report of Independent Registered Public Accounting Firm					24
Federal Tax Notice					25
U.S. Privacy Policy					26
Director and Officer Information					29

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in International Small Cap Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

International Small Cap Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Small Cap Portfolio Class I	$	1,000.00	$	850.20	$	1,019.56	$	5.22	$	5.70		1.12	%
International Small Cap Portfolio Class A		1,000.00		848.60		1,018.10		6.57		7.17		1.41
International Small Cap Portfolio Class L		1,000.00		846.00		1,015.12		9.31		10.16		2.00

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

International Small Cap Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily in equity securities of small non-U.S. companies.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -9.75%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the MSCI All Country World ex USA Small Cap Index (the "Index"), which returned -4.03%. The Portfolio's primary benchmark was changed in May 2014 from the MSCI EAFE Small Cap Total Return Index to the MSCI All Country World ex USA Small Cap Index.

Factors Affecting Performance

• International small-cap stocks, as measured by the Index, fell 4.03% during the period, underperforming the broad international equity market, down 3.87%, as measured by the MSCI All Country World ex USA Index. Global equity market performance during the period was essentially divided between the U.S., which performed well, and non-U.S., which struggled. Strong economic growth in the U.S., further reduction in the unemployment rate, the gradual winding down of the U.S. Federal Reserve's (Fed) stimulus program as expected, generally healthy corporate earnings and low inflation bolstered investor optimism for U.S. stocks.

• In contrast, growth in Europe and Japan languished. Investors' hopes for another round of quantitative easing (QE) stimulus from the Bank of Japan and a QE plan from the European Central Bank were realized later than expected in Japan and not at all in Europe. These macro economic concerns and policy debates contributed to volatility in European and Japanese markets during the period.

• Emerging markets also struggled with negative investor sentiment and deteriorating outlooks. While some individual economies and markets were bright spots during the period, emerging markets asset classes were challenged by moderating growth in China, falling commodity prices, a stronger

U.S. dollar and uncertainties about potentially rising U.S. interest rates.

• In addition to concerns about weakening global growth, rising geopolitical risk contributed to turbulence across global equity markets, with the Russia-Ukraine clash quickly escalating to a crisis and the Islamic State terrorist group seizing territory in the Middle East. Later in the year, an unexpectedly sharp decline in oil prices destabilized markets, as energy-exporting economies and energy companies are likely to suffer, while consumers in importing countries may see their disposable incomes boosted.

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• The Portfolio's financials sector lagged the most, due to weak stock selection. A holding in a Brazilian real estate developer was the overall Portfolio's largest detractor from performance during the period.

• Stock selection in the consumer staples sector hampered relative returns, driven by weak performance from a position in a Japanese hair care products and services brand.

• Stock selection in the industrials sector was detrimental. A position in a port logistics services company in Brazil was the Portfolio's leading detractor in the sector.

• The Portfolio's underweight position in the energy sector was beneficial to relative performance, as the sector declined 33% in the Index during the period. Stock selection in the energy sector also added modestly to performance.

• Stock selection in the information technology sector was advantageous to relative performance. The Portfolio's top contributors in the sector were a U.K.-based online take-out restaurant portal and an Australian software developer for the provision of automotive parts and services.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Small Cap Portfolio

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to seek established and emerging franchise companies on an international basis, with capitalizations within the range of companies included in the MSCI All Country World ex-USA Small Cap Index. We emphasize a bottom-up stock selection process, seeking attractive investments on an individual company basis. We look for franchises that we believe have sustainable competitive advantages, which may include characteristics such as strong cash generation, attractive returns on capital, hard-to-replicate assets and a favorable risk/reward.

* Minimum Investment for Class I shares

Performance Compared to the MSCI EAFE Small Cap Total Return Index/MSCI All Country World ex USA Small Cap Index⁽¹⁾, the MSCI EAFE Small Cap Total Return Index and the Lipper International Small/Mid-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁷⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–9.75	%		3.34	%		1.95	%		8.20	%
MSCI EAFE Small Cap Total Return Index/MSCI All Country World ex USA Small Cap Index		–4.03			6.80			6.21			6.18
MSCI EAFE Small Cap Total Return Index		–4.95			8.63			6.04			6.10
Lipper International Small/Mid-Cap Growth Funds Index		–5.65			9.56			8.28			N/A
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		–10.04			3.06			—			6.78
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–14.76			1.96			—			5.86
MSCI EAFE Small Cap Total Return Index/MSCI All Country World ex USA Small Cap Index		–4.03			6.80			—			14.61
MSCI EAFE Small Cap Total Return Index		–4.95			8.63			—			12.94
Lipper International Small/Mid-Cap Growth Funds Index		–5.65			9.56			—			14.90
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		–10.56			—			—			2.78
MSCI EAFE Small Cap Total Return Index/MSCI All Country World ex USA Small Cap Index		–4.03			—			—			7.17
MSCI EAFE Small Cap Total Return Index		–4.95			—			—			10.04
Lipper International Small/Mid-Cap Growth Funds Index		–5.65			—			—			9.99

⁽¹⁾ The MSCI EAFE Small Cap Total Return Index/MSCI All Country World ex USA Small Cap Index is a custom index represented by the performance of the MSCI EAFE Small Cap Total Return Index for periods from the Portfolio's inception to May 31, 2007 and the performance of the MSCI All Country World ex USA Small Cap Index for periods thereafter. The Portfolio's primary benchmark was changed in May 2014 from the MSCI EAFE Small Cap Total Return Index to the MSCI All Country World ex USA Small Cap Index because the Adviser believes the MSCI All

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Small Cap Portfolio

Country World ex USA Small Cap Index is a more appropriate benchmark for the Portfolio. It is not possible to invest directly in an index.

The MSCI EAFE Small Cap Total Return Index is an equity index which captures small cap representation across Developed Markets countries around the world, excluding the US and Canada. Returns for this index are calculated using net returns for periods beginning January 2001. Returns prior to January 2001 do not include distributions as this information was not available. The Index is unmanaged and its returns do not include any sales charges or fees. Such cost would lower performance. It is not possible to invest directly in an index.

The MSCI All Country World Index (ACWI) ex USA Small Cap Index captures small cap representation across 22 of 23 Developed Markets (DM) countries (excluding the U.S.) and 23 Emerging Markets (EM) countries. The MSCI ACWI ex USA Small Cap Index was launched on June 01, 2007. The Index is unmanaged and its returns do not include any sales charges or fees. Such cost would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper International Small/Mid-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Small/Mid-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio was in the Lipper International Small/Mid-Cap Growth Funds classification.

⁽⁴⁾ Commenced operations on December 15, 1992.

⁽⁵⁾ Commenced offering on October 21, 2008.

⁽⁶⁾ Commenced offering on April 27, 2012.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

International Small Cap Portfolio

	Shares		Value (000)
Common Stocks (80.4%)
Brazil (4.4%)
Fleury SA		145,777	$	892
Ouro Fino Saude Animal Participacoes SA (a)		79,241		908
Prumo Logistica SA (a)		2,852,293		461
Tegma Gestao Logistica		177,969		1,054
				3,315
Canada (6.4%)
Big Rock Brewery, Inc.		50,075		554
Corby Spirit and Wine Ltd.		101,106		2,000
Flyht Aerospace Solutions Ltd. (a)		1,205,944		384
Second Cup Ltd. (The)		721,896		1,883
				4,821
China (1.2%)
Jumei International Holding Ltd. ADR (a)		68,275		930
Denmark (0.3%)
Bang & Olufsen A/S (a)(b)		42,991		252
France (14.5%)
Eurazeo SA		117,950		8,239
Faiveley Transport SA		23,303		1,350
Laurent-Perrier		9,660		773
Paris Orleans SA		28,057		604
				10,966
Germany (1.6%)
Draegerwerk AG & Co., KGaA (Preference)		11,942		1,212
Greece (3.5%)
Motor Oil Hellas Corinth Refineries SA		156,599		1,233
Titan Cement Co., SA (Preference)		136,039		1,414
				2,647
Hong Kong (6.7%)
China High Precision Automation Group Ltd. (a)(c)(d)		3,968,000		51
L'Occitane International SA		1,907,250		4,800
Louis XIII Holdings Ltd. (a)		546,350		236
				5,087
Ireland (2.9%)
C&C Group PLC		325,253		1,424
Mincon Group PLC		999,687		732
				2,156
Italy (9.7%)
Autogrill SpA (a)		186,107		1,394
Brunello Cucinelli SpA (b)		79,418		1,781
Moncler SpA		111,486		1,492
Tamburi Investment Partners SpA		831,905		2,641
				7,308
Japan (2.4%)
MISUMI Group, Inc.		56,200		1,846
New Zealand (0.7%)
Kathmandu Holdings Ltd.		299,032		503

	Shares		Value (000)
Nigeria (2.0%)
Guinness Nigeria PLC		1,639,320	$	1,506
Peru (1.2%)
Cementos Pacasmayo SAA ADR (b)		105,082		916
Singapore (4.6%)
Mandarin Oriental International Ltd.		2,056,000		3,441
Spain (1.8%)
Baron de Ley (a)		15,000		1,361
Sweden (3.5%)
Byggmax Group AB		219,714		1,478
Mekonomen AB		45,400		1,184
				2,662
United Arab Emirates (2.6%)
Aramex PJSC		2,313,391		1,942
United Kingdom (7.1%)
Anglo-Eastern Plantations		24,252		209
Just Eat PLC (a)		731,588		3,482
Manchester United PLC, Class A (a)		50,800		808
Pets at Home Group PLC		239,271		749
Poundland Group PLC (a)		27,035		138
				5,386
United States (3.3%)
Fox Factory Holding Corp. (a)		152,131		2,469
Total Common Stocks (Cost $69,400)				60,726
Short-Term Investments (17.2%)
Securities held as Collateral on Loaned Securities (1.5%)
Investment Company (1.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		1,024,875		1,025
	Face Amount (000)
Repurchase Agreement (0.1%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $98; fully collateralized by various U.S. Government obligations; 2.13% — 4.25% due 1/31/21 — 11/15/40; valued at $100)	$	98		98
Total Securities held as Collateral on Loaned Securities (Cost $1,123)				1,123
	Shares
Investment Company (15.7%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $11,861)		11,860,834		11,861
Total Short-Term Investments (Cost $12,984)				12,984
Total Investments (97.6%) (Cost $82,384) Including $1,163 of Securities Loaned (e)				73,710
Other Assets in Excess of Liabilities (2.4%)				1,791
Net Assets (100.0%)			$	75,501

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

International Small Cap Portfolio

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2014.

(d) At December 31, 2014, the Portfolio held a fair valued security valued at approximately $51,000, representing 0.1% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(e) The approximate fair value and percentage of net assets, $48,493,000 and 64.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

PJSC Public Joint Stock Company.

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		40.5	%
Short-Term Investment		16.3
Specialty Retail		12.0
Diversified Financial Services		11.4
Beverages		10.5
Hotels, Restaurants & Leisure		9.3
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Small Cap Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $69,498)	$	60,824
Investment in Security of Affiliated Issuer, at Value (Cost $12,886)		12,886
Total Investments in Securities, at Value (Cost $82,384)		73,710
Foreign Currency, at Value (Cost $13)		13
Cash		103
Receivable for Investments Sold		3,131
Dividends Receivable		62
Tax Reclaim Receivable		5
Receivable from Affiliate		1
Receivable for Portfolio Shares Sold		—	@
Other Assets		26
Total Assets		77,051
Liabilities:
Collateral on Securities Loaned, at Value		1,226
Payable for Advisory Fees		193
Payable for Professional Fees		48
Payable for Investments Purchased		22
Payable for Directors' Fees and Expenses		19
Payable for Custodian Fees		10
Payable for Administration Fees		5
Payable for Sub Transfer Agency Fees — Class I		4
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Portfolio Shares Redeemed		—	@
Other Liabilities		20
Total Liabilities		1,550
Net Assets	$	75,501
Net Assets Consist Of:
Paid-in-Capital	$	194,679
Distributions in Excess of Net Investment Income		(990	)
Accumulated Net Realized Loss		(109,510	)
Unrealized Appreciation (Depreciation) on:
Investments		(8,674	)
Foreign Currency Translations		(4	)
Net Assets	$	75,501

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Small Cap Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	75,215
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		6,104,648
Net Asset Value, Offering and Redemption Price Per Share	$	12.32
CLASS A:
Net Assets	$	119
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		9,029
Net Asset Value, Redemption Price Per Share	$	13.22
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.73
Maximum Offering Price Per Share	$	13.95
CLASS L:
Net Assets	$	167
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		13,689
Net Asset Value, Offering and Redemption Price Per Share	$	12.15
⁽¹⁾ Including: Securities on Loan, at Value:	$	1,163

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Small Cap Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $169 of Foreign Taxes Withheld)	$	1,763
Income from Securities Loaned — Net		71
Dividends from Security of Affiliated Issuer (Note G)		1
Interest from Securities of Unaffiliated Issuers		—	@
Total Investment Income		1,835
Expenses:
Advisory Fees (Note B)		819
Professional Fees		120
Administration Fees (Note C)		69
Custodian Fees (Note F)		65
Registration Fees		33
Shareholder Reporting Fees		12
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Pricing Fees		7
Directors' Fees and Expenses		3
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class L (Note D)		1
Sub Transfer Agency Fees		(22	)#
Sub Transfer Agency Fees — Class I		(17	)#
Sub Transfer Agency Fees — Class A		(2	)#
Sub Transfer Agency Fees — Class L		—	@
Other Expenses		16
Total Expenses		1,113
Waiver of Advisory Fees (Note B)		(133	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Net Expenses		976
Net Investment Income		859
Realized Gain (Loss):
Investments Sold		4,732
Foreign Currency Transactions		(27	)
Net Realized Gain		4,705
Change in Unrealized Appreciation (Depreciation):
Investments		(13,746	)
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(13,746	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(9,041	)
Net Decrease in Net Assets Resulting from Operations	$	(8,182	)

@ Amount is less than $500.

# Over accrual of sub transfer agency expenses in prior year.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Small Cap Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	859		$	2,335
Net Realized Gain		4,705			16,789
Net Change in Unrealized Appreciation (Depreciation)		(13,746	)		2,873
Net Increase (Decrease) in Net Assets Resulting from Operations		(8,182	)		21,997
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(2,009	)		(7,185	)
*Class A:**
Net Investment Income		(2	)		(2	)
*Class H:**
Net Investment Income		—			(1	)**
Class L:
Net Investment Income		(2	)		(4	)
Total Distributions		(2,013	)		(7,192	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		342			486
Distributions Reinvested		627			2,292
Redeemed		(3,130	)		(52,364	)
*Class A:**
Subscribed		99			96
Distributions Reinvested		2			2
Conversion from Class H		—			10
Redeemed		(54	)		(1,122	)
*Class H:**
Subscribed		—			100	**
Conversion to Class A		—			(10	)**
Redeemed		—			(103	)**
Class L:
Subscribed		58			100
Distributions Reinvested		2			3
Net Decrease in Net Assets Resulting from Capital Share Transactions		(2,054	)		(50,510	)
Total Decrease in Net Assets		(12,249	)		(35,705	)
Net Assets:
Beginning of Period		87,750			123,455
End of Period (Including Distributions in Excess of Net Investment Income of $(990) and $(646))	$	75,501		$	87,750

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Small Cap Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		24			37
Shares Issued on Distributions Reinvested		47			183
Shares Redeemed		(228	)		(4,022	)
Net Decrease in Class I Shares Outstanding		(157	)		(3,802	)
*Class A:**
Shares Subscribed		7			6
Shares Issued on Distributions Reinvested		—	@@		—	@@
Conversion from Class H		—			1
Shares Redeemed		(4	)		(85	)
Net Increase (Decrease) in Class A Shares Outstanding		3			(78	)
*Class H:**
Shares Subscribed		—			8	**
Conversion to Class A		—			(1	)**
Shares Redeemed		—			(8	)**
Net Decrease in Class H Shares Outstanding		—			(1	)
Class L:
Shares Subscribed		4			8
Shares Issued on Distributions Reinvested		—	@@		—	@@
Net Increase in Class L Shares Outstanding		4			8

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Small Cap Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.98		$	12.16		$	11.27		$	13.80		$	11.97
Income (Loss) from Investment Operations:
Net Investment Income†		0.14			0.32			0.24			0.18			0.11
Net Realized and Unrealized Gain (Loss)		(1.47	)		2.65			0.86			(2.71	)		1.76
Total from Investment Operations		(1.33	)		2.97			1.10			(2.53	)		1.87
Distributions from and/or in Excess of:
Net Investment Income		(0.33	)		(1.15	)		(0.21	)		—			(0.04	)
Redemption Fees		—			—			0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	12.32		$	13.98		$	12.16		$	11.27		$	13.80
Total Return++		(9.75	)%		25.75	%		9.90	%		(18.33	)%		15.72	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	75,215		$	87,532		$	122,402		$	213,983		$	320,362
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.13	%+		1.15	%+		1.15	%+		1.15	%+		1.15	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.15	%+		N/A			1.15	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.00	%+		2.46	%+		1.97	%+		1.33	%+		0.87	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		28	%		33	%		114	%		64	%		66	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.28	%		1.39	%		1.28	%		1.19	%		1.18	%+
Net Investment Income to Average Net Assets		0.85	%		2.22	%		1.84	%		1.29	%		0.84	%+

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Small Cap Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	14.99		$	12.28		$	11.19		$	13.74		$	11.95
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.10			(0.02	)		0.25			0.14			0.07
Net Realized and Unrealized Gain (Loss)		(1.58	)		3.12			0.84			(2.69	)		1.76
Total from Investment Operations		(1.48	)		3.10			1.09			(2.55	)		1.83
Distributions from and/or in Excess of:
Net Investment Income		(0.29	)		(0.39	)		—			—			(0.04	)
Redemption Fees		—			—			0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	13.22		$	14.99		$	12.28		$	11.19		$	13.74
Total Return++		(10.04	)%		25.32	%		9.74	%		(18.56	)%		15.41	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	119		$	90		$	1,034		$	82,170		$	101,074
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.45	%+		1.41	%+^^		1.40	%+		1.40	%+**		1.40	%+**
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.40	%+		N/A			1.40	%+**
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.68	%+		(0.14	)%+		2.05	%+		1.08	%+		0.62	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		28	%		33	%		114	%		64	%		66	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.60	%		3.69	%		1.47	%		1.44	%		1.43	%+
Net Investment Income (Loss) to Average Net Assets		0.53	%		(2.42	)%		1.98	%		1.04	%		0.59	%+

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.50% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.40% for Class A shares.

** Ratios of Expenses to Average Net Assets for Class A may vary by more than the shareholder servicing fees due to fluctuations in daily net asset amounts.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Small Cap Portfolio

	Class L
	Year Ended December 31,						Period from April 27, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	13.81		$	12.02		$	12.69
Income (Loss) from Investment Operations:
Net Investment Income†		0.02			0.29			0.10
Net Realized and Unrealized Gain (Loss)		(1.45	)		2.54			(0.56	)
Total from Investment Operations		(1.43	)		2.83			(0.46	)
Distributions from and/or in Excess of:
Net Investment Income		(0.23	)		(1.04	)		(0.21	)
Net Asset Value, End of Period	$	12.15		$	13.81		$	12.02
Total Return++		(10.56	)%		24.72	%		(3.50	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	167		$	128		$	9
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.00	%+		1.96	%+^^		1.90	%+*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.89	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.13	%+		2.23	%+		1.36	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		28	%		33	%		114	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.28	%		2.73	%		2.13	%*
Net Investment Income (Loss) to Average Net Assets		(1.15	)%		1.46	%		1.13	%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.90% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the International Small Cap Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in equity securities of small non-U.S. companies. The Portfolio offers three classes of shares — Class I, Class A and Class L. The Portfolio suspended the offering of its shares to new investors at the close of business on December 15, 2014.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which

valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	384	$	—	$	—	$	384
Air Freight & Logistics		—		1,942		—		1,942
Auto Components		2,469		—		—		2,469
Beverages		4,060		3,558		—		7,618
Capital Markets		—		3,245		—		3,245
Construction & Engineering		—		236		—		236
Construction Materials		916		1,414		—		2,330
Diversified Financial Services		—		8,239		—		8,239
Electronic Equipment, Instruments & Components		—		—		51		51
Food Products		—		209		—		209
Health Care Equipment & Supplies		—		1,212		—		1,212
Health Care Providers & Services		—		892		—		892
Hotels, Restaurants & Leisure		1,883		4,835		—		6,718
Household Durables		—		252		—		252
Internet & Catalog Retail		930		—		—		930
Internet Software & Services		—		3,482		—		3,482
Machinery		732		1,350		—		2,082
Media		808		—		—		808
Multi-line Retail		—		138		—		138
Oil, Gas & Consumable Fuels		—		1,233		—		1,233
Pharmaceuticals		—		908		—		908
Road & Rail		—		1,054		—		1,054
Specialty Retail		—		8,714		—		8,714
Textiles, Apparel & Luxury Goods		—		3,273		—		3,273
Trading Companies & Distributors		—		1,846		—		1,846
Transportation Infrastructure		—		461		—		461
Total Common Stocks		12,182		48,493		51		60,726

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Short-Term Investments
Investment Company	$	12,886	$	—	$	—	$	12,886
Repurchase Agreement		—		98		—		98
Total Short-Term Investments		12,886		98		—		12,984
Total Assets	$	25,068	$	48,591	$	51	$	73,710

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $38,318,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets

on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)
Beginning Balance	$	141
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(90	)
Realized gains (losses)		—
Ending Balance	$	51
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	(90	)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of December 31, 2014. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance.

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Electronic Equipment, Instruments & Components
Common Stock	$	51	Asset Approach	Net Tangible Assets	$	0.31		$	0.31		$	0.31		Increase
				Discount for Lack of Marketability		40.0	%		40.0	%		40.0	%	Decrease
				Discount for Company Size vs. Index		25.0	%		25.0	%		25.0	%	Decrease
			Market Approach	Price/Earnings		9.6	x		9.6	x		9.6	x	Increase
				Discount for Lack of Marketability		40.0	%		40.0	%		40.0	%	Decrease
				Discount for Company Size vs. Index		25.0	%		25.0	%		25.0	%	Decrease
			Income Approach	Cost of Equity		22.0	%		22.0	%		22.0	%	Decrease
				Discount for Lack of Marketability		40.0	%		40.0	%		40.0	%	Decrease
				Discount for Company Size vs. Index		25.0	%		25.0	%		25.0	%	Decrease

transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	1,163	(a)	$	—	$	(1,163	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Portfolio received cash collateral of approximately $1,226,000, of which approximately $1,123,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $103,000, which is not reflected in the Portfolio of Investments.

semiannually. Net realized capital gains, if any, are distributed at least annually.

9. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1.5 billion				Over $1.5 billion
	0.95	%			0.90	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.79% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.15% for Class I shares, 1.50% for Class A shares and 2.00% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $133,000 of advisory fees were waived and approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $23,513,000 and $40,917,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $2,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	663			$	32,256			$	20,033			$	1			$	12,886

The Portfolio may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	2,013	$	—	$	7,192	$	—

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	810			$	(810	)		$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	66			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $83,455,000. The aggregate gross unrealized appreciation is approximately $7,755,000 and the aggregate gross unrealized depreciation is approximately $17,500,000 resulting in net unrealized depreciation of approximately $9,745,000.

At December 31, 2014, the Portfolio had available unused long-term capital losses of approximately $43,188,000 that do not have an expiration date.

In addition, at December 31, 2014, the Portfolio had available capital loss carryforwards to offset future net capital gains, to the extent provided by regulations, of approximately $66,323,000 which will expire on December 31, 2017.

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by a Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2014, the Portfolio utilized capital loss carryforwards for U.S. Federal income tax purposes of approximately $3,846,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 82%, 49% and 62%, for Class I, Class A and Class L shares, respectively.

J. Subsequent Event: The Board of Directors of the Fund approved a Plan of Liquidation with respect to the Portfolio. Pursuant to the Plan of Liquidation, substantially all of the asset of the Portfolio will be liquidated, known liabilities of the Portfolio will be satisfied, the remaining proceeds will be distributed to the Portfolio's stockholders, and all of the issued and outstanding shares of the Portfolio will be redeemed (the "Liquidation"). The Liquidation is expected to occur on or about January 30, 2015.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Small Cap Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of International Small Cap Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Small Cap Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

The Portfolio intends to pass through foreign tax credits of approximately $168,000 and has derived net income from sources within foreign countries amounting to approximately $1,966,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIISCANN
1111584 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Small Company Growth Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					30
Federal Tax Notice					31
U.S. Privacy Policy					32
Director and Officer Information					35

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Small Company Growth Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Small Company Growth Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Small Company Growth Portfolio Class I	$	1,000.00	$	1,008.80	$	1,019.91	$	5.32	$	5.35		1.05	%
Small Company Growth Portfolio Class A		1,000.00		1,006.60		1,018.05		7.18		7.22		1.42
Small Company Growth Portfolio Class L		1,000.00		1,004.20		1,015.63		9.60		9.65		1.90
Small Company Growth Portfolio Class IS		1,000.00		1,008.80		1,020.27		4.96		4.99		0.98

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Small Company Growth Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small capitalization companies.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -9.68%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the Russell 2000® Growth Index (the "Index"), which returned 5.60%.

Factors Affecting Performance

• U.S. stocks enjoyed strong performance in the year ended December 31, 2014, driven higher primarily by investor optimism about the economy. The market did encounter periodic spikes in volatility in response to a variety of factors. Some were economic concerns, from the weather-related contraction in U.S. growth in the first quarter of 2014, to moderating growth in China, stagnation in Europe, and recession in Japan. Geopolitical uncertainties also disrupted the market, including the Russia-Ukraine crisis, the rise of terrorist group the Islamic State, and the Ebola outbreak. Nevertheless, following the downturns, the broad market rebounded to new highs.

• Small-cap growth stocks rose modestly in the reporting period, up 5.60% as measured by the Index. Within the Index, sector performance varied widely, with consumer staples and health care each posting double-digit gains, while energy fell by double-digits. While the investment climate during the year was generally favorable for equities, small-caps faced some specific headwinds. Most notably, after performing strongly in 2013, the small-cap segment had become relatively expensive — and therefore less attractive to many investors — compared to mid- and large-cap stocks.

• A widespread sell-off in high growth and high valuation multiple stocks in March and April also affected the small-cap market. Generally, we believe the sell-off was not due to company-specific fundamentals but rather driven by a broad rotation out of such names. Although the share prices of some of our portfolio's holdings took a hit during this downturn, these companies' fundamentals remained largely robust. Overall, we used the

sell-off as an opportunity to trade up the Portfolio in quality, and we remain optimistic about the long-term outlook for the companies owned.

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• Stock selection in the information technology (IT) sector was, by far, the largest detractor. The Portfolio's largest detractor was a position in a global microblogging platform that saw its share price tumble after disappointing analysts' very high expectations. We are monitoring the company's situation and continue to believe in its long-term prospects.

• Stock selection in the consumer discretionary sector was another main detractor. A sub sandwich restaurant chain was the most detrimental holding in the sector, as the stock declined due to disappointing results. The company was not executing as well as we had hoped; we sold out of it in July.

• The Portfolio's significant underweight position in energy, the worst-performing sector during the period, benefited relative performance. The Portfolio held only two energy stocks, one of which was eliminated during the period.

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to look for high-quality growth companies that we believe have these attributes: sustainable competitive advantages, above-average business visibility, rising return on invested capital, strong free cash flow generation and a favorable risk/reward. We find these companies through intense fundamental research. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

• The long-term investment horizon and conviction-weighted investment approach embraced by the team since 1998 can result in periods of performance deviation from the benchmark and peers, as was the case during this reporting period. Our team continues to focus on bottom-up stock selection and the long-term outlook for companies owned in the Portfolio; accordingly, we have had

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Small Company Growth Portfolio

very little turnover in the Portfolio to date, as our ongoing work reaffirms our assessment of quality and competitive advantage in the names we own.

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the Russell 2000^® Growth Index⁽¹⁾ and the Lipper Small-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–9.68	%		14.68	%		8.37	%		11.46	%
Russell 2000^® Growth Index		5.60			16.80			8.54			7.95
Lipper Small-Cap Growth Funds Index		1.98			15.02			7.38			9.41
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		–9.98			14.37			8.09			10.57
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–14.69			13.15			7.50			10.25
Russell 2000^® Growth Index		5.60			16.80			8.54			6.72
Lipper Small-Cap Growth Funds Index		1.98			15.02			7.38			7.59
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		–10.43			—			—			16.53
Russell 2000^® Growth Index		5.60			—			—			18.70
Lipper Small-Cap Growth Funds Index		1.98			—			—			16.73
Portfolio — Class IS Shares w/o sales charges⁽⁷⁾		–9.63			—			—			4.04
Russell 2000^® Growth Index		5.60			—			—			12.53
Lipper Small-Cap Growth Funds Index		1.98			—			—			9.02

⁽¹⁾ The Russell 2000^® Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000^® Index is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market capitalization and current index membership. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Small-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Small-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Small-Cap Growth Funds classification.

⁽⁴⁾ Commenced operations on November 1, 1989.

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on November 11, 2011.

⁽⁷⁾ Commenced offering on September 13, 2013.

⁽⁸⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date or initial offering of the respective share class of the Portfolio, not the inception of the Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Small Company Growth Portfolio

	Shares		Value (000)
Common Stocks (93.3%)
Air Freight & Logistics (3.2%)
XPO Logistics, Inc. (a)		1,591,251	$	65,050
Biotechnology (3.1%)
ACADIA Pharmaceuticals, Inc. (a)		183,475		5,825
Agios Pharmaceuticals, Inc. (a)(b)		138,322		15,498
Alnylam Pharmaceuticals, Inc. (a)		104,292		10,116
Clovis Oncology, Inc. (a)(b)		99,233		5,557
Intrexon Corp. (a)(b)		404,830		11,145
Ironwood Pharmaceuticals, Inc. (a)		958,862		14,690
				62,831
Capital Markets (7.9%)
Capitol Acquisition Corp. II (Units) (a)(c)		744,328		7,507
Financial Engines, Inc.		1,221,120		44,632
Greenhill & Co., Inc.		822,040		35,841
WisdomTree Investments, Inc.		4,546,162		71,261
				159,241
Chemicals (0.9%)
Platform Specialty Products Corp. (a)		814,450		18,912
Construction Materials (1.0%)
Eagle Materials, Inc.		263,037		19,999
Electric Utilities (0.0%)
AET&D Holdings No. 1 Ltd. (Australia) (a)(d)(e)		6,682,555		—
Electronic Equipment, Instruments & Components (1.5%)
Cognex Corp. (a)		236,877		9,790
FARO Technologies, Inc. (a)		180,981		11,344
Universal Display Corp. (a)(b)		347,944		9,655
				30,789
Energy Equipment & Services (0.4%)
US Silica Holdings, Inc. (b)		300,946		7,731
Health Care Equipment & Supplies (0.3%)
Sientra, Inc. (a)		348,837		5,857
Health Care Providers & Services (1.3%)
HealthEquity, Inc. (a)		1,020,385		25,969
Health Care Technology (11.8%)
athenahealth, Inc. (a)		608,841		88,708
Castlight Health, Inc., Class B (a)(b)		2,689,578		31,468
HMS Holdings Corp. (a)		1,663,577		35,168
Medidata Solutions, Inc. (a)		1,344,951		64,221
Veeva Systems, Inc., Class A (a)		688,399		18,181
				237,746
Hotels, Restaurants & Leisure (6.3%)
Fiesta Restaurant Group, Inc. (a)		1,025,511		62,351
Habit Restaurants, Inc. (The) (a)(b)		248,503		8,039
Krispy Kreme Doughnuts, Inc. (a)		1,487,809		29,369
Zoe's Kitchen, Inc. (a)(b)		905,098		27,072
				126,831
Household Durables (0.5%)
iRobot Corp. (a)(b)		279,376		9,700

	Shares		Value (000)
Internet & Catalog Retail (8.0%)
Blue Nile, Inc. (a)		1,082,515	$	38,981
Coupons.com, Inc. (a)(b)		1,187,516		21,079
Groupon, Inc. (a)		1,642,098		13,564
Jumei International Holding Ltd. ADR (China) (a)(b)		926,672		12,621
MakeMyTrip Ltd. (India) (a)		928,795		24,139
Ocado Group PLC (United Kingdom) (a)		4,817,075		29,569
Qunar Cayman Islands Ltd. ADR (China) (a)(b)		364,259		10,356
Wayfair, Inc., Class A (a)(b)		583,151		11,576
				161,885
Internet Software & Services (20.0%)
Actua Corp. (a)		546,548		10,095
Angie's List, Inc. (a)(b)		1,438,218		8,960
Autohome, Inc. ADR (China) (a)		625,775		22,753
Benefitfocus, Inc. (a)(b)		928,626		30,496
Criteo SA ADR (France) (a)		1,778,972		71,906
Dealertrack Technologies, Inc. (a)		1,239,740		54,933
Everyday Health, Inc. (a)		802,645		11,839
GrubHub, Inc. (a)(b)		1,531,000		55,606
Just Eat PLC (United Kingdom) (a)		4,044,463		19,252
Marketo, Inc. (a)		376,904		12,332
New Relic, Inc. (a)		98,610		3,436
OPOWER, Inc. (a)(b)		895,789		12,747
Twitter, Inc. (a)		1,794,657		64,374
Youku Tudou, Inc. ADR (China) (a)		668,634		11,908
Zillow, Inc., Class A (a)(b)		113,411		12,009
				402,646
Media (0.6%)
Legend Pictures LLC Ltd. (a)(d)(e)(f) (acquisition cost — $5,829; acquired 3/8/12)		5,452		11,405
Pharmaceuticals (1.0%)
Impax Laboratories, Inc. (a)		651,489		20,639
Professional Services (8.0%)
Advisory Board Co. (The) (a)		1,022,729		50,093
Corporate Executive Board Co. (The)		668,923		48,517
WageWorks, Inc. (a)		959,395		61,948
				160,558
Semiconductors & Semiconductor Equipment (1.7%)
Tessera Technologies, Inc.		964,403		34,487
Software (7.8%)
Ellie Mae, Inc. (a)		576,955		23,263
FireEye, Inc. (a)		293,293		9,262
FleetMatics Group PLC (Ireland) (a)(b)		623,721		22,136
Guidewire Software, Inc. (a)		1,023,117		51,800
RealPage, Inc. (a)		478,176		10,501
Solera Holdings, Inc.		801,134		41,002
				157,964
Specialty Retail (7.6%)
Citi Trends, Inc. (a)		641,314		16,193
Five Below, Inc. (a)		1,260,665		51,473

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Small Company Growth Portfolio

	Shares		Value (000)
Specialty Retail (cont'd)
Lumber Liquidators Holdings, Inc. (a)		259,531	$	17,210
Restoration Hardware Holdings, Inc. (a)		715,020		68,649
				153,525
Tech Hardware, Storage & Peripherals (0.4%)
Nimble Storage, Inc. (a)(b)		319,603		8,789
Total Common Stocks (Cost $1,452,718)				1,882,554
Preferred Stocks (5.3%)
Health Care Technology (0.2%)
Grand Rounds, Inc. Series B (a)(d)(e)(f) (acquisition cost — $3,362; acquired 7/3/14)		3,269,139		3,106
Hotels, Restaurants & Leisure (0.7%)
Blue Bottle Coffee, Inc. Series B (a)(d)(e)(f) (acquisition cost — $13,714; acquired 1/24/14)		947,792		14,198
Internet & Catalog Retail (2.8%)
Flipkart Online Services Pvt Ltd. Series D (a)(d)(e)(f) (acquisition cost — $9,579; acquired 10/4/13)		417,464		49,995
Wayfair, Inc. Series B (a)		323,475		6,101
				56,096
Internet Software & Services (0.4%)
Doximity, Inc. Series C (a)(d)(e)(f) (acquisition cost — $8,482; acquired 4/10/14)		1,759,434		7,566
Mode Media Corporation Series M-1 (a)(d)(e)(f) (acquisition cost — $5,449; acquired 3/19/08)		361,920		637
Mode Media Corporation Escrow Series M-1 (a)(d)(e)(f) (acquisition cost — $506; acquired 3/19/08)		51,702		41
				8,244
Software (1.1%)
DOMO, Inc. (a)(d)(e)(f) (acquisition cost — $10,559; acquired 1/31/14 — 2/7/14)		2,554,715		9,938
Lookout, Inc. Series F (a)(d)(e)(f) (acquisition cost — $13,476; acquired 06/17/14)		1,179,743		12,057
				21,995
Tobacco (0.1%)
NJOY, Inc. Series D (a)(d)(e)(f) (acquisition cost — $6,363; acquired 2/14/14)		375,918		2,624
Total Preferred Stocks (Cost $79,973)				106,263
Convertible Preferred Stock (0.0%)
Internet Software & Services (0.0%)
Youku Tudou, Inc., Class A (China) (a)(d)(e)(f) (acquisition cost — $—@; acquired 9/16/10) (Cost $—@)		1		—	@

	Face Amount (000)		Value (000)
Promissory Notes (0.0%)
Internet Software & Services (0.0%)
Mode Media Corporation 9.00%, 12/3/19 (a)(d)(e)(f) (acquisition cost — $2,301; acquired 3/19/08)	$	793	$	695
Mode Media Corporation Escrow 9.00%, 12/3/19 (a)(d)(e)(f) (acquisition cost — $55; acquired 3/19/08)		29		11
Total Promissory Notes (Cost $2,356)				706
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		418,051,131		715
USD/CNY November 2015 @ CNY 6.65		326,873,064		1,657
Total Call Options Purchased (Cost $2,236)				2,372
	Shares
Short-Term Investments (10.9%)
Securities held as Collateral on Loaned Securities (9.0%)
Investment Company (8.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		165,676,632		165,677
	Face Amount (000)
Repurchase Agreement (0.8%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $15,799; fully collateralized by various U.S. Government obligations; 2.13% — 4.25% due 1/31/21 — 11/15/40; valued at $16,120)	$	15,804		15,804
Total Securities held as Collateral on Loaned Securities (Cost $181,481)				181,481
	Shares
Investment Company (1.9%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $38,539)		38,539,104		38,539
Total Short-Term Investments (Cost $220,020)				220,020
Total Investments (109.6%) (Cost $1,757,303) Including $195,346 of Securities Loaned (g)				2,211,915
Liabilities in Excess of Other Assets (-9.6%)				(194,541	)
Net Assets (100.0%)			$	2,017,374

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2014.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Small Company Growth Portfolio

(d) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $112,273,000, representing 5.6% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(e) Security has been deemed illiquid at December 31, 2014.

(f) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at December 31, 2014 amounts to approximately $112,273,000 and represents 5.6% of net assets.

(g) The approximate fair value and percentage of net assets, $56,328,000 and 2.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

@ Value is less than $500.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Internet Software & Services		20.3	%
Other**		18.0
Health Care Technology		11.9
Internet & Catalog Retail		10.7
Software		8.9
Professional Services		7.9
Capital Markets		7.8
Specialty Retail		7.6
Hotels, Restaurants & Leisure		6.9
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
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Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Small Company Growth Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $1,553,087)	$	2,007,699
Investment in Security of Affiliated Issuer, at Value (Cost $204,216)		204,216
Total Investments in Securities, at Value (Cost $1,757,303)		2,211,915
Foreign Currency, at Value (Cost $—@)		—	@
Cash		16,703
Receivable for Portfolio Shares Sold		814
Interest Receivable		148
Dividends Receivable		141
Receivable from Affiliate		4
Other Assets		131
Total Assets		2,229,856
Liabilities:
Collateral on Securities Loaned, at Value		198,184
Payable for Portfolio Shares Redeemed		6,718
Payable for Advisory Fees		3,782
Due to Broker		2,820
Payable for Sub Transfer Agency Fees — Class I		485
Payable for Sub Transfer Agency Fees — Class A		126
Payable for Sub Transfer Agency Fees — Class L		5
Payable for Administration Fees		138
Payable for Professional Fees		57
Payable for Shareholder Services Fees — Class A		40
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Custodian Fees		17
Payable for Transfer Agency Fees — Class I		9
Payable for Transfer Agency Fees — Class A		5
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Directors' Fees and Expenses		12
Other Liabilities		81
Total Liabilities		212,482
Net Assets	$	2,017,374
Net Assets Consist Of:
Paid-in-Capital	$	1,566,042
Accumulated Net Investment Loss		(2,274	)
Distributions in Excess of Net Realized Gain		(1,006	)
Unrealized Appreciation (Depreciation) on:
Investments		454,612
Foreign Currency Translations		(—	@)
Net Assets	$	2,017,374

The accompanying notes are an integral part of the financial statements.
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Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Small Company Growth Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	1,156,812
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		70,124,613
Net Asset Value, Offering and Redemption Price Per Share	$	16.50
CLASS A:
Net Assets	$	186,307
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		12,514,121
Net Asset Value, Redemption Price Per Share	$	14.89
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.83
Maximum Offering Price Per Share	$	15.72
CLASS L:
Net Assets	$	2,370
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		162,289
Net Asset Value, Offering and Redemption Price Per Share	$	14.60
CLASS IS:
Net Assets	$	671,885
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		40,693,034
Net Asset Value, Offering and Redemption Price Per Share	$	16.51
⁽¹⁾ Including: Securities on Loan, at Value:	$	195,346

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Small Company Growth Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Income from Securities Loaned — Net	$	8,591
Dividends from Securities of Unaffiliated Issuers (Net of $352 of Foreign Taxes Withheld)		7,455
Interest from Securities of Unaffiliated Issuers		147
Dividends from Security of Affiliated Issuer (Note G)		46
Total Investment Income		16,239
Expenses:
Advisory Fees (Note B)		19,264
Sub Transfer Agency Fees		261
Sub Transfer Agency Fees — Class I		2,059
Sub Transfer Agency Fees — Class A		327
Sub Transfer Agency Fees — Class L		5
Administration Fees (Note C)		1,781
Shareholder Services Fees — Class A (Note D)		566
Distribution and Shareholder Services Fees — Class L (Note D)		20
Shareholder Reporting Fees		191
Registration Fees		144
Professional Fees		135
Custodian Fees (Note F)		126
Directors' Fees and Expenses		50
Transfer Agency Fees — Class I (Note E)		24
Transfer Agency Fees — Class A (Note E)		13
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		3
Pricing Fees		9
Other Expenses		28
Total Expenses		25,008
Reimbursement of Class Specific Expenses — Class I (Note B)		(1,211	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(—	@)
Rebate from Morgan Stanley Affiliate (Note G)		(102	)
Net Expenses		23,692
Net Investment Loss		(7,453	)
Realized Gain:
Investments Sold		214,330
Foreign Currency Transactions		17
Net Realized Gain		214,347
Change in Unrealized Appreciation (Depreciation):
Investments		(471,646	)
Foreign Currency Translations		(1	)
Net Change in Unrealized Appreciation (Depreciation)		(471,647	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(257,300	)
Net Decrease in Net Assets Resulting from Operations	$	(264,753	)

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Small Company Growth Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(7,453	)	$	(9,209	)
Net Realized Gain		214,347			285,831
Net Change in Unrealized Appreciation (Depreciation)		(471,647	)		581,506
Net Increase (Decrease) in Net Assets Resulting from Operations		(264,753	)		858,128
Distributions from and/or in Excess of:
Class I:
Net Realized Gain		(132,988	)		(199,473	)
*Class A:**
Net Realized Gain		(23,704	)		(30,381	)
*Class H:**
Net Realized Gain		—			(444	)**
Class L:
Net Realized Gain		(300	)		(288	)
Class IS:
Net Realized Gain		(72,948	)		(11,450	)***
Total Distributions		(229,940	)		(242,036	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		390,498			569,339
Distributions Reinvested		116,535			179,899
Redeemed		(1,037,599	)		(419,274	)
*Class A:**
Subscribed		28,385			51,772
Distributions Reinvested		23,620			30,284
Conversion from Class H		—			40,275
Redeemed		(94,284	)		(63,380	)
*Class H:**
Subscribed		—			365	**
Distributions Reinvested		—			432	**
Conversion to Class A		—			(40,275	)**
Redeemed		—			(2,876	)**
Class L:
Subscribed		988			277
Distributions Reinvested		298			286
Redeemed		(910	)		(333	)
Class IS:
Subscribed		758,371			119,724	***
Distributions Reinvested		70,105			11,449	***
Redeemed		(172,236	)		(413	)***
Net Increase in Net Assets Resulting from Capital Share Transactions		83,771			477,551
Redemption Fees		123			83
Total Increase (Decrease) in Net Assets		(410,799	)		1,093,726
Net Assets:
Beginning of Period		2,428,173			1,334,447
End of Period (Including Accumulated Net Investment Loss of $(2,274) and $(331))	$	2,017,374		$	2,428,173

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Small Company Growth Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		20,776			30,361
Shares Issued on Distributions Reinvested		7,237			9,194
Shares Redeemed		(56,087	)		(22,130	)
Net Increase (Decrease) in Class I Shares Outstanding		(28,074	)		17,425
*Class A:**
Shares Subscribed		1,637			3,064
Shares Issued on Distributions Reinvested		1,623			1,685
Conversion from Class H		—			2,320
Shares Redeemed		(5,758	)		(3,998	)
Net Increase (Decrease) in Class A Shares Outstanding		(2,498	)		3,071
*Class H:**
Shares Subscribed		—			23	**
Shares Issued on Distributions Reinvested		—			27	**
Conversion to Class A		—			(2,319	)**
Shares Redeemed		—			(188	)**
Net Decrease in Class H Shares Outstanding		—			(2,457	)
Class L:
Shares Subscribed		57			16
Shares Issued on Distributions Reinvested		21			16
Shares Redeemed		(57	)		(20	)
Net Increase in Class L Shares Outstanding		21			12
Class IS:
Shares Subscribed		40,139			5,542	***
Shares Issued on Distributions Reinvested		4,388			579	***
Shares Redeemed		(9,935	)		(20	)***
Net Increase in Class IS Shares Outstanding		34,592			6,101

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Small Company Growth Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	20.55		$	14.16		$	12.64		$	14.17		$	11.14
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.06	)		(0.09	)		(0.03	)		(0.04	)		0.01
Net Realized and Unrealized Gain (Loss)		(2.04	)		8.77			2.19			(1.25	)		3.02
Total from Investment Operations		(2.10	)		8.68			2.16			(1.29	)		3.03
Distributions from and/or in Excess of:
Net Realized Gain		(1.95	)		(2.29	)		(0.64	)		(0.24	)		—
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	16.50		$	20.55		$	14.16		$	12.64		$	14.17
Total Return++		(9.68	)%		62.26	%		17.10	%		(9.12	)%		27.20	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,156,812		$	2,017,558		$	1,143,640		$	1,074,392		$	1,227,782
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.05	%+		1.04	%+		1.05	%+		1.05	%+		1.05	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			1.05	%+		1.05	%+
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.34	)%+		(0.49	)%+		(0.20	)%+		(0.29	)%+		0.10	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		53	%		43	%		22	%		26	%		26	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.13	%		1.08	%		1.12	%		1.10	%		1.12	%+
Net Investment Income (Loss) to Average Net Assets		(0.42	)%		(0.53	)%		(0.27	)%		(0.34	)%		0.03	%+

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Small Company Growth Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	18.83		$	13.13		$	11.80		$	13.27		$	10.46
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.11	)		(0.13	)		(0.06	)		(0.07	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		(1.88	)		8.12			2.03			(1.16	)		2.83
Total from Investment Operations		(1.99	)		7.99			1.97			(1.23	)		2.81
Distributions from and/or in Excess of:
Net Realized Gain		(1.95	)		(2.29	)		(0.64	)		(0.24	)		—
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	14.89		$	18.83		$	13.13		$	11.80		$	13.27
Total Return++		(9.98	)%		61.88	%		16.70	%		(9.28	)%		26.86	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	186,307		$	282,632		$	156,824		$	282,988		$	530,123
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.38	%+		1.31	%+^		1.30	%+		1.30	%+		1.30	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			1.30	%+		1.30	%+
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.67	)%+		(0.75	)%+		(0.45	)%+		(0.54	)%+		(0.15	)%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		53	%		43	%		22	%		26	%		26	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.35	%		1.37	%		1.35	%		1.37	%+
Net Investment Loss to Average Net Assets		N/A			(0.79	)%		(0.52	)%		(0.59	)%		(0.22	)%+

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

+ The Ratios of Expenses and Net Investment Loss reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.30% for Class A shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Small Company Growth Portfolio

	Class L
	Year Ended December 31,									Period from November 11, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	18.60		$	13.06		$	11.79		$	12.47
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.19	)		(0.21	)		(0.12	)		(0.01	)
Net Realized and Unrealized Gain (Loss)		(1.86	)		8.04			2.03			(0.43	)
Total from Investment Operations		(2.05	)		7.83			1.91			(0.44	)
Distributions from and/or in Excess of:
Net Realized Gain		(1.95	)		(2.29	)		(0.64	)		(0.24	)
Redemption Fees		0.00	‡		0.00	‡		(0.00	)‡		0.00	‡
Net Asset Value, End of Period	$	14.60		$	18.60		$	13.06		$	11.79
Total Return++		(10.43	)%		60.97	%		16.21	%		(3.54	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,370		$	2,632		$	1,696		$	1,657
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.90	%+		1.83	%+^^		1.80	%+		1.80	%+*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(1.16	)%+		(1.27	)%+		(0.95	)%+		(0.77	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§*
Portfolio Turnover Rate		53	%		43	%		22	%		26	%*
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.02	%		1.92	%		1.87	%		1.85	%*
Net Investment Loss to Average Net Assets		(1.28	)%		(1.36	)%		(1.02	)%		(0.82	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.80% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Small Company Growth Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	20.55		$	19.51
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.03	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		(2.06	)		3.15
Total from Investment Operations		(2.09	)		3.13
Distributions from and/or in Excess of:
Net Realized Gain		(1.95	)		(2.09	)
Redemption Fees		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	16.51		$	20.55
Total Return++		(9.63	)%		16.50	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	671,885		$	125,351
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.97	%+		0.97	%+^^*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.17	)%+		(0.30	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		53	%		43	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.98	%		0.99	%*
Net Investment Loss to Average Net Assets		(0.18	)%		(0.32	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.98% for Class IS shares.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Small Company Growth Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small capitalization companies. The Portfolio holds promissory notes it has made to certain investee companies for this same purpose, the details of which are disclosed in the Portfolio of Investments. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

The Fund suspended offering Class A and Class L shares of the Portfolio to new investors. The Fund will continue to offer shares of the Portfolio to existing shareholders. Effective at the close of business on May 30, 2014, the Fund suspended offering Class I shares and Class IS shares of the Portfolio to new investors, except as follows. The Fund will continue to offer Class IS shares of the Portfolio (1) through certain retirement plan accounts, (2) to clients of certain registered investment advisors who currently offer shares of the Portfolio in their asset allocation programs, (3) to directors and trustees of the Morgan Stanley Funds, (4) to Morgan Stanley affiliates and their employees and (5) to benefit plans sponsored by Morgan Stanley and its affiliates. The Fund may recommence offering Class I shares, Class A shares, Class L shares and Class IS shares of the Portfolio to new investors in the future. Any such offerings of the Portfolio's Class I shares, Class A shares, Class L shares and Class IS shares may be limited in amount and may commence and terminate without any prior notice.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest

reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement"

("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	65,050	$	—	$	—		$	65,050
Biotechnology		62,831		—		—			62,831
Capital Markets		151,734		7,507		—			159,241
Chemicals		18,912		—		—			18,912
Construction Materials		19,999		—		—			19,999
Electric Utilities		—		—		—	†		—	†
Electronic Equipment, Instruments & Components		30,789		—		—			30,789
Energy Equipment & Services		7,731		—		—			7,731
Health Care Equipment & Supplies		5,857		—		—			5,857
Health Care Providers & Services		25,969		—		—			25,969
Health Care Technology		237,746		—		—			237,746
Hotels, Restaurants & Leisure		126,831		—		—			126,831
Household Durables		9,700		—		—			9,700
Internet & Catalog Retail		132,316		29,569		—			161,885
Internet Software & Services		383,394		19,252		—			402,646
Media		—		—		11,405			11,405
Pharmaceuticals		20,639		—		—			20,639
Professional Services		160,558		—		—			160,558
Semiconductors & Semiconductor Equipment		34,487		—		—			34,487
Software		157,964		—		—			157,964
Specialty Retail		153,525		—		—			153,525
Tech Hardware, Storage & Peripherals		8,789		—		—			8,789
Total Common Stocks		1,814,821		56,328		11,405	†		1,882,554	†
Preferred Stocks		—		6,101		100,162			106,263
Convertible Preferred Stock		—		—		—	@		—	@
Promissory Notes		—		—		706			706
Call Options Purchased		—		2,372		—			2,372
Short-Term Investments
Investment Company		204,216		—		—			204,216
Repurchase Agreement		—		15,804		—			15,804
Total Short-Term Investments		204,216		15,804		—			220,020
Total Assets	$	2,019,037	$	80,605	$	112,273	†	$	2,211,915	†

@ Value is less than $500.

† Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $29,569,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stocks (000)			Preferred Stocks (000)			Convertible Preferred Stocks (000)			Promissory Notes (000)
Beginning Balance	$	7,178	†	$	23,264		$	—	@	$	715
Purchases		—			55,956			—			—
Sales		—			(7,387	)		—			—
Amortization of discount		—			—			—			—
Transfers in		—			—			—			—
Transfers out		—			—			—			—
Corporate actions		—			—			—			—
Change in unrealized appreciation (depreciation)		4,227			28,329			—	@		(9	)
Realized gains (losses)		—			—			—			—
Ending Balance	$	11,405	†	$	100,162		$	—	@	$	706
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	4,227		$	33,160		$	—	@	$	(9	)

@ Value is less than $500.

† Includes one security which is valued at zero.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Health Care Technology
Preferred Stock	$	3,106	Market Transaction Method	Precedent Transaction of Preferred Stock	$	1.03		$	1.03		$	1.03		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		22.0	%		24.0	%		23.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		8.7	x		18.2	x		13.4	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Hotels, Restaurants & Leisure
Preferred Stock	$	14,198	Market Transaction Method	Precedent Transaction of Preferred Stock	$	14.47		$	14.47		$	14.47		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.5	%		18.5	%		17.5	%	Decrease
				Perpetual Growth Rate		2.5	%		3.5	%		3.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		4.2	x		6.6	x		5.0	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Internet & Catalog Retail
Preferred Stock	$	49,995	Market Transaction Method	Precedent Transaction of Preferred Stock	$	119.76		$	119.76		$	119.76		Increase
Internet Software & Services
Preferred Stocks	$	7,566	Market Transaction Method	Precedent Transaction of Preferred Stock	$	4.82		$	4.82		$	4.82		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		21.0	%		23.0	%		22.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		11.1	x		19.1	x		19.1	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
	$	637	Market Transaction Method	Precedent Transaction	$	4.18		$	4.18		$	4.18		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		15.5	%		17.5	%		16.5	%	Decrease
				Perpetual Growth Rate		2.0	%		3.0	%		2.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		1.5	x		6.5	x		4.2	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Preferred Stock — Escrow	$	41		Discount for Escrow		54.8	%		54.8	%		54.8	%	Decrease

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Promissory Note	$	695	Market Transaction	Valuation at Issuance as a Percentage of Principal		100.00	%		100.00	%		100.00	%	Increase
				Cost of Debt		14.1	%		14.1	%		14.1	%	Decrease
				Valuation as a Percentage of Principal		87.6	%		87.6	%		87.6	%	Increase
Promissory Note — Escrow	$	11	Market Transaction	Valuation as a Percentage of Principal		39.6	%		39.6	%		39.6	%	Increase
Media
Common Stock	$	11,405	Market Transaction Method	Precedent Transaction	$	2,119.29		$	2,119.29		$	2,119.29		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		14.0	%		16.0	%		15.0	%	Decrease
				Perpetual Growth Rate		3.0	%		5.0	%		4.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		3.4	x		8.3	x		5.8	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Software
Preferred Stocks	$	9,938	Market Transaction Method	Precedent Transaction	$	4.13		$	4.13		$	4.13		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		19.0	%		21.0	%		20.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		12.6	x		15.8	x		13.4	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
	$	12,057	Market Transaction Method	Precedent Transaction of Preferred Stock	$	11.42		$	11.42		$	11.42		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		18.0	%		20.0	%		19.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		14.6	x		28.9	x		20.0	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Tobacco
Preferred Stock	$	2,624	Market Transaction Method	Precedent Transaction	$	16.93		$	16.93		$	16.93		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		21.5	%		23.5	%		22.5	%	Decrease
				Perpetual Growth Rate		2.5	%		3.5	%		3.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		4.5	x		5.6	x		4.7	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

3. Repurchase Agreements: The Portfolio may enter into repurchase agreements under which the Portfolio lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Portfolio takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

5. Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Options: In respect to options, the Portfolio is subject to equity risk, interest rate risk and foreign currency

exchange risk in the normal course of pursuing its investment objectives. If the Portfolio buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument, at an agreed-upon price typically in exchange for a premium paid by the Portfolio. The Portfolio may purchase and/or sell put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Portfolio bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

2,372

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(2,228	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	1,172	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	2,372	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	2,372	$	—	$	(2,372	)	$	0

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					946,188,000

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	195,346	(f)	$	—	$	(195,346	)(g)(h)	$	0

(f) Represents market value of loaned securities at period end.

(g) The Portfolio received cash collateral of approximately $198,184,000, of which approximately $181,481,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $16,703,000, which is not reflected in the Portfolio of Investments. In addition, the Portfolio received non-cash collateral of approximately $1,528,000 in the form of U.S. Government obligations, which the Portfolio cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(h) The actual collateral received is greater than the amount shown here due to overcollateralization.

7. Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term

"restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

8. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares and Class IS shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

9. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

10. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Next $500 million				Over $1.5 billion
	0.92	%			0.85	%			0.80	%

For the year ended December 31, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.86% of the Portfolio's average daily net assets.

provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investments, were approximately $1,140,597,000 and $1,205,541,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $102,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	241,609			$	1,081,836			$	1,119,229			$	46			$	204,216

currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10 Income Taxes — Overall sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in ''Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	229,940	$	1,519	$	240,517

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, a net operating loss, basis adjustments on certain equity securities designated as passive foreign investment companies and partnerships and equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Net Investment Loss (000)				Distributions in Excess of Net Realized Gain (000)				Paid-in- Capital (000)
$	5,510			$	(36,802	)		$	31,292

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	—			$	2,371

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $1,760,680,000. The aggregate gross unrealized appreciation is approximately $561,546,000 and the aggregate gross unrealized depreciation is approximately $110,311,000 resulting in net unrealized appreciation of approximately $451,235,000.

Capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year are deemed to arise on the first day of the Portfolio's next taxable year. For the year ended December 31, 2014, the Portfolio deferred to January 1, 2015 for U.S. Federal income tax purposes the following losses:

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	2,229			$	—

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 46.0%, 55.0% and 65.0%, for Class I, Class A and Class IS shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Small Company Growth Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Small Company Growth Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Small Company Growth Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014.

The Portfolio designated and paid approximately $268,952,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFISCGANN
1110223 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					10
Statement of Operations					12
Statements of Changes in Net Assets					13
Financial Highlights					15
Notes to Financial Statements					19
Report of Independent Registered Public Accounting Firm					28
Federal Tax Notice					29
U.S. Privacy Policy					30
Director and Officer Information					33

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Emerging Markets Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Emerging Markets Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Portfolio Class I	$	1,000.00	$	905.00	$	1,018.90	$	6.00	$	6.36		1.25	%
Emerging Markets Portfolio Class A		1,000.00		903.80		1,017.44		7.39		7.83		1.54
Emerging Markets Portfolio Class L		1,000.00		901.40		1,014.62		10.06		10.66		2.10
Emerging Markets Portfolio Class IS		1,000.00		905.70		1,019.26		5.67		6.01		1.18

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Emerging Markets Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -4.47%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI Emerging Markets Net Index (the "Index"), which returned -2.19%.

Factors Affecting Performance

• 2014 was a volatile year in emerging markets. Investor concerns about a slowing China and Russian actions in Ukraine and Crimea early in the year were followed by sharp rallies later in the second quarter, sparked by attractive valuations, selective hope of economic reform and mini-stimulus in China. Since early September, however, emerging markets have all but given back the gains of the previous quarter. The sell-off was initially sparked by renewed fears about the prospect of rising U.S. interest rates and a strong U.S. dollar, and exacerbated by falling commodity and oil prices, as well as declining growth prospects in China.

• In the Portfolio, stock selection overall dampened relative performance, while country allocation benefited performance.

• The main detractors from relative performance included our stock selection and overweight allocation to Poland, our underweight allocations to China and Taiwan, and our zero weight to Turkey.

• Contributing the most to relative returns were our overweight allocations in India and Thailand, our stock selection and underweight allocation in Brazil, our underweight allocation in Russia, and overweight allocation in the Philippines.

Management Strategies

• China's incremental contribution to global growth has been far more important than Europe's for well over a decade. Despite U.S. economic strength, a slowing China keeps a damper on any global

recovery and could possibly even contribute to a potential global recession. Until we see signs that China's slowdown stabilizes, it will be difficult to say that emerging market equities have hit a critical turning point. Despite their rate cut in 2014, China's economy will continue to feel the pressure of their excessive credit expansion and a property market that has further to unwind. We have long stated that China's gross domestic product (GDP) growth rate will slow to 5% within the next couple years. The market may not be satisfied that China is on a track to stabilizing — as opposed to slowing — until the middle of 2015.

• In the Portfolio, we remained focused on quality and growth. We maintain our underweight to countries dependent on global cyclical growth such as China, as well as the commodities-oriented markets of Brazil, Russia and South Africa.

• We are overweight countries that we believe are fundamentally sound and where reform is on a constructive path, such as Poland, the Czech Republic, India, the Philippines and Mexico. These are countries that have not experienced excessive credit growth since the global financial crisis and where factors such as investment, manufacturing, currency competitiveness and improving productivity are all encouraging and contributing to growth prospects at both the country and select company levels.

• We still consider Eastern Europe an attractive investment opportunity despite its recent run of poor performance, and we have been adding to some of our positions on weakness. We think Poland, the Czech Republic and Romania are positioned favorably as members of the European Union but with the currency competitiveness of not using the euro. Over the medium term, in our view, the region could benefit from its competitive labor market and its trade links and overall ties with a gradual economic recovery in Western Europe. Macro indicators could eventually return to strength, buoyed by more competitive exports and a gradual pick up in wages and domestic consumer and business confidence. A pickup in inflation, particularly in food inflation, would also help.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Emerging Markets Portfolio

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the MSCI Emerging Markets Net Index⁽¹⁾ and the Lipper Emerging Markets Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–4.47	%		1.94	%		7.90	%		8.12	%
MSCI Emerging Markets Net Index		–2.19			1.78			8.43			7.85
Lipper Emerging Markets Funds Index		–2.66			2.51			7.85			N/A
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		–4.77			1.67			7.62			6.95
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–9.76			0.58			7.04			6.64
MSCI Emerging Markets Net Index		–2.19			1.78			8.43			6.35
Lipper Emerging Markets Funds Index		–2.66			2.51			7.85			6.48
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		–5.26			—			—			–0.36
MSCI Emerging Markets Net Index		–2.19			—			—			0.22
Lipper Emerging Markets Funds Index		–2.66			—			—			0.77
Portfolio — Class IS Shares w/o sales charges⁽⁷⁾		–4.36			—			—			–2.00
MSCI Emerging Markets Net Index		–2.19			—			—			–0.19
Lipper Emerging Markets Funds Index		–2.66			—			—			–0.12

⁽¹⁾ The MSCI Emerging Markets Net Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance of emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI Emerging Markets Net Index currently consists of 23 emerging market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Emerging Markets Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Emerging Markets Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Emerging Markets Funds classification.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Emerging Markets Portfolio

⁽⁴⁾ Commenced operations on September 25, 1992.

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on April 27, 2012.

⁽⁷⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Emerging Markets Portfolio

	Shares		Value (000)
Common Stocks (97.7%)
Argentina (0.4%)
YPF SA ADR		159,990	$	4,235
Austria (2.1%)
Erste Group Bank AG		508,355		11,655
Vienna Insurance Group AG Wiener Versicherung Gruppe		207,049		9,215
				20,870
Brazil (7.4%)
Banco Bradesco SA (Preference)		948,377		12,680
BRF SA		1,003,572		23,463
CCR SA		890,390		5,113
Itau Unibanco Holding SA (Preference)		1,006,838		13,091
Petroleo Brasileiro SA		707,235		2,582
Petroleo Brasileiro SA (Preference)		1,837,039		6,961
Petroleo Brasileiro SA ADR		25,351		185
Raia Drogasil SA		505,312		4,800
Ultrapar Participacoes SA		269,373		5,136
				74,011
Chile (0.5%)
SACI Falabella		770,107		5,166
China (15.1%)
Bank of China Ltd. H Shares (a)		52,903,000		29,620
CGN Power Co., Ltd. H Shares (a)(b)(c)		1,980,000		860
China Construction Bank Corp. H Shares (a)		18,587,250		15,128
China Life Insurance Co., Ltd. H Shares (a)		2,382,000		9,344
China Mengniu Dairy Co., Ltd. (a)		1,303,000		5,343
China Mobile Ltd. (a)		1,425,000		16,740
China Oilfield Services Ltd. H Shares (a)		4,216,000		7,339
China Overseas Land & Investment Ltd. (a)		1,606,000		4,740
China Pacific Insurance Group Co., Ltd. H Shares (a)		1,232,400		6,176
Chongqing Changan Automobile Co., Ltd. B Shares		766,502		1,734
CSPC Pharmaceutical Group Ltd. (a)		2,902,000		2,547
Huadian Power International Corp. Ltd. H Shares (a)		3,780,000		3,302
JD.com, Inc. ADR (c)(d)		154,477		3,575
Qihoo 360 Technology Co., Ltd. ADR (c)(d)		33,007		1,890
Shenzhen International Holdings Ltd. (a)		1,500,500		2,189
Sihuan Pharmaceutical Holdings Group Ltd. (a)		6,565,000		4,367
TAL Education Group ADR (c)(d)		105,982		2,977
Tencent Holdings Ltd. (a)		1,768,200		25,371
Tsingtao Brewery Co., Ltd. H Shares (a)(d)		524,000		3,541
Uni-President China Holdings Ltd. (a)(d)		4,072,200		3,745
				150,528
Colombia (2.4%)
Bancolombia SA (Preference)		336,441		4,039
Bancolombia SA ADR (d)		14,134		677
Cementos Argos SA		572,285		2,441
Cemex Latam Holdings SA (c)		654,832		4,386
Grupo Aval Acciones y Valores ADR		555,020		5,767

	Shares		Value (000)
Grupo de Inversiones Suramericana SA		224,647	$	3,743
Grupo de Inversiones Suramericana SA (Preference)		170,600		2,809
				23,862
Czech Republic (1.0%)
Komercni Banka AS		47,483		9,782
Hong Kong (1.2%)
Samsonite International SA		4,110,000		12,167
India (10.8%)
Ashok Leyland Ltd. (c)		10,142,987		8,173
Bharat Petroleum Corp. Ltd.		687,940		7,035
Glenmark Pharmaceuticals Ltd.		510,530		6,209
HDFC Bank Ltd.		710,765		12,141
Hero MotoCorp Ltd.		151,465		7,457
ICICI Bank Ltd.		1,254,135		6,966
Idea Cellular Ltd.		1,642,189		3,978
IndusInd Bank Ltd.		761,111		10,525
ITC Ltd.		1,017,702		5,925
Maruti Suzuki India Ltd.		150,813		8,101
Oil & Natural Gas Corp. Ltd.		1,527,956		8,233
Shree Cement Ltd.		46,966		6,992
Shriram Transport Finance Co., Ltd.		419,283		7,353
Tata Consultancy Services Ltd.		217,512		8,808
				107,896
Indonesia (1.6%)
Kalbe Farma Tbk PT		38,451,400		5,683
Link Net Tbk PT (c)		8,949,200		3,556
Matahari Department Store Tbk PT		5,022,200		6,088
Surya Citra Media Tbk PT		730,400		206
XL Axiata Tbk PT		1,535,900		599
				16,132
Korea, Republic of (13.0%)
Cosmax, Inc. (c)		30,226		2,725
Coway Co., Ltd. (c)		120,254		9,150
Hana Financial Group, Inc.		202,453		5,848
Hotel Shilla Co., Ltd. (c)(d)		57,439		4,750
Hyundai Department Store Co., Ltd. (c)		15,542		1,726
Hyundai Engineering & Construction Co., Ltd. (c)		107,492		4,070
Hyundai Glovis Co., Ltd. (c)(d)		18,349		4,844
Industrial Bank of Korea (c)		87,387		1,113
KB Financial Group, Inc. (c)		264,121		8,626
Kia Motors Corp. (c)		154,065		7,279
NAVER Corp. (c)		16,596		10,721
NCSoft Corp.		22,822		3,741
Nexon Co., Ltd.		340,600		3,176
Orion Corp. (c)		1,410		1,297
Paradise Co., Ltd. (d)		105,116		2,241
Samsung Electronics Co., Ltd.		17,692		21,267
Samsung Electronics Co., Ltd. (Preference)		2,289		2,142
Samsung Life Insurance Co., Ltd. (c)		69,449		7,335
Seoul Semiconductor Co., Ltd. (c)(d)		175,209		3,186
Shinhan Financial Group Co., Ltd. (c)		188,528		7,564

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Emerging Markets Portfolio

	Shares		Value (000)
Korea, Republic of (cont'd)
SK Hynix, Inc. (c)		286,153	$	12,321
SK Telecom Co., Ltd.		19,768		4,807
				129,929
Laos (0.2%)
Kolao Holdings (c)(d)		134,419		2,382
Malaysia (1.2%)
Astro Malaysia Holdings Bhd		4,885,300		4,220
IHH Healthcare Bhd		2,924,400		4,024
SapuraKencana Petroleum Bhd (c)		6,033,600		4,006
				12,250
Mexico (6.9%)
Alfa SAB de CV (c)		4,926,058		11,008
America Movil SAB de CV, Class L ADR		473,700		10,507
Cemex SAB de CV ADR (c)(d)		1,393,240		14,197
First Cash Financial Services, Inc. (c)(d)		64,268		3,578
Fomento Economico Mexicano SAB de CV ADR (c)		193,014		16,991
Grupo Financiero Banorte SAB de CV Series O		995,869		5,502
Grupo Financiero Inbursa SAB de CV Series O		1,821,703		4,725
Grupo Financiero Santander Mexico SAB de CV ADR		248,317		2,573
				69,081
Pakistan (0.8%)
United Bank Ltd.		4,266,800		7,425
Panama (0.4%)
Copa Holdings SA, Class A (d)		38,811		4,022
Peru (1.4%)
Credicorp Ltd.		83,803		13,424
Philippines (4.1%)
BDO Unibank, Inc.		2,672,520		6,537
DMCI Holdings, Inc.		11,992,400		4,198
International Container Terminal Services, Inc.		1,718,080		4,401
LT Group, Inc.		9,903,700		2,685
Metro Pacific Investments Corp.		66,554,300		6,803
Metropolitan Bank & Trust		3,980,340		7,338
SM Investments Corp.		476,380		8,633
				40,595
Poland (3.2%)
Bank Pekao SA		199,655		10,041
Bank Zachodni WBK SA		84,248		8,921
Jeronimo Martins SGPS SA		789,741		7,916
PKP Cargo SA		229,079		5,385
				32,263
Qatar (0.5%)
Ooredoo QSC		133,256		4,477
Russia (1.4%)
Mail.ru Group Ltd. GDR (c)		199,792		3,227
NovaTek OAO (Registered GDR)		79,499		6,174
Yandex N.V., Class A (c)		230,180		4,134
				13,535

	Shares		Value (000)
South Africa (5.6%)
Life Healthcare Group Holdings Ltd.		975,208	$	3,593
Mondi PLC		576,722		9,396
MTN Group Ltd.		702,218		13,326
Naspers Ltd., Class N		131,848		16,975
Pick n Pay Stores Ltd.		966,079		4,375
Vodacom Group Ltd. (d)		748,325		8,264
				55,929
Switzerland (1.3%)
Coca-Cola HBC AG (c)		411,653		7,833
Swatch Group AG (The)		10,804		4,797
				12,630
Taiwan (9.3%)
Advanced Semiconductor Engineering, Inc.		3,176,000		3,776
Catcher Technology Co., Ltd.		400,000		3,079
Cathay Financial Holding Co., Ltd.		1,108,000		1,630
Chailease Holding Co., Ltd.		2,990,405		7,415
Cleanaway Co., Ltd.		159,000		734
Delta Electronics, Inc.		751,000		4,462
Eclat Textile Co., Ltd.		411,867		4,171
Epistar Corp.		1,357,000		2,679
Far EasTone Telecommunications Co., Ltd.		610,000		1,404
Fubon Financial Holding Co., Ltd.		3,922,490		6,238
Ginko International Co., Ltd.		192,000		2,030
Hermes Microvision, Inc.		114,155		5,719
Largan Precision Co., Ltd.		100,000		7,487
MediaTek, Inc.		616,000		8,968
Pegatron Corp.		69,000		159
Taiwan Mobile Co., Ltd.		763,000		2,520
Taiwan Semiconductor Manufacturing Co., Ltd.		5,834,205		25,745
Uni-President Enterprises Corp.		3,104,549		4,893
				93,109
Thailand (5.0%)
Advanced Info Service PCL (Foreign)		1,154,200		8,789
Bangkok Bank PCL NVDR		1,376,900		8,083
DKSH Holding AG (d)		71,090		5,422
Indorama Ventures PCL (Foreign)		5,812,100		3,565
Kasikornbank PCL NVDR		745,500		5,148
Land and Houses PCL (Foreign)		17,495,140		4,808
Minor International PCL (Foreign)		2,925,300		2,885
PTT PCL (Foreign)		719,000		7,049
Total Access Communication PCL (Foreign)		996,500		2,910
Total Access Communication PCL NVDR		290,000		847
				49,506
United States (0.9%)
Yum! Brands, Inc.		118,951		8,666
Total Common Stocks (Cost $866,493)				973,872
	No. of Warrants
Warrants (0.0%)
Thailand (0.0%)
Minor International PCL (c) (Cost $—@)		153,140		23

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Emerging Markets Portfolio

	Shares		Value (000)
Investment Company (0.5%)
Thailand (0.5%)
BTS Rail Mass Transit Growth Infrastructure Fund (Foreign) (Units) (e) (Cost $5,971)		16,179,736	$	4,866
Short-Term Investments (5.9%)
Securities held as Collateral on Loaned Securities (3.8%)
Investment Company (3.8%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G)		37,262,394		37,262
Total Securities held as Collateral on Loaned Securities (Cost $37,262)				37,262
Investment Company (2.1%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $20,881)		20,880,765		20,881
Total Short-Term Investments (Cost $58,143)				58,143
Total Investments (104.1%) (Cost $930,607) Including $42,057 of Securities Loaned (f)(g)				1,036,904
Liabilities in Excess of Other Assets (-4.1%)				(40,427	)
Net Assets (100.0%)			$	996,477

(a) Security trades on the Hong Kong exchange.

(b) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d) All or a portion of this security was on loan at December 31, 2014.

(e) Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(f) Securities are available for collateral in connection with open foreign currency forward exchange contracts.

(g) The approximate fair value and percentage of net assets, $854,379,000 and 85.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

NVDR Non-Voting Depositary Receipt.

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at December 31, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
State Street Bank and Trust Co.	JPY	388,922	$	3,247	1/8/15	USD	3,236	$	3,236	$	(11	)
State Street Bank and Trust Co.	USD	136		136	1/8/15	JPY	16,255		136		(—	@)
UBS AG	EUR	23,233		28,116	1/15/15	USD	29,066		29,066		950
			$	31,499				$	32,438	$	939

@ Value is less than $500.

EUR — Euro

JPY — Japanese Yen

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		60.5	%
Banks		23.5
Semiconductors & Semiconductor Equipment		8.6
Wireless Telecommunication Services		7.4
Total Investments		100.0	%***

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

*** Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $939,000.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $872,464)	$	978,761
Investment in Security of Affiliated Issuer, at Value (Cost $58,143)		58,143
Total Investments in Securities, at Value (Cost $930,607)		1,036,904
Foreign Currency, at Value (Cost $3,046)		2,853
Cash		6,506
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		950
Dividends Receivable		864
Receivable for Portfolio Shares Sold		467
Receivable for Investments Sold		162
Tax Reclaim Receivable		72
Receivable from Affiliate		2
Other Assets		75
Total Assets		1,048,855
Liabilities:
Collateral on Securities Loaned, at Value		43,768
Payable for Advisory Fees		2,699
Deferred Capital Gain Country Tax		2,299
Payable for Portfolio Shares Redeemed		2,123
Payable for Investments Purchased		801
Payable for Sub Transfer Agency Fees — Class I		210
Payable for Sub Transfer Agency Fees — Class A		17
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Custodian Fees		166
Payable for Directors' Fees and Expenses		74
Payable for Administration Fees		69
Payable for Professional Fees		55
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		11
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		6
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Other Liabilities		73
Total Liabilities		52,378
Net Assets	$	996,477
Net Assets Consist Of:
Paid-in-Capital	$	906,235
Distributions in Excess of Net Investment Income		(3,063	)
Distributions in Excess of Net Realized Gain		(11,369	)
Unrealized Appreciation (Depreciation) on:
Investments (Net of $2,299 of Deferred Capital Gain Country Tax)		103,998
Foreign Currency Forward Exchange Contracts		939
Foreign Currency Translations		(263	)
Net Assets	$	996,477

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	644,537
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		29,119,898
Net Asset Value, Offering and Redemption Price Per Share	$	22.13
CLASS A:
Net Assets	$	26,701
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,237,882
Net Asset Value, Redemption Price Per Share	$	21.57
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.20
Maximum Offering Price Per Share	$	22.77
CLASS L:
Net Assets	$	210
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		9,796
Net Asset Value, Offering and Redemption Price Per Share	$	21.39
CLASS IS:
Net Assets	$	325,029
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		14,683,202
Net Asset Value, Offering and Redemption Price Per Share	$	22.14
⁽¹⁾ Including: Securities on Loan, at Value:	$	42,057

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2,732 of Foreign Taxes Withheld)	$	21,586
Income from Securities Loaned — Net		220
Dividends from Security of Affiliated Issuer (Note G)		14
Total Investment Income		21,820
Expenses:
Advisory Fees (Note B)		13,506
Custodian Fees (Note F)		1,053
Administration Fees (Note C)		887
Sub Transfer Agency Fees		74
Sub Transfer Agency Fees — Class I		651
Sub Transfer Agency Fees — Class A		45
Sub Transfer Agency Fees — Class L		—	@
Professional Fees		129
Shareholder Services Fees — Class A (Note D)		88
Distribution and Shareholder Services Fees — Class L (Note D)		2
Registration Fees		64
Shareholder Reporting Fees		32
Directors' Fees and Expenses		26
Transfer Agency Fees — Class I (Note E)		13
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		14
Other Expenses		52
Total Expenses		16,643
Waiver of Advisory Fees (Note B)		(2,680	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(195	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(41	)
Net Expenses		13,724
Net Investment Income		8,096
Realized Gain (Loss):
Investments Sold (Net of $1,329 of Capital Gain Country Tax)		37,521
Investments in Affiliates		3,667
Foreign Currency Forward Exchange Contracts		2,642
Foreign Currency Transactions		(974	)
Net Realized Gain		42,856
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $1,115)		(93,764	)
Investments in Affiliates		(3,852	)
Foreign Currency Forward Exchange Contracts		811
Foreign Currency Translations		(197	)
Net Change in Unrealized Appreciation (Depreciation)		(97,002	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(54,146	)
Net Decrease in Net Assets Resulting from Operations	$	(46,050	)

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	8,096		$	9,914
Net Realized Gain		42,856			40,199
Net Change in Unrealized Appreciation (Depreciation)		(97,002	)		(62,846	)
Net Decrease in Net Assets Resulting from Operations		(46,050	)		(12,733	)
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(5,547	)		(9,348	)
Net Realized Gain		(32,704	)		(39,401	)
*Class A:**
Net Investment Income		(129	)		(193	)
Net Realized Gain		(1,451	)		(1,255	)
*Class H:**
Net Investment Income		—			(—	@)**
Net Realized Gain		—			(2	)**
Class L:
Net Investment Income		(1	)		(—	@)
Net Realized Gain		(15	)		(6	)
Class IS:
Net Investment Income		(3,017	)		(—	@)***
Net Realized Gain		(16,464	)		(—	@)***
Total Distributions		(59,328	)		(50,205	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		93,404			109,087
Distributions Reinvested		38,190			48,690
Redeemed		(533,963	)		(247,040	)
*Class A:**
Subscribed		10,567			8,625
Distributions Reinvested		1,559			1,428
Conversion from Class H		—			139
Redeemed		(18,172	)		(13,291	)
*Class H:**
Subscribed		—			139	**
Distributions Reinvested		—			2	**
Conversion to Class A		—			(139	)**
Redeemed		—			(9	)**
Class L:
Subscribed		127			194
Distributions Reinvested		16			6
Redeemed		(101	)		—
Class IS:
Subscribed		354,909			10	***
Distributions Reinvested		19,481			—
Redeemed		(28,889	)		—
Net Decrease in Net Assets Resulting from Capital Share Transactions		(62,872	)		(92,159	)
Redemption Fees		33			100
Total Decrease in Net Assets		(168,217	)		(154,997	)
Net Assets:
Beginning of Period		1,164,694			1,319,691
End of Period (Including Distributions in Excess of Net Investment Income of $(3,063) and $(6,757))	$	996,477		$	1,164,694

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		3,832			4,227
Shares Issued on Distributions Reinvested		1,753			2,005
Shares Redeemed		(22,273	)		(9,732	)
Net Decrease in Class I Shares Outstanding		(16,688	)		(3,500	)
*Class A:**
Shares Subscribed		438			348
Shares Issued on Distributions Reinvested		73			60
Conversion from Class H		—			6
Shares Redeemed		(766	)		(534	)
Net Decrease in Class A Shares Outstanding		(255	)		(120	)
*Class H:**
Shares Subscribed		—			5	**
Shares Issued on Distributions Reinvested		—			—	@@**
Conversion to Class A		—			(6	)**
Shares Redeemed		—			(—	@@)**
Net Decrease in Class H Shares Outstanding		—			(1	)
Class L:
Shares Subscribed		5			8
Shares Issued on Distributions Reinvested		1			—	@@
Shares Redeemed		(5	)		—
Net Increase in Class L Shares Outstanding		1			8
Class IS:
Shares Subscribed		14,962			—	@@***
Shares Issued on Distributions Reinvested		895			—
Shares Redeemed		(1,174	)		—
Net Increase in Class IS Shares Outstanding		14,683			—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	24.64		$	25.94		$	21.73		$	27.14		$	23.10
Income (Loss) from Investment Operations:
Net Investment Income†		0.17			0.20			0.19			0.22			0.10
Net Realized and Unrealized Gain (Loss)		(1.30	)		(0.44	)		4.19			(5.22	)		4.15
Total from Investment Operations		(1.13	)		(0.24	)		4.38			(5.00	)		4.25
Distributions from and/or in Excess of:
Net Investment Income		(0.20	)		(0.20	)		(0.17	)		—			(0.21	)
Net Realized Gain		(1.18	)		(0.86	)		—			(0.41	)		—
Total Distributions		(1.38	)		(1.06	)		(0.17	)		(0.41	)		(0.21	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	22.13		$	24.64		$	25.94		$	21.73		$	27.14
Total Return++		(4.47	)%		(0.80	)%		20.19	%		(18.41	)%		18.49	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	644,537		$	1,128,618		$	1,278,837		$	1,198,857		$	2,031,778
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.25	%+		1.24	%+		1.28	%+^		1.48	%+		1.47	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.24	%+		N/A			N/A			1.47	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.68	%+		0.79	%+		0.80	%+^		0.86	%+		0.40	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		43	%		49	%		47	%		60	%		59	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.52	%		1.51	%		1.49	%		N/A			N/A
Net Investment Income to Average Net Assets		0.41	%		0.52	%		0.59	%		N/A			N/A

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^ Effective March 1, 2012, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class I shares. Prior to March 1, 2012, the maximum ratio was 1.65% for Class I shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	24.02		$	25.31		$	21.20		$	26.56		$	22.61
Income (Loss) from Investment Operations:
Net Investment Income†		0.11			0.12			0.14			0.15			0.04
Net Realized and Unrealized Gain (Loss)		(1.28	)		(0.42	)		4.07			(5.10	)		4.06
Total from Investment Operations		(1.17	)		(0.30	)		4.21			(4.95	)		4.10
Distributions from and/or in Excess of:
Net Investment Income		(0.10	)		(0.13	)		(0.10	)		—			(0.15	)
Net Realized Gain		(1.18	)		(0.86	)		—			(0.41	)		—
Total Distributions		(1.28	)		(0.99	)		(0.10	)		(0.41	)		(0.15	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	21.57		$	24.02		$	25.31		$	21.20		$	26.56
Total Return++		(4.77	)%		(1.07	)%		19.87	%		(18.63	)%		18.20	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	26,701		$	35,863		$	40,824		$	46,521		$	113,434
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.57	%+		1.52	%+^^		1.53	%+^		1.73	%+		1.72	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.52	%+^^		N/A			N/A			1.72	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.45	%+		0.49	%+		0.61	%+^		0.61	%+		0.15	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		43	%		49	%		47	%		60	%		59	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.82	%		1.78	%		1.74	%		N/A			N/A
Net Investment Income to Average Net Assets		0.20	%		0.23	%		0.40	%		N/A			N/A

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.60% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.50% for Class A shares.

^ Effective March 1, 2012, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.50% for Class A shares. Prior to March 1, 2012, the maximum ratio was 1.90% for Class A shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Portfolio

	Class L
	Year Ended December 31,						Period from April 27, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	23.91		$	25.27		$	23.85
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.05	)		(0.05	)		0.04
Net Realized and Unrealized Gain (Loss)		(1.23	)		(0.37	)		1.44
Total from Investment Operations		(1.28	)		(0.42	)		1.48
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.08	)		(0.06	)
Net Realized Gain		(1.18	)		(0.86	)		—
Total Distributions		(1.24	)		(0.94	)		(0.06	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	21.39		$	23.91		$	25.27
Total Return++		(5.26	)%		(1.56	)%		6.20	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	210		$	203		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.10	%+		2.03	%+^^		1.99	%+*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			2.03	%+^^		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.21	)%+		(0.18	)%+		0.27	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.01	%*
Portfolio Turnover Rate		43	%		49	%		47	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.97	%		2.54	%		2.28	%*
Net Investment Loss to Average Net Assets		(1.08	)%		(0.69	)%		(0.02	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class L shares. Prior to September 16, 2013, the maximum ratio was 2.00% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	24.64		$	24.92
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.22			(0.01	)
Net Realized and Unrealized Gain (Loss)		(1.32	)		0.46
Total from Investment Operations		(1.10	)		0.45
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.14	)
Net Realized Gain		(1.18	)		(0.59	)
Total Distributions		(1.40	)		(0.73	)
Redemption Fees		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	22.14		$	24.64
Total Return++		(4.36	)%		1.85	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	325,029		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.18	%+		1.17	%+^^*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.17	%+^^*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.89	%+		(0.21	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		43	%		49	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		1.42	%		6.65	%*
Net Investment Income (Loss) to Average Net Assets		0.65	%		(5.69	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.18% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Emerging Markets Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	4,844	$	—	$	4,844
Airlines		4,022		—		—		4,022
Automobiles		—		24,571		—		24,571
Banks		32,668		202,271		—		234,939
Beverages		16,991		14,059		—		31,050
Chemicals		—		3,565		—		3,565
Commercial Services & Supplies		—		734		—		734
Construction & Engineering		—		4,070		—		4,070
Construction Materials		14,197		13,819		—		28,016
Consumer Finance		3,578		7,353		—		10,931
Diversified Consumer Services		2,977		—		—		2,977
Diversified Financial Services		—		27,008		—		27,008
Diversified Telecommunication Services		—		8,632		—		8,632
Electronic Equipment, Instruments & Components		—		11,949		—		11,949
Energy Equipment & Services		—		11,345		—		11,345
Food & Staples Retailing		—		17,091		—		17,091
Food Products		—		38,741		—		38,741
Health Care Equipment & Supplies		—		2,030		—		2,030

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Health Care Providers & Services	$	—	$	7,617		$	—	$	7,617
Hotels, Restaurants & Leisure		8,666		9,876			—		18,542
Household Durables		—		9,150			—		9,150
Independent Power Producers & Energy Traders		860		3,302			—		4,162
Industrial Conglomerates		11,008		12,831			—		23,839
Information Technology Services		—		8,808			—		8,808
Insurance		—		33,700			—		33,700
Internet & Catalog Retail		3,575		—			—		3,575
Internet Software & Services		6,024		39,319			—		45,343
Machinery		—		8,173			—		8,173
Media		—		21,401			—		21,401
Multi-line Retail		—		12,980			—		12,980
Oil, Gas & Consumable Fuels		4,420		43,170			—		47,590
Paper & Forest Products		—		9,396			—		9,396
Personal Products		—		2,725			—		2,725
Pharmaceuticals		—		18,806			—		18,806
Professional Services		—		5,422			—		5,422
Real Estate Management & Development		—		9,548			—		9,548
Road & Rail		—		5,385			—		5,385
Semiconductors & Semiconductor Equipment		—		85,803			—		85,803
Software		—		6,917			—		6,917
Specialty Retail		—		2,382			—		2,382
Tech Hardware, Storage & Peripherals		—		3,238			—		3,238
Textiles, Apparel & Luxury Goods		—		21,135			—		21,135
Tobacco		—		5,925			—		5,925
Transportation Infrastructure		—		11,703			—		11,703
Wireless Telecommunication Services		10,507		63,585			—		74,092
Total Common Stocks		119,493		854,379			—		973,872
Warrants		23		—			—		23
Investment Company		—		4,866			—		4,866
Short-Term Investments
Investment Company		58,143		—			—		58,143
Foreign Currency Forward Exchange Contract		—		950			—		950
Total Assets		177,659		860,195			—		1,037,854
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(11	)		—		(11	)
Total	$	177,659	$	860,184		$	—	$	1,037,843

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $589,686,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser and/or Sub-Advisers seek to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

The following tables set forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contract

Unrealized Appreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

950

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Depreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

(11

)

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk Foreign Currency Forward	Exchange Contracts	$	2,642
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk Foreign Currency Forward	Exchange Contracts	$	811

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	950	$	(11	)

(a) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
UBS AG	$	950	$	—	$	—	$	950
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
State Street Bank and Trust Co.	$	11	$	—	$	—	$	11

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount				$	18,064,000

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	42,057	(b)	$	—	$	(42,057	)(c)(d)	$	0

(b) Represents market value of loaned securities at period end.

(c) The Portfolio received cash collateral of approximately $43,768,000, of which approximately $37,262,000 was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $6,506,000, which is not reflected in the Portfolio of Investments.

(d) The actual collateral received is greater than the amount shown here due to overcollateralization.

6. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares and Class IS shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

losses pursuant to these contracts and expects the risk of loss to be remote.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million				Next $500 million				Next $1.5 billion				Over $2.5 billion
	1.25	%			1.20	%			1.15	%			1.00	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.97% of the Portfolio's average daily net assets.

for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $2,680,000 of advisory fees were waived and approximately $198,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Portfolio with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Portfolio.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

providing shareholder support services to investors who purchase Class A and Class L shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $469,106,000 and $589,696,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $29,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	27,662			$	329,316			$	298,835			$	14			$	58,143

The Portfolio invests in Morgan Stanley Growth Fund, an open-end management investment company advised by an affiliate of the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory

and administration fees paid by the Morgan Stanley Growth Fund. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $12,000 relating to the Portfolio's investment in the Morgan Stanley Growth Fund.

A summary of the Portfolio's transactions in shares of the Morgan Stanley Growth Fund during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Realized Gain (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	4,668			$	—			$	4,483			$	3,667			$	—			$	—

During the year ended December 31, 2014, the Portfolio incurred approximately $39,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator, Sub-Advisers and Distributor, for portfolio transactions executed on behalf of the Portfolio.

FASB ASC 740-10 Income Taxes — Overall sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	8,694	$	50,634	$	9,542	$	40,664

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, basis adjustments on certain equity securities designated as passive foreign investment companies and foreign taxes paid on capital gains, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Distributions in Excess of Net Investment Income (000)				Distributions in Excess of Net Realized Gain (000)				Paid-in- Capital (000)
$	4,292			$	(4,292	)		$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	1,796			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $939,677,000. The aggregate gross unrealized appreciation is approximately $177,623,000 and the aggregate gross unrealized depreciation is approximately $80,396,000 resulting in net unrealized appreciation of approximately $97,227,000.

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	—			$	6,173

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 64%, 84% and 92%, for Class I, Class A and Class IS shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Emerging Markets Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Emerging Markets Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during the taxable year ended December 31, 2014. For corporate shareholders, 1.0% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $50,634,000 as a long-term capital gain distribution.

The Portfolio intends to pass through foreign tax credits of approximately $3,830,000 and has derived net income from sources within foreign countries amounting to approximately $24,375,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIEMANN
1112918 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Domestic Debt Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					27
U.S. Privacy Policy					28
Director and Officer Information					31

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Emerging Markets Domestic Debt Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Emerging Markets Domestic Debt Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Domestic Debt Portfolio Class I	$	1,000.00	$	886.70	$	1,020.92	$	4.04	$	4.33		0.85	%
Emerging Markets Domestic Debt Portfolio Class A		1,000.00		885.20		1,019.16		5.70		6.11		1.20
Emerging Markets Domestic Debt Portfolio Class L		1,000.00		883.60		1,017.90		6.88		7.38		1.45
Emerging Markets Domestic Debt Portfolio Class IS		1,000.00		886.70		1,021.07		3.90		4.18		0.82

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Emerging Markets Domestic Debt Portfolio

The Portfolio seeks high total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -6.79% net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the JP Morgan EMBI Global Bond Index/JP Morgan GBI-EM Global Diversified Bond Index (the "Index"), which returned -5.72%.

Factors Affecting Performance

• 2014 ended much as it began, with a pessimistic cloud hanging over financial markets. The downtrend in performance, most evident in emerging market (EM) currencies, was kicked off by the "taper tantrum" of the summer of 2013, which triggered outflows on concerns of external funding vulnerability, and culminated with growth concerns in China and a geopolitical crisis where Russia annexed the Crimean peninsula from Ukraine. Subsequently, attractive valuations, as well as the first hints of stabilization in externally vulnerable countries, brought inflows back to the asset class and supported a rebound in EM assets starting late in the first quarter of 2014. The continuation of the global carry trade, a strategy of borrowing at a low rate to invest at a higher rate, was supported by global central bank actions. Subdued inflation data provided room for the U.S. Federal Reserve (Fed) to maintain its lower-for-longer interest rate pledge, alleviating worries of a sudden start to the rate hike cycle. After projections indicated that it would fail to meet its 2% inflation target, the Bank of Japan (BOJ) announced that would enlarge its annual quantitative easing target from 60-70 trillion yen to 80 trillion yen. Disinflationary trends and signs of credit constraints prompted the European Central Bank (ECB) to cut policy rates into negative territory and begin to lay the groundwork to implement some form of quantitative easing. The rally in EM assets topped out in mid-to-late summer and began to fade as investors lost their appetite for risk after a flare-up in the conflict between Russia and Ukraine, disappointing global growth, and weakening commodity and energy prices threatened

the fiscal and current account balances of many emerging economies.

• EM domestic debt, as measured by the Index, lost -5.72% in U.S. dollars. After recovering ground lost in the early part of the first quarter of 2014, EM domestic debt hit its high point in late July before trending down through the later part of the year, with the sharpest move occurring in December, driven primarily by Russian weakness. Although U.S. dollar returns were negative for the period, in local currency terms, EM domestic debt returned +8.18% and every country but Russia posted positive performance, driven by income and capital appreciation.⁽ⁱ⁾ Russia's bonds, the sole exception in 2014, fell -16.70% in local currency terms. EM currencies in aggregate were weaker versus the U.S. dollar, falling -13.89%, with Russia once again being the worst performer. The Russian ruble dropped -37.68% versus the U.S. dollar. Contributing to weaker EM currencies were the drop in commodity, especially energy, prices and a stronger U.S. dollar driven by the relative outperformance of the U.S. economy. EM domestic debt had net outflows of -$2.8 billion in 2014 according to JP Morgan data, the first annual drop since the start of the data tracking in 2004.

• Contributing to the Portfolio's relative performance in 2014 were overweight duration positions in Hungary, Romania, and Thailand. Also contributing to relative performance were underweight duration and currency positions in Colombia, Poland, and Nigeria, as well as security selection in Mexico. In aggregate, the use of currency forwards was beneficial to performance in the period.

• The Portfolio's underweight duration and currency positions in Indonesia and Turkey detracted from relative performance in the year. Also detracting from relative performance were positioning in Russian duration and currency, overweight duration positions in Brazil and Peru, as well as an underweight duration position in South Africa.

⁽ⁱ⁾ Source for market data: JP Morgan

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Emerging Markets Domestic Debt Portfolio

Management Strategies

• We expect policy makers in the developed markets (DM), primarily the U.S. and the U.K., to continue their steady withdrawal of monetary stimulus, in sync with a cyclical recovery in economic activity. While DM monetary tightening could continue to generate volatility in EM assets, faster DM growth should bode well for EM growth in the medium term. In addition, a continued dovish stance by the ECB, BOJ, and the central bank of China, may support EM economies and could partially offset the effects of a less accommodative U.S. monetary policy.

• The primary risks that we continue to monitor are the path of Chinese economic growth and policy, the continued weakness in commodity prices, the potential for rising interest rates in the U.S., and ongoing geopolitical events in Europe and the Middle East. The elections in Greece once again raised the possibility that Greece could exit the eurozone and the potential impacts could add to financial market volatility. A slowing China will likely continue to weigh on commodity prices and commodity-exporting economies, while, conversely, reducing fiscal and inflationary pressures on oil-importing countries. Such a scenario may provide opportunities to benefit from the diverging economic trajectories. Divergence in G3 (U.S., Japan and Europe) monetary policy path remains supportive of a long U.S. dollar bias.

• We believe 2015 may look remarkably similar to 2014, with macro and policy divergence being the main drivers of asset price performance. We expect EM sovereign debt to post solid returns in the medium term, and episodic setbacks, such as those experienced in the second half of 2014, are to be expected. We believe there may be selective opportunities to add to sovereign debt of countries with attractive valuations, comfortable external positions, or favorable growth prospects. We remain marginally cautious on domestic debt even after the broad-based weakness in EM currencies versus the U.S. dollar experienced over the past year, as the macroeconomic adjustment towards higher real rates and lower current account deficits has not reached its full conclusion. In this regard, we will be

watching policy makers closely to ensure that they recommit to prudent policies during this adjustment process.

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Emerging Markets Domestic Debt Portfolio

Performance Compared to the JP Morgan EMBI Global Bond Index / JP Morgan GBI-EM Global Diversified Bond Index⁽¹⁾ and the Lipper Emerging Markets Local Currency Debt Funds Average⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–6.79	%		1.10	%		4.37	%		7.90	%
JP Morgan EMBI Global Bond Index / JP Morgan GBI-EM Global Diversified Bond Index		–5.72			2.63			5.52			8.36
Lipper Emerging Markets Local Currency Debt Funds Average		–5.65			2.05			4.23			7.90
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		–7.15			0.83			4.09			7.85
Portfolio — Class A Shares with maximum 4.25% sales charges⁽⁵⁾		–11.09			–0.04			3.62			7.60
JP Morgan EMBI Global Bond Index / JP Morgan GBI-EM Global Diversified Bond Index		–5.72			2.63			5.52			9.04
Lipper Emerging Markets Local Currency Debt Funds Average		–5.65			2.05			4.23			7.99
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		–7.39			0.41			—			1.54
JP Morgan EMBI Global Bond Index / JP Morgan GBI-EM Global Diversified Bond Index		–5.72			2.63			—			4.11
Lipper Emerging Markets Local Currency Debt Funds Average		–5.65			2.05			—			3.14
Portfolio — Class IS Shares w/o sales charges⁽⁷⁾		–6.79			—			—			–6.22
JP Morgan EMBI Global Bond Index / JP Morgan GBI-EM Global Diversified Bond Index		–5.72			—			—			–4.45
Lipper Emerging Markets Local Currency Debt Funds Average		–5.65			—			—			–4.36

⁽¹⁾ The JP Morgan EMBI Global Bond Index / JP Morgan GBI-EM Global Diversified Bond Index is a custom index represented by performance of the JP Morgan EMBI Global Bond Index (which tracks the performance U.S. dollar — denominated debt instruments issued by emerging markets) for periods from the Portfolio's inception to September 30, 2007 and the JP Morgan GBI-EM Global Diversified Bond Index (which tracks local currency government bonds issued by emerging markets) for periods thereafter. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Emerging Markets Local Currency Debt Funds Average tracks the performance of all funds in the Lipper Emerging Markets Local Currency Debt Funds classification. The Average, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. As of the date of this report, the Portfolio is in the Lipper Emerging Markets Local Currency Debt Funds classification.

⁽⁴⁾ Commenced operations on February 1, 1994

⁽⁵⁾ Commenced offering on January 2, 1996

⁽⁶⁾ Commenced offering on June 16, 2008

⁽⁷⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Emerging Markets Domestic Debt Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (96.7%)
Brazil (10.2%)
Sovereign (10.2%)
Brazil Notas do Tesouro Nacional, Series F, 10.00%, 1/1/17 - 1/1/25	BRL	4,316	$	1,395
Colombia (5.8%)
Sovereign (5.8%)
Colombia Government International Bond,
4.38%, 3/21/23	COP	684,000		254
9.85%, 6/28/27		552,000		292
12.00%, 10/22/15		300,000		133
Financiera de Desarrollo Territorial SA Findeter,
7.88%, 8/12/24 (a)		255,000		109
				788
Hungary (6.0%)
Sovereign (6.0%)
Hungary Government Bond,
5.50%, 6/24/25	HUF	47,500		210
6.00%, 11/24/23		111,030		505
Hungary Government International Bond,
5.38%, 2/21/23		102		110
				825
Indonesia (8.5%)
Sovereign (8.5%)
Barclays Bank PLC, Republic of Indonesia Government Bond, Credit Linked Notes,
9.00%, 9/19/18 (a)	IDR	8,000,000		670
Deutsche Bank AG, Republic of Indonesia Government Bond, Credit Linked Notes,
11.00%, 12/15/20 (a)(b)		5,300,000		491
				1,161
Malaysia (8.2%)
Sovereign (8.2%)
Malaysia Government Bond,
3.17%, 7/15/16	MYR	2,000		569
3.81%, 2/15/17		1,947		559
				1,128
Mexico (10.1%)
Sovereign (10.1%)
Mexican Bonos,
8.50%, 11/18/38	MXN	1,335		112
Petroleos Mexicanos(Units),
7.65%, 11/24/21 (a)(c)		17,570		1,274
				1,386
Peru (1.8%)
Sovereign (1.8%)
Peru Government Bond(Units),
8.60%, 8/12/17 (c)	PEN	352		132
Peruvian Government International Bond(Units),
5.70%, 8/12/24 (a)(c)		290		97
8.20%, 8/12/26 (c)		46		19
				248

	Face Amount (000)		Value (000)
Poland (9.7%)
Sovereign (9.7%)
Poland Government Bond,
3.75%, 4/25/18	PLN	666	$	198
4.00%, 10/25/23		480		153
5.75%, 10/25/21		2,845		977
				1,328
Romania (3.4%)
Sovereign (3.4%)
Romania Government Bond,
4.75%, 2/24/25	RON	510		151
5.85%, 4/26/23		1,000		314
				465
Russia (4.2%)
Sovereign (4.2%)
Russian Federal Bond - OFZ,
6.20%, 1/31/18	RUB	24,922		324
6.80%, 12/11/19		7,600		92
7.00%, 8/16/23		13,747		153
				569
South Africa (9.9%)
Sovereign (9.9%)
South Africa Government Bond,
6.75%, 3/31/21	ZAR	2,800		232
7.25%, 1/15/20		3,250		278
8.00%, 1/31/30		10,000		840
				1,350
Thailand (7.2%)
Sovereign (7.2%)
Thailand Government Bond,
3.63%, 6/16/23	THB	30,130		984
Turkey (11.7%)
Corporate Bond (2.7%)
Turkiye Garanti Bankasi AS,
7.38%, 3/7/18 (a)	TRY	960		370
Sovereign (9.0%)
Turkey Government Bond,
7.10%, 3/8/23		365		149
9.00%, 1/27/16 - 7/24/24		2,290		1,025
Turkey Government International Bond,
7.00%, 6/5/20	$	54		63
				1,237
				1,607
Total Fixed Income Securities (Cost $14,990)				13,234
	No. of Warrants
Warrants (0.0%)
Venezuela (0.0%)
Venezuela Government International Bond, Oil-Linked Payment Obligation, expires 4/15/20 (b)(d) (Cost $—)		495		5

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Emerging Markets Domestic Debt Portfolio

	Shares		Value (000)
Short-Term Investment (0.2%)
Investment Company (0.2%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $32)		32,239	$	32
Total Investments (96.9%) (Cost $15,022) (e)				13,271
Other Assets in Excess of Liabilities (3.1%)				419
Net Assets (100.0%)			$	13,690

(a) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(b) Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on December 31, 2014.

(d) Security has been deemed illiquid at December 31, 2014.

(e) Securities are available for collateral in connection with open foreign currency forward exchange contracts.

OFZ Obilgatsyi Federal'novo Zaima (Russian Federal Loan Obligation)

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at December 31, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
JPMorgan Chase Bank NA	BRL	300	$	113	1/5/15	USD	112	$	112	$	(1	)
JPMorgan Chase Bank NA	BRL	300		113	1/5/15	USD	113		113		—	@
JPMorgan Chase Bank NA	USD	113		113	1/5/15	BRL	300		113		—	@
JPMorgan Chase Bank NA	USD	113		113	1/5/15	BRL	300		113		(—	@)
JPMorgan Chase Bank NA	HUF	44,000		168	1/9/15	USD	178		178		10
JPMorgan Chase Bank NA	USD	38		38	1/9/15	HUF	9,500		36		(2	)
JPMorgan Chase Bank NA	TRY	530		227	1/16/15	USD	222		222		(5	)
JPMorgan Chase Bank NA	USD	65		65	1/16/15	COP	155,200		66		1
JPMorgan Chase Bank NA	BRL	400		149	2/3/15	USD	149		149		(—	@)
			$	1,099				$	1,102	$	3

BRL — Brazilian Real

COP — Colombian Peso

HUF — Hungarian Forint

IDR — Indonesian Rupiah

MXN — Mexican Peso

MYR — Malaysian Ringgit

PEN — Peruvian Nuevo Sol

PLN — Polish Zloty

RON — Romanian New Leu

RUB — Russian Ruble

THB — Thai Baht

TRY — Turkish Lira

USD — United States Dollar

ZAR — South African Rand

@ Value is less than $500.

Portfolio Composition

Classification	Percentage of Total Investments
Sovereign		96.9	%
Other*		3.1
Total Investments		100.0	%**

** Industries and/or investment types representing less than 5% of total investments.

** Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $3,000.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Domestic Debt Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $14,990)	$	13,239
Investment in Security of Affiliated Issuer, at Value (Cost $32)		32
Total Investments in Securities, at Value (Cost $15,022)		13,271
Foreign Currency, at Value (Cost $8)		8
Interest Receivable		386
Tax Reclaim Receivable		45
Due from Adviser		19
Receivable for Variation Margin on Futures Contracts		16
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		11
Receivable from Affiliate		—	@
Receivable for Portfolio Shares Sold		—	@
Other Assets		30
Total Assets		13,786
Liabilities:
Payable for Professional Fees		50
Payable for Portfolio Shares Redeemed		11
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		8
Payable for Directors' Fees and Expenses		7
Payable for Custodian Fees		4
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Other Liabilities		9
Total Liabilities		96
Net Assets	$	13,690
Net Assets Consist Of:
Paid-in-Capital	$	20,403
Accumulated Net Investment Loss		(1,753	)
Accumulated Net Realized Loss		(3,187	)
Unrealized Appreciation (Depreciation) on:
Investments		(1,751	)
Foreign Currency Forward Exchange Contracts		3
Foreign Currency Translations		(25	)
Net Assets	$	13,690

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Domestic Debt Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	11,195
Shares Outstanding $0.003 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,117,824
Net Asset Value, Offering and Redemption Price Per Share	$	10.01
CLASS A:
Net Assets	$	1,473
Shares Outstanding $0.003 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		143,579
Net Asset Value, Redemption Price Per Share	$	10.26
Maximum Sales Load		4.25	%
Maximum Sales Charge	$	0.46
Maximum Offering Price Per Share	$	10.72
CLASS L:
Net Assets	$	1,013
Shares Outstanding $0.003 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		101,166
Net Asset Value, Offering and Redemption Price Per Share	$	10.02
CLASS IS:
Net Assets	$	9
Shares Outstanding $0.003 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		907
Net Asset Value, Offering and Redemption Price Per Share	$	10.02

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Domestic Debt Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	1,305
Dividends from Securities of Unaffiliated Issuers		3
Dividends from Security of Affiliated Issuer (Note G)		—	@
Income from Securities Loaned — Net		—	@
Total Investment Income		1,308
Expenses:
Advisory Fees (Note B)		153
Professional Fees		128
Custodian Fees (Note F)		33
Registration Fees		31
Shareholder Reporting Fees		22
Administration Fees (Note C)		16
Shareholder Services Fees — Class A (Note D)		7
Distribution and Shareholder Services Fees — Class L (Note D)		9
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Sub Transfer Agency Fees		3
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class L		1
Pricing Fees		6
Directors' Fees and Expenses		2
Other Expenses		17
Total Expenses		441
Waiver of Advisory Fees (Note B)		(153	)
Expenses Reimbursed by Adviser (Note B)		(87	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		192
Net Investment Income		1,116
Realized Gain (Loss):
Investments Sold		(3,286	)
Foreign Currency Forward Exchange Contracts		(13	)
Foreign Currency Transactions		(110	)
Futures Contracts		28
Net Realized Loss		(3,381	)
Change in Unrealized Appreciation (Depreciation):
Investments		1,117
Foreign Currency Forward Exchange Contracts		19
Foreign Currency Translations		(12	)
Futures Contracts		(122	)
Net Change in Unrealized Appreciation (Depreciation)		1,002
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(2,379	)
Net Decrease in Net Assets Resulting from Operations	$	(1,263	)

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Domestic Debt Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,116		$	2,609
Net Realized Loss		(3,381	)		(2,694	)
Net Change in Unrealized Appreciation (Depreciation)		1,002			(7,291	)
Net Decrease in Net Assets Resulting from Operations		(1,263	)		(7,376	)
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(789	)
Net Realized Gain		—			(444	)
Paid-in-Capital		—			(233	)
*Class A:**
Net Investment Income		—			(86	)
Net Realized Gain		—			(48	)
Paid-in-Capital		—			(41	)
*Class H:**
Net Investment Income		—			(29	)**
Net Realized Gain		—			(26	)**
Class L:
Net Investment Income		—			(54	)
Net Realized Gain		—			(39	)
Paid-in-Capital		—			(21	)
Class IS:
Net Investment Income		—			(—	@)***
Paid-in-Capital		—			(—	@)***
Total Distributions		—			(1,810	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		722			9,531
Distributions Reinvested		—			946
Redeemed		(14,209	)		(26,242	)
*Class A:**
Subscribed		169			585
Distributions Reinvested		—			172
Conversion from Class H		—			2,444
Redeemed		(4,554	)		(2,034	)
*Class H:**
Distributions Reinvested		—			55	**
Conversion to Class A		—			(2,444	)**
Redeemed		—			(223	)**
Class L:
Subscribed		54			254
Distributions Reinvested		—			114
Redeemed		(1,974	)		(1,290	)
Class IS:
Subscribed		—			10	***
Net Decrease in Net Assets Resulting from Capital Share Transactions		(19,792	)		(18,122	)
Redemption Fees		—			3
Total Decrease in Net Assets		(21,055	)		(27,305	)
Net Assets:
Beginning of Period		34,745			62,050
End of Period (Including Accumulated Net Investment Loss and Distributions in Excess of Net Investment Income of $(1,753) and $(953), respectively.)	$	13,690		$	34,745

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets Domestic Debt Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		67			760
Shares Issued on Distributions Reinvested		—			82
Shares Redeemed		(1,336	)		(2,281	)
Net Decrease in Class I Shares Outstanding		(1,269	)		(1,439	)
*Class A:**
Shares Subscribed		15			48
Shares Issued on Distributions Reinvested		—			15
Conversion from Class H		—			220
Shares Redeemed		(420	)		(171	)
Net Increase (Decrease) in Class A Shares Outstanding		(405	)		112
*Class H:**
Shares Issued on Distributions Reinvested		—			4	**
Conversion to Class A		—			(220	)**
Shares Redeemed		—			(17	)**
Net Decrease in Class H Shares Outstanding		—			(233	)
Class L:
Shares Subscribed		5			19
Shares Issued on Distributions Reinvested		—			10
Shares Redeemed		(181	)		(115	)
Net Decrease in Class L Shares Outstanding		(176	)		(86	)
Class IS:
Shares Subscribed		—			1	***

@ Amount is less than $500.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Domestic Debt Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	10.75		$	12.71		$	11.23		$	12.44		$	12.15
Income (Loss) from Investment Operations:
Net Investment Income†		0.60			0.61			0.65			0.64			0.87
Net Realized and Unrealized Gain (Loss)		(1.34	)		(2.18	)		1.22			(1.07	)		0.92
Total from Investment Operations		(0.74	)		(1.57	)		1.87			(0.43	)		1.79
Distributions from and/or in Excess of:
Net Investment Income		—			(0.20	)		(0.39	)		(0.64	)		(0.93	)
Net Realized Gain		—			(0.12	)		(0.00	)‡		(0.14	)		(0.57	)
Paid-in-Capital		—			(0.07	)		—			—			—
Total Distributions		—			(0.39	)		(0.39	)		(0.78	)		(1.50	)
Redemption Fees		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	10.01		$	10.75		$	12.71		$	11.23		$	12.44
Total Return++		(6.79	)%		(12.54	)%		16.89	%		(3.66	)%		15.07	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11,195		$	25,669		$	48,641		$	69,557		$	28,864
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.85	%+		0.84	%+		0.84	%+		0.83	%+		0.84	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.84	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		5.59	%+		5.08	%+		5.40	%+		5.21	%+		7.12	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.01	%		0.02	%		0.01	%
Portfolio Turnover Rate		102	%		117	%		84	%		85	%		109	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.05	%		1.39	%		1.18	%		1.19	%		1.29	%+
Net Investment Income to Average Net Assets		4.39	%		4.53	%		5.06	%		4.85	%		6.67	%+

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Domestic Debt Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	11.05		$	13.06		$	11.54		$	12.76		$	12.42
Income (Loss) from Investment Operations:
Net Investment Income†		0.57			0.60			0.64			0.63			0.86
Net Realized and Unrealized Gain (Loss)		(1.36	)		(2.24	)		1.25			(1.10	)		0.94
Total from Investment Operations		(0.79	)		(1.64	)		1.89			(0.47	)		1.80
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		(0.37	)		(0.61	)		(0.89	)
Net Realized Gain		—			(0.12	)		(0.00	)‡		(0.14	)		(0.57	)
Paid-in-Capital		—			(0.07	)		—			—			—
Total Distributions		—			(0.37	)		(0.37	)		(0.75	)		(1.46	)
Redemption Fees		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	10.26		$	11.05		$	13.06		$	11.54		$	12.76
Total Return++		(7.15	)%		(12.76	)%		16.56	%		(3.90	)%		14.88	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,473		$	6,065		$	5,712		$	6,784		$	6,792
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.20	%+		1.13	%+^		1.09	%+		1.08	%+		1.09	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.09	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		5.12	%+		4.91	%+		5.15	%+		4.96	%+		6.87	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.01	%		0.02	%		0.01	%
Portfolio Turnover Rate		102	%		117	%		84	%		85	%		109	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.40	%		1.72	%		1.43	%		1.44	%		1.54	%+
Net Investment Income to Average Net Assets		3.92	%		4.32	%		4.81	%		4.60	%		6.42	%+

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.10% for Class A shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Domestic Debt Portfolio

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	10.82		$	12.80		$	11.33		$	12.54		$	12.24
Income (Loss) from Investment Operations:
Net Investment Income†		0.52			0.55			0.57			0.55			0.79
Net Realized and Unrealized Gain (Loss)		(1.32	)		(2.19	)		1.22			(1.07	)		0.92
Total from Investment Operations		(0.80	)		(1.64	)		1.79			(0.52	)		1.71
Distributions from and/or in Excess of:
Net Investment Income		—			(0.15	)		(0.32	)		(0.55	)		(0.84	)
Net Realized Gain		—			(0.12	)		(0.00	)‡		(0.14	)		(0.57	)
Paid-in-Capital		—			(0.07	)		—			—			—
Total Distributions		—			(0.34	)		(0.32	)		(0.69	)		(1.41	)
Redemption Fees		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	10.02		$	10.82		$	12.80		$	11.33		$	12.54
Total Return++		(7.39	)%		(13.00	)%		15.99	%		(4.34	)%		14.18	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,013		$	3,001		$	4,648		$	4,965		$	4,668
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.45	%+		1.40	%+^^		1.59	%+		1.58	%+		1.59	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.59	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		4.85	%+		4.55	%+		4.65	%+		4.46	%+		6.37	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.01	%		0.02	%		0.01	%
Portfolio Turnover Rate		102	%		117	%		84	%		85	%		109	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.66	%		1.95	%		1.93	%		1.94	%		2.04	%+
Net Investment Income to Average Net Assets		3.64	%		4.00	%		4.31	%		4.10	%		5.92	%+

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.45% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.35% for Class L shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets Domestic Debt Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	10.75		$	11.02
Income (Loss) from Investment Operations:
Net Investment Income†		0.63			0.19
Net Realized and Unrealized Loss		(1.36	)		(0.33	)
Total from Investment Operations		(0.73	)		(0.14	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)
Paid-in-Capital		—			(0.07	)
Total Distributions		—			(0.13	)
Redemption Fees		—			0.00	‡
Net Asset Value, End of Period	$	10.02		$	10.75
Total Return++		(6.79	)%		(1.30	)%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	9		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.82	%+		0.82	%+^^*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		5.82	%+		5.55	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§*
Portfolio Turnover Rate		102	%		117	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		21.78	%		6.94	%*
Net Investment Loss to Average Net Assets		(15.14	)%		(0.57	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.82% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Emerging Markets Domestic Debt Portfolio. The Portfolio seeks high total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (2) an equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (3) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (4) futures are valued at the latest price published

by the commodities exchange on which they trade; (5) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (8) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

The Portfolio holds a significant portion of its investments in securities which are traded by a small number of market makers who may also be utilized by the Portfolio to provide pricing information used to value such investments. The amounts realized upon disposition of these securities may differ from the value reflected on the Statement of Assets and Liabilities.

(unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	370	$	—	$	370
Sovereign		—		12,864		—		12,864
Total Fixed Income Securities		—		13,234		—		13,234
Warrants		—		5		—		5
Short-Term Investment
Investment Company		32		—		—		32
Foreign Currency Forward Exchange Contracts		—		11		—		11
Total Assets		32		13,250		—		13,282

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Liabilities:
Foreign Currency Forward Exchange Contracts	$	—	$	(8	)	$	—	$	(8	)
Total	$	32	$	13,242		$	—	$	13,274

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition

of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of December 31, 2014, the Portfolio did not have any open futures contracts.

The following tables set forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Appreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Depreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

)

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(13	)
Interest Rate Risk	Futures Contracts		28
Total		$	15
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	19
Interest Rate Risk	Futures Contracts		(122	)
Total		$	(103	)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	11	$	(8	)

(a) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	11	$	(8	)	$	—	$	3
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	8	$	(8	)	$	—	$	0

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	284,000
Futures Contracts:
Average monthly original value	$	839,000

6. Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to

earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

At December 31, 2014, the Portfolio did not have any outstanding securities on loan.

7. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares and Class IS shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

8. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

9. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

10. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $500 million				Next $500 million				Over $1 billion
	0.75	%			0.70	%			0.65	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $153,000 of advisory fees were waived and approximately $95,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $19,997,000 and $37,322,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	1,112			$	15,665			$	16,745			$	—	@		$	32

@ Amount is less than $500.

compensation obligation and do not affect the net asset value of the Portfolio.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)		Paid-in- Capital (000)
$	—	$	—	$	958	$	557	$	295

Temporary differences are primarily due to differing book and tax treatments in the timing of the recognition of gains (losses)

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Net Investment Loss (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	(1,916	)		$	2,314			$	(398	)

At December 31, 2014, the Portfolio had no distributable earnings on a tax basis.

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $15,396,000. The aggregate gross unrealized appreciation is approximately $90,000 and the aggregate gross unrealized depreciation is approximately $2,215,000 resulting in net unrealized depreciation of approximately $2,125,000.

At December 31, 2014, the Portfolio had available unused short-term capital losses of approximately $870,000 and long-term capital losses of approximately $2,211,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	1,467			$	—

I. Other (unaudited): Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, including Russia, ownership of shares is defined according to entries in the issuer's share register. In Russia, currently no central registration system exists and the share reg-

istrars may not be subject to effective state supervision. It is possible that a Portfolio could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a counterparty's failure to complete the transaction.

At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 64%, 32% and 20%, for Class I, Class A and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets Domestic Debt Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Emerging Markets Domestic Debt Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Emerging Markets Domestic Debt Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIEMDANN
1112688 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Growth Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					28
Federal Tax Notice					29
U.S. Privacy Policy					30
Director and Officer Information					33

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Growth Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Growth Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Growth Portfolio Class I	$	1,000.00	$	1,035.10	$	1,021.58	$	3.69	$	3.67		0.72	%
Growth Portfolio Class A		1,000.00		1,034.50		1,020.97		4.31		4.28		0.84
Growth Portfolio Class L		1,000.00		1,032.00		1,018.55		6.76		6.72		1.32
Growth Portfolio Class IS		1,000.00		1,036.30		1,022.48		2.77		2.75		0.54

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Growth Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of large capitalization companies.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 6.42%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the Russell 1000® Growth Index (the "Index"), which returned 13.05%.

Factors Affecting Performance

• Large-cap growth stocks, as measured by the Index, gained 13.05% for the period. Leading the Index's performance was the health care sector, followed by the utilities and information technology (IT) sectors. The energy sector was the weakest performer and the only Index sector with a negative return, as oil prices suffered a surprisingly strong decline in 2014 due to the combination of a supply glut and slackening global demand.

• A notable event during the period was a widespread sell-off in high growth and high valuation multiple stocks that began in March and continued on through April. Generally, we believe the sell-off was not due to company-specific fundamentals but rather driven by a broad rotation out of such names. Although the share prices of several of the Portfolio's holdings (IT stocks, in particular) took a hit during this downturn, these companies' fundamentals remained largely robust. Overall, we used the sell-off as an opportunity to trade up the Portfolio

in quality, and we remain optimistic about the long-term outlook for the companies owned.

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• Stock selection in the consumer discretionary sector was the largest detractor from relative performance. The Portfolio held an e-commerce giant that saw its share price pressured during the general sell-off in high growth, high multiple stocks in early 2014. In addition, the company's results have fallen short of analysts' high expectations. However, we believe its near-term profitability concerns may be transitory and remain attracted to the company over the long term.

• The IT sector also lagged due to stock selection. The Portfolio's second-largest detractor was a position in a global microblogging platform that saw its share price tumble after disappointing analysts' very high expectations. We are monitoring the company's situation and continue to believe in its long-term prospects.

• An overweight position and stock selection in the health care sector added to returns. The second largest contributor to the Portfolio's overall performance during the period was a leader in genetic testing and analysis, whose stock price has benefited from its progress toward lowering the cost of genome mapping. The Portfolio's third largest contributor was a surgical robotics systems maker, which performed well after it saw a surprising increase in procedure growth and shipments of a recently updated product.

• The Portfolio's significant underweight position in energy, the worst-performing sector during the period, also benefited relative performance. The Portfolio held only one energy stock, which was sold during the period.

Management Strategies

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Growth Portfolio

risk/reward. We find these companies through intense fundamental research. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the Russell 1000^® Growth Index⁽¹⁾ and the Lipper Large-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		6.42	%		16.91	%		10.01	%		10.36	%
Russell 1000^® Growth Index		13.05			15.81			8.49			8.77
Lipper Large-Cap Growth Funds Index		10.34			14.12			7.37			8.08
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		6.25			16.63			9.75			9.09
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		0.68			15.38			9.16			8.78
Russell 1000^® Growth Index		13.05			15.81			8.49			7.69
Lipper Large-Cap Growth Funds Index		10.34			14.12			7.37			6.73
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		5.72			—			—			16.19
Russell 1000^® Growth Index		13.05			—			—			16.67
Lipper Large-Cap Growth Funds Index		10.34			—			—			15.76
Portfolio — Class IS Shares w/o sales charges⁽⁷⁾		6.60			—			—			17.91
Russell 1000^® Growth Index		13.05			—			—			19.13
Lipper Large-Cap Growth Funds Index		10.34			—			—			17.58

⁽¹⁾ The Russell 1000^® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000^® Index is an index of approximately 1,000 of the largest U.S. companies based on a combination of market capitalization and current index membership. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Large-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Large-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Large-Cap Growth Funds classification.

⁽³⁾ Total returns for the Portfolio reflect fees waived and expenses reimbursed, if applicable, by the Adviser. Without such waivers and reimbursements, total returns would have been lower. The fee waivers and/or expense reimbursements will continue for at least two years from the date of the Reorganization (defined herein) or until such time as the Fund's Board of Directors acts to discontinue all or a portion of such waivers and/or expense reimbursements when it deems that such action is appropriate.

⁽⁴⁾ Commenced operations on April 2, 1991.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Growth Portfolio

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on April 27, 2012.

⁽⁷⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Growth Portfolio

	Shares		Value (000)
Common Stocks (94.1%)
Automobiles (3.2%)
Tesla Motors, Inc. (a)		489,497	$	108,869
Biotechnology (3.2%)
Alexion Pharmaceuticals, Inc. (a)		98,706		18,264
Alnylam Pharmaceuticals, Inc. (a)		163,317		15,842
Gilead Sciences, Inc. (a)		557,513		52,551
Regeneron Pharmaceuticals, Inc. (a)		50,233		20,608
				107,265
Chemicals (1.8%)
Monsanto Co.		525,584		62,792
Diversified Financial Services (3.5%)
McGraw Hill Financial, Inc.		958,387		85,277
MSCI, Inc.		676,968		32,116
				117,393
Electrical Equipment (0.5%)
SolarCity Corp. (a)(b)		318,393		17,028
Food & Staples Retailing (1.5%)
Costco Wholesale Corp.		368,896		52,291
Food Products (5.4%)
Keurig Green Mountain, Inc.		681,401		90,214
Mead Johnson Nutrition Co.		925,444		93,044
				183,258
Health Care Equipment & Supplies (4.5%)
Intuitive Surgical, Inc. (a)		289,128		152,931
Health Care Technology (1.0%)
athenahealth, Inc. (a)		239,301		34,866
Hotels, Restaurants & Leisure (2.1%)
Starbucks Corp.		851,644		69,877
Information Technology Services (4.6%)
Mastercard, Inc., Class A		865,438		74,566
Visa, Inc., Class A		307,233		80,557
				155,123
Insurance (1.9%)
Progressive Corp. (The)		2,428,622		65,549
Internet & Catalog Retail (12.3%)
Amazon.com, Inc. (a)		767,377		238,155
JD.com, Inc. ADR (China) (a)		1,387,244		32,101
Netflix, Inc. (a)		88,209		30,133
Priceline Group, Inc. (a)		102,739		117,144
				417,533
Internet Software & Services (22.9%)
Alibaba Group Holding Ltd. ADR (China) (a)		566,796		58,913
eBay, Inc. (a)		621,088		34,856
Facebook, Inc., Class A (a)		3,407,682		265,867
Google, Inc., Class A (a)		145,838		77,390
Google, Inc., Class C (a)		239,423		126,032
LinkedIn Corp., Class A (a)		482,577		110,853
Twitter, Inc. (a)		2,889,597		103,650
				777,561

	Shares		Value (000)
Life Sciences Tools & Services (5.2%)
Illumina, Inc. (a)		949,746	$	175,304
Media (2.2%)
Legend Pictures LLC Ltd. (a)(c)(d)(e) (acquisition cost — $20,782; acquired 10/15/14)		9,806		20,513
Naspers Ltd., Class N (South Africa)		433,063		55,756
				76,269
Pharmaceuticals (3.0%)
Valeant Pharmaceuticals International, Inc. (Canada) (a)		722,557		103,405
Professional Services (1.0%)
Verisk Analytics, Inc., Class A (a)		527,734		33,801
Semiconductors & Semiconductor Equipment (1.0%)
ARM Holdings PLC ADR (United Kingdom)		701,783		32,493
Software (7.7%)
FireEye, Inc. (a)		687,314		21,705
Salesforce.com, Inc. (a)		1,778,619		105,490
Splunk, Inc. (a)		590,922		34,835
Workday, Inc., Class A (a)		1,241,843		101,347
				263,377
Tech Hardware, Storage & Peripherals (3.3%)
Apple, Inc.		1,016,925		112,248
Textiles, Apparel & Luxury Goods (2.3%)
Michael Kors Holdings Ltd. (a)		1,064,663		79,956
Total Common Stocks (Cost $1,861,064)				3,199,189
Preferred Stocks (1.7%)
Internet & Catalog Retail (1.5%)
Airbnb, Inc. Series D (a)(c)(d)(e) (acquisition cost — $20,639; acquired 4/16/14)		506,928		25,554
Flipkart Online Services Pvt Ltd. Series F (a)(c)(d)(e) (acquisition cost — $15,000; acquired 8/18/14)		207,900		24,898
				50,452
Internet Software & Services (0.2%)
Dropbox, Inc. Series C (a)(c)(d)(e) (acquisition cost — $7,182; acquired 1/30/14)		375,979		7,182
Total Preferred Stocks (Cost $42,821)				57,634
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		625,443,924		1,069
USD/CNY November 2015 @ CNY 6.65		542,337,450		2,749
Total Call Options Purchased (Cost $3,519)				3,818

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Growth Portfolio

	Shares		Value (000)
Short-Term Investments (5.0%)
Securities held as Collateral on Loaned Securities (0.5%)
Investment Company (0.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		14,639,257	$	14,639
	Face Amount (000)
Repurchase Agreement (0.1%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $1,396; fully collateralized by various U.S. Government obligations; 2.13% - 4.25% due 1/31/21 - 11/15/40; valued at $1,424)	$	1,397		1,397
Total Securities held as Collateral on Loaned Securities (Cost $16,036)				16,036
	Shares
Investment Company (4.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $153,157)		153,157,009		153,157
Total Short-Term Investments (Cost $169,193)				169,193
Total Investments (100.9%) (Cost $2,076,597) Including $17,028 of Securities Loaned (f)				3,429,834
Liabilities in Excess of Other Assets (-0.9%)				(31,111	)
Net Assets (100.0%)			$	3,398,723

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2014.

(c) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $78,147,000, representing 2.3% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(d) Security has been deemed illiquid at December 31, 2014.

(e) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at December 31, 2014 amounts to approximately $78,147,000 and represents 2.3% of net assets.

(f) The approximate fair value and percentage of net assets, $55,756,000 and 1.6%, respectively, represent the security that has been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		46.8	%
Internet Software & Services		22.8
Internet & Catalog Retail		12.2
Software		7.7
Food Products		5.4
Life Sciences Tools & Services		5.1
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Growth Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $1,908,801)	$	3,262,038
Investment in Security of Affiliated Issuer, at Value (Cost $167,796)		167,796
Total Investments in Securities, at Value (Cost $2,076,597)		3,429,834
Cash		1,476
Receivable for Portfolio Shares Sold		919
Dividends Receivable		690
Tax Reclaim Receivable		493
Receivable from Affiliate		13
Other Assets		130
Total Assets		3,433,555
Liabilities:
Collateral on Securities Loaned, at Value		17,512
Payable for Portfolio Shares Redeemed		7,335
Due to Broker		4,550
Payable for Advisory Fees		3,718
Payable for Sub Transfer Agency Fees — Class I		534
Payable for Sub Transfer Agency Fees — Class A		121
Payable for Sub Transfer Agency Fees — Class L		16
Payable for Shareholder Services Fees — Class A		333
Payable for Distribution and Shareholder Services Fees — Class L		58
Payable for Administration Fees		232
Payable for Transfer Agency Fees — Class I		12
Payable for Transfer Agency Fees — Class A		106
Payable for Transfer Agency Fees — Class L		8
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Directors' Fees and Expenses		57
Payable for Professional Fees		51
Payable for Custodian Fees		20
Other Liabilities		169
Total Liabilities		34,832
Net Assets	$	3,398,723
Net Assets Consist Of:
Paid-in-Capital	$	2,018,316
Accumulated Net Investment Loss		(1,417	)
Accumulated Net Realized Gain		28,587
Unrealized Appreciation (Depreciation) on:
Investments		1,353,237
Net Assets	$	3,398,723

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Growth Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	794,648
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		20,449,982
Net Asset Value, Offering and Redemption Price Per Share	$	38.86
CLASS A:
Net Assets	$	1,549,756
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		40,803,856
Net Asset Value, Redemption Price Per Share	$	37.98
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	2.10
Maximum Offering Price Per Share	$	40.08
CLASS L:
Net Assets	$	89,854
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		2,402,789
Net Asset Value, Offering and Redemption Price Per Share	$	37.40
CLASS IS:
Net Assets	$	964,465
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		24,777,636
Net Asset Value, Offering and Redemption Price Per Share	$	38.92
⁽¹⁾ Including: Securities on Loan, at Value:	$	17,028

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Growth Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $550 of Foreign Taxes Withheld)	$	13,295
Income from Securities Loaned — Net		1,176
Dividends from Security of Affiliated Issuer (Note G)		70
Total Investment Income		14,541
Expenses:
Advisory Fees (Note B)		12,630
Shareholder Services Fees — Class A (Note D)		2,994
Distribution and Shareholder Services Fees — Class L (Note D)		487
Administration Fees (Note C)		2,274
Sub Transfer Agency Fees		81
Sub Transfer Agency Fees — Class I		1,159
Sub Transfer Agency Fees — Class A		185
Transfer Agency Fees (Note E)		55
Transfer Agency Fees — Class I (Note E)		36
Transfer Agency Fees — Class A (Note E)		273
Transfer Agency Fees — Class L (Note E)		17
Transfer Agency Fees — Class IS (Note E)		2
Shareholder Reporting Fees		272
Professional Fees		108
Custodian Fees (Note F)		100
Registration Fees		65
Directors' Fees and Expenses		56
Pricing Fees		4
Other Expenses		52
Total Expenses		20,850
Rebate from Morgan Stanley Affiliate (Note G)		(143	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(—	@)
Net Expenses		20,707
Net Investment Loss		(6,166	)
Realized Gain (Loss):
Investments Sold		202,554
Foreign Currency Transactions		(62	)
Net Realized Gain		202,492
Change in Unrealized Appreciation (Depreciation):
Investments		77,969
Foreign Currency Translations		(1	)
Net Change in Unrealized Appreciation (Depreciation)		77,968
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		280,460
Net Increase in Net Assets Resulting from Operations	$	274,294

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Growth Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(6,166	)	$	294
Net Realized Gain		202,492			61,055
Net Change in Unrealized Appreciation (Depreciation)		77,968			318,401
Net Increase in Net Assets Resulting from Operations		274,294			379,750
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(90	)		(3,204	)
Net Realized Gain		(37,793	)		(38,260	)
*Class A:**
Net Investment Income		—			(271	)
Net Realized Gain		(75,475	)		(8,167	)
*Class H:**
Net Investment Income		—			(—	@)**
Class L:
Net Investment Income		(24	)		(—	@)
Net Realized Gain		(4,426	)		(21	)
Class IS:
Net Investment Income		(171	)		—
Net Realized Gain		(45,091	)		(—	@)***
Total Distributions		(163,070	)		(49,923	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		456,631			109,005
Issued due to a tax-free reorganization		505,818			—
Distributions Reinvested		37,259			41,448
Redeemed		(1,255,645	)		(96,199	)
*Class A:**
Subscribed		152,431			34,865
Issued due to a tax-free reorganization		1,369,843			—
Distributions Reinvested		73,132			8,431
Conversion from Class H		—			145
Redeemed		(316,404	)		(32,015	)
*Class H:**
Subscribed		—			86	**
Distributions Reinvested		—			—	@**
Conversion to Class A		—			(145	)**
Class L:
Subscribed		6,137			454
Issued due to a tax-free reorganization		88,416			—
Distributions Reinvested		4,351			21
Redeemed		(13,153	)		(2	)
Class IS:
Subscribed		1,034,151			10	***
Distributions Reinvested		41,376			—
Redeemed		(92,318	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		2,092,025			66,104
Total Increase in Net Assets		2,203,249			395,931
Net Assets:
Beginning of Period		1,195,474			799,543
End of Period (Including (Accumulated Net Investment Loss) and Accumulated Undistributed Net Investment Income of $(1,417) and $267, respectively.)	$	3,398,723		$	1,195,474

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Growth Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		11,865			3,291
Shares Issued due to a tax-free reorganization		13,594			—
Shares Issued on Distributions Reinvested		999			1,140
Shares Redeemed		(31,791	)		(3,090	)
Net Increase (Decrease) in Class I Shares Outstanding		(5,333	)		1,341
*Class A:**
Shares Subscribed		3,977			1,031
Shares Issued due to a tax-free reorganization		37,592			—
Shares Issued on Distributions Reinvested		2,008			234
Conversion from Class H		—			4
Shares Redeemed		(8,231	)		(1,029	)
Net Increase in Class A Shares Outstanding		35,346			240
*Class H:**
Shares Subscribed		—			2	**
Shares Issued on Distributions Reinvested		—			—	@@**
Conversion to Class A		—			(4	)**
Net Increase (Decrease) in Class H Shares Outstanding		—			(2	)
Class L:
Shares Subscribed		163			13
Shares Issued due to a tax-free reorganization		2,453			—
Shares Issued on Distributions Reinvested		121			1
Shares Redeemed		(348	)		(—	@@)
Net Increase in Class L Shares Outstanding		2,389			14
Class IS:
Shares Subscribed		26,014			—	@@***
Shares Issued on Distributions Reinvested		1,108			—
Shares Redeemed		(2,345	)		—
Net Increase in Class IS Shares Outstanding		24,777			—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Growth Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	38.38		$	27.05		$	23.46		$	24.24		$	19.69
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.03	)		0.02			0.16			0.01			0.06
Net Realized and Unrealized Gain (Loss)		2.43			13.02			3.52			(0.73	)		4.49
Total from Investment Operations		2.40			13.04			3.68			(0.72	)		4.55
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)‡		(0.13	)		(0.05	)		(0.06	)		(0.00	)‡
Net Realized Gain		(1.92	)		(1.58	)		(0.04	)		—			—
Total Distributions		(1.92	)		(1.71	)		(0.09	)		(0.06	)		(0.00	)‡
Net Asset Value, End of Period	$	38.86		$	38.38		$	27.05		$	23.46		$	24.24
Total Return++		6.42	%		48.60	%		15.66	%		(3.01	)%		23.11	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	794,648		$	989,649		$	661,073		$	622,193		$	704,410
Ratio of Expenses to Average Net Assets⁽¹⁾		0.69	%+^		0.70	%+		0.72	%+		0.71	%+		0.73	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.73	%+
Ratio of Net Investment Income (Loss) to Average Net Assets⁽¹⁾		(0.08	)%+		0.08	%+		0.59	%+		0.05	%+		0.27	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		44	%		31	%		49	%		26	%		35	%
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			0.71	%		N/A			N/A			N/A
Net Investment Income to Average Net Assets		N/A			0.07	%		N/A			N/A			N/A

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^ Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.70% for Class I shares. Prior to April 7, 2014, the maximum ratio was 0.80% for Class I shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Growth Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	37.61		$	26.53		$	23.03		$	23.82		$	19.40
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.13	)		(0.06	)		0.09			(0.05	)		0.00	‡
Net Realized and Unrealized Gain (Loss)		2.42			12.78			3.45			(0.73	)		4.42
Total from Investment Operations		2.29			12.72			3.54			(0.78	)		4.42
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)		—			(0.01	)		(0.00	)‡
Net Realized Gain		(1.92	)		(1.58	)		(0.04	)		—			—
Total Distributions		(1.92	)		(1.64	)		(0.04	)		(0.01	)		(0.00	)‡
Net Asset Value, End of Period	$	37.98		$	37.61		$	26.53		$	23.03		$	23.82
Total Return++		6.25	%		48.22	%		15.36	%		(3.27	)%		22.79	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,549,756		$	205,286		$	138,416		$	135,777		$	136,585
Ratio of Expenses to Average Net Assets⁽¹⁾		0.83	%+^		0.95	%+^		0.97	%+		0.96	%+		0.98	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.98	%+
Ratio of Net Investment Income (Loss) to Average Net Assets⁽¹⁾		(0.34	)%+		(0.18	)%+		0.34	%+		(0.20	)%+		0.02	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		44	%		31	%		49	%		26	%		35	%
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			0.96	%		N/A			N/A			N/A
Net Investment Income (Loss) to Average Net Assets		N/A			(0.19	)%		N/A			N/A			N/A

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^ Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class A shares. Prior to April 7, 2014, the maximum ratio was 1.15% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.05% for Class A shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Growth Portfolio

	Class L
	Year Ended December 31,						Period from April 27, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	37.26		$	26.43		$	27.60
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.31	)		(0.38	)		0.03
Net Realized and Unrealized Gain (Loss)		2.38			12.84			(1.16	)
Total from Investment Operations		2.07			12.46			(1.13	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.05	)		(0.00	)‡
Net Realized Gain		(1.92	)		(1.58	)		(0.04	)
Total Distributions		(1.93	)		(1.63	)		(0.04	)
Net Asset Value, End of Period	$	37.40		$	37.26		$	26.43
Total Return++		5.72	%		47.44	%		(4.10	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	89,854		$	528		$	10
Ratio of Expenses to Average Net Assets⁽¹⁾		1.29	%+^^		1.60	%+^^		1.51	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets⁽¹⁾		(0.82	)%+		(1.09	)%+		0.20	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%*§		0.01	%		0.00	%*§
Portfolio Turnover Rate		44	%		31	%		49	%#
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.72	%		N/A
Net Investment Loss to Average Net Assets		N/A			(1.21	)%		N/A

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.55% for Class L shares. Prior to April 7, 2014, the maximum ratio was 1.65% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.55% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Growth Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	38.40		$	34.45
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.05	)		(0.02	)
Net Realized and Unrealized Gain		2.50			5.55
Total from Investment Operations		2.45			5.53
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		—
Net Realized Gain		(1.92	)		(1.58	)
Total Distributions		(1.93	)		(1.58	)
Net Asset Value, End of Period	$	38.92		$	38.40
Total Return++		6.60	%		16.20	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	964,465		$	11
Ratio of Expenses to Average Net Assets⁽¹⁾		0.54	%+^^		0.60	%+^^*
Ratio of Net Investment Loss to Average Net Assets⁽¹⁾		(0.12	)%+		(0.16	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%*
Portfolio Turnover Rate		44	%		31	%#
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		0.55	%		5.60	%*
Net Investment Loss to Average Net Assets		(0.13	)%		(5.16	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.67% for Class IS shares. Prior to April 7, 2014, the maximum ratio was 0.73% for Class IS shares.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Growth Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in growth oriented equity securities of large capitalization companies. Under normal market conditions, the Portfolio seeks to achieve its investment objective by investing primarily in established and emerging companies, with capitalizations within the range of companies included in the Russell 1000^® Growth Index. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

On April 7, 2014, the Portfolio acquired the net assets of Morgan Stanley Focus Growth Fund ("Focus Growth Fund"), an open-end investment company, based on the respective valuations as of the close of business on April 4, 2014, pursuant to a Plan of Reorganization approved by the shareholders of Focus Growth Fund on February 28, 2014 ("Reorganization"). The purpose of the transaction was to combine two portfolios managed by Morgan Stanley Investment Management Inc., (the "Adviser") with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 13,593,596 Class I shares of the Portfolio at a net asset value of $37.21 for 9,863,136 Class I shares of Focus Growth Fund; 37,591,749 Class A shares of the Portfolio at a net asset value of $36.44 per share for 27,362,441 Class A shares and 679,411 Class B shares of Focus Growth Fund; 2,453,264 Class L shares of the Portfolio at a net asset value of $36.04 for 2,096,775 Class L shares of Focus Growth Fund; The net assets of Focus Growth Fund before the Reorganization were approximately $1,964,077,000, including unrealized appreciation of approximately $782,409,000 at April 4, 2014. The investment portfolio of Focus Growth Fund, with a fair value of approximately $1,972,049,000 and identified cost of approximately $1,189,640,000 on April 4, 2014, was the principal asset acquired by the Portfolio. For financial reporting purposes, assets received and shares issued by the Portfolio were recorded at fair value; however, the cost basis of the investments received from Focus Growth Fund was carried forward to align ongoing reporting of the Portfolio's realized and unrealized gains

and losses with amounts distributable to shareholders for tax purposes. Immediately prior to the Reorganization, the net assets of the Portfolio were approximately $1,262,454,000. Immediately after the Reorganization, the net assets of the Portfolio were approximately $3,226,531,000.

Upon closing of the Reorganization, shareholders of Focus Growth Fund received shares of the Portfolio as follows:

Focus Growth Fund				MSIF Growth Portfolio
Class I				Class I
Class A				Class A
Class B				Class A
Class L				Class L

Assuming the acquisition had been completed on January 1, 2014, the beginning of the annual reporting period of the Portfolio, the Portfolio's pro forma results of operations for the period ended December 31, 2014, are as follows:

Net investment income (loss)⁽¹⁾	$	4,381,000
Net realized gain and unrealized gain⁽²⁾	$	300,743,000
Net increase (decrease) in net assets resulting from operations	$	305,124,000

(1) Approximately $(6,166,000) as reported, plus approximately $5,451,000 Focus Growth Fund prior to the Reorganization, plus approximately $5,096,000 of estimated pro-forma eliminated expenses.

(2) Approximately $280,460,000 as reported, plus approximately $20,283,000 Focus Growth Fund prior to the Reorganization.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Focus Growth Fund that have been included in the Portfolio's Statement of Operations since April 7, 2014.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Directors have the ultimate responsibility of determining the fair value of the investments. Under procedures approved by the Directors, the Fund's Adviser has

formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	108,869	$	—	$	—	$	108,869
Biotechnology		107,265		—		—		107,265
Chemicals		62,792		—		—		62,792
Diversified Financial Services		117,393		—		—		117,393
Electrical Equipment		17,028		—		—		17,028
Food & Staples Retailing		52,291		—		—		52,291
Food Products		183,258		—		—		183,258

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Health Care Equipment & Supplies	$	152,931	$	—	$	—	$	152,931
Health Care Technology		34,866		—		—		34,866
Hotels, Restaurants & Leisure		69,877		—		—		69,877
Information Technology Services		155,123		—		—		155,123
Insurance		65,549		—		—		65,549
Internet & Catalog Retail		417,533		—		—		417,533
Internet Software & Services		777,561		—		—		777,561
Life Sciences Tools & Services		175,304		—		—		175,304
Media		—		55,756		20,513		76,269
Pharmaceuticals		103,405		—		—		103,405
Professional Services		33,801		—		—		33,801
Semiconductors & Semiconductor Equipment		32,493		—		—		32,493
Software		263,377		—		—		263,377
Tech Hardware, Storage & Peripherals		112,248		—		—		112,248
Textiles, Apparel & Luxury Goods		79,956		—		—		79,956
Total Common Stocks		3,122,920		55,756		20,513		3,199,189
Preferred Stocks		—		—		57,634		57,634
Call Options Purchased		—		3,818		—		3,818
Short-Term Investments
Investment Company		167,796		—		—		167,796
Repurchase Agreement		—		1,397		—		1,397
Total Short-Term Investments		167,796		1,397		—		169,193
Total Assets	$	3,290,716	$	60,971	$	78,147	$	3,429,834

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $55,756,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)			Preferred Stocks (000)
Beginning Balance	$	—		$	—
Purchases		20,782			42,820
Sales		—			—
Amortization of discount		—			—
Transfers in		—			—
Transfers out		—			—
Corporate actions		—			—
Change in unrealized appreciation (depreciation)		(269	)		14,814
Realized gains (losses)		—			—
Ending Balance	$	20,513		$	57,634
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	(269	)	$	14,814

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Internet & Catalog Retail
Preferred Stocks	$	25,554	Market Transaction Method	Tender Offer Valuation	$	50.41		$	50.41		$	50.41		Increase
	$	24,898	Market Transaction Method	Precedent Transaction of Preferred Stock	$	119.76		$	119.76		$	119.76		Increase
Internet Software & Services
Preferred Stock	$	7,182	Market Transaction Method	Tender Offer Valuation	$	19.10		$	19.10		$	19.10		Increase
Media
Common Stock	$	20,513	Market Transaction Method	Precedent Transaction	$	2,119.29		$	2,119.29		$	2,119.29		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		14.0	%		16.0	%		15.0	%	Decrease
				Perpetual Growth Rate		3.0	%		5.0	%		4.0	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		3.4	x		8.3	x		5.8	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

purchase and/or sell put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Portfolio bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

3,818

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

appreciation (depreciation) by type of derivative contract for the year ended December 31, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(2,980	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	806	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	3,818	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	3,818	$	—	$	(3,818	)	$	0

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					1,173,512,000

6. Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	17,028	(f)	$	—	$	(17,028	)(g)(h)	$	0

(f) Represents market value of loaned securities at period end.

(g) The Portfolio received cash collateral of approximately $17,512,000, of which approximately $16,036,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $1,476,000, which is not reflected in the Portfolio of Investments.

(h) The actual collateral received is greater than the amount shown here due to overcollateralization.

7. Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear

market risks during that period. Restricted securities are identified in the Portfolio of Investments.

9. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

10. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses —distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Next $1 billion				Next $1 billion				Over $3 billion
	0.50	%			0.45	%			0.40	%			0.35	%

For the year ended December 31, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.44% of the Portfolio's average daily net assets.

Pursuant to the Reorganization, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.70% for Class I, 1.05% for Class A, 1.55% for Class L and 0.67% for Class IS. In addition, the Adviser has agreed to reimburse 0.01% of expenses of the Class A shares to the extent that total annual operating expenses of the Class A shares exceed 0.96%. The fee waivers and/or expense reimbursements will continue for at least two years from the date of the Reorganization or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. Following the two-year period from the date of the Reorganization, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I, 1.15% for Class A, 1.65% for Class L and 0.73% for Class IS. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, less than $500 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

0.25% of the Portfolio's average daily net assets attributable to Class L shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $2,252,042,000 and $1,177,863,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $143,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	124,007			$	1,216,572			$	1,172,783			$	70			$	167,796

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	3,224	$	159,845	$	11,998	$	37,925

Accumulated Net Investment Loss (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	4,767			$	(4,891	)		$	124

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	—			$	30,636

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $2,078,648,000. The aggregate gross unrealized appreciation is approximately $1,379,376,000 and the aggregate gross unrealized depreciation is approximately $28,190,000, resulting in net unrealized appreciation of approximately $1,351,186,000.

Specified Ordinary Losses (000)				Capital Losses (000)
$	1,278			$	—

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 10% and 72%, for Class I and Class IS shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Growth Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Growth Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Growth Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 37.7% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $159,845,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGRWANN
1111556 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Franchise Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					7
Statement of Operations					9
Statements of Changes in Net Assets					10
Financial Highlights					12
Notes to Financial Statements					15
Report of Independent Registered Public Accounting Firm					21
Federal Tax Notice					22
U.S. Privacy Policy					23
Director and Officer Information					26

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Franchise Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Franchise Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Franchise Portfolio Class I	$	1,000.00	$	993.20	$	1,020.27	$	4.92	$	4.99		0.98	%
Global Franchise Portfolio Class A		1,000.00		991.20		1,018.45		6.73		6.82		1.34
Global Franchise Portfolio Class L		1,000.00		989.60		1,016.48		8.68		8.79		1.73

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Franchise Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 4.82%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI World Index (the "Index"), which returned 4.94%.

Factors Affecting Performance

• 2014 was something of a roller coaster year. As in 2013, markets continued to be broadly hopeful of continuing low interest rates, the expectation of economic growth and well-behaved low inflation, but there was much to distract investors. Questions over ending quantitative easing (QE) in the U.S., growth in China, politics in the Ukraine, Ebola, growth in Europe and more recently the decline in oil prices, all added to volatility.

• World equities' performance in 2014 was dominated by the performance of the U.S. market and the strengthening of the U.S. dollar. For non-U.S. equities, the re-rating (the market changing its view of a company, causing a stock's price to move) story of the previous two years faded and earnings fell. However, in the U.S., the re-rating story continued, probably largely driven by continuing — albeit considerably aided by share buybacks — earnings growth. The key question for the U.S. market is whether such a sustained re-rating can continue if strong earnings growth does not come through, especially as the U.S. market comes to terms with the impact of recent dollar strength on earnings growth and/or questions the underlying strength of the U.S. recovery. For non-U.S. equities, the question is whether dollar earnings continue to fall, given a mixture of further dollar strength and the underlying difficulties of growing earnings in weak economies, particularly Europe and Japan.

• In the Portfolio, stock selection in and allocation to consumer discretionary, financials, and industrials, and zero weights in materials and telecommunication services were positive contributors to performance. However, stock selection in information technology, consumer staples and health care detracted from performance during the year.

• Top absolute contributors to the Portfolio's performance for the year were Time Warner, Microsoft and Procter & Gamble. Top absolute detractors for the period were SAP, Sanofi and Diageo.⁽ⁱ⁾

Management Strategies

• Finding stocks with strong potential absolute returns in these markets is difficult. Attractive opportunities are few and far between. This time last year, consumer staples looked good, especially after their de-rating in the second half of 2013. Tobacco in particular had endured its own private bear market. However, consumer staples have now re-rated and tobacco has so far emerged from the worries of e-cigarettes and plain packaging fairly intact. The overall sector now looks much closer to reasonable valuations in absolute terms in the short term, even though we would argue that the compounders within it still appear to be trading below long-term intrinsic value. In other higher-quality sectors such as health care, re-rating has largely played out.

• Well aware of both consumer staples and health care's re-rating, we think valuations are still reasonable considering their generally continuing compounding characteristics: long-term pricing power, high return on capital employed (ROCE) and stable margins. We are also well aware of the scope for further emerging market currency depreciation against the U.S. dollar. We are still prepared to look beyond this, however, because we believe the long-term structural growth scenario for consumer staples companies with high ROCE in the emerging markets looks intact. We are also concerned about the potential for further yen and euro depreciation against the U.S. dollar, as both regions are seemingly determined to devalue their currencies. The declining growth outlook for the near future for Europe and Japan leaves an environment fraught with scope for both further earnings disappointments as well as pervasive political risk. Getting earnings growth in U.S. dollars outside the U.S. is likely to be as tough in 2015 as it was in 2014, and we continue to prefer the earnings resilience of the quality sectors at still acceptable valuations compared to the broader alternative.

⁽ⁱ⁾ The information contained in this overview regarding specific securities is for informational purposes only and should not be construed as a recommendation to purchase or sell the securities mentioned.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Franchise Portfolio

• This leaves us with the stocks we like often approaching reasonable valuations and facing headwinds, while the stocks we would like to buy have not yet been de-rated to a degree that gives us the margin of relative safety we seek. Small wonder it is currently difficult to find high-quality stocks with attractive valuations that we generally prefer.

• In such an environment, the biggest challenge is not to shoot the lights out but just to keep the lights burning. In our view, the best way of doing this is to stick to reasonably priced quality companies which we believe may have the potential to continue compounding their earnings over the long term.

* Minimum Investment for Class I shares

Performance Compared to the MSCI World Index⁽¹⁾ and the Lipper Global Large-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		4.82	%		12.56	%		9.53	%		11.37	%
MSCI World Index		4.94			10.20			6.03			6.33
Lipper Global Large-Cap Growth Funds Index		3.83			9.69			6.27			5.68
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		4.45			12.25			9.23			11.07
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–1.02			11.04			8.64			10.61
MSCI World Index		4.94			10.20			6.03			6.33
Lipper Global Large-Cap Growth Funds Index		3.83			9.69			6.27			5.68
Portfolio — Class L Shares w/o sales charges⁽⁵⁾		4.00			—			—			8.76
MSCI World Index		4.94			—			—			13.11
Lipper Global Large-Cap Growth Funds Index		3.83			—			—			11.05

⁽¹⁾ The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the global equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Index currently consists of 23 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Global Large-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Large-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 10 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Global Large-Cap Growth Funds classification.

⁽⁴⁾ Commenced operations on November 28, 2001.

⁽⁵⁾ Commenced offering on April 27, 2012.

⁽⁶⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date or initial offering of the respective share class of the Portfolio, not the inception of the Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Franchise Portfolio

	Shares		Value (000)
Common Stocks (97.7%)
France (9.9%)
Hermes International		3,774	$	1,346
LVMH Moet Hennessy Louis Vuitton SA		77,208		12,209
Pernod Ricard SA		129,991		14,413
Publicis Groupe SA		111,184		7,963
Sanofi		243,256		22,169
				58,100
Germany (2.8%)
SAP SE		231,350		16,358
Italy (0.8%)
Davide Campari-Milano SpA		750,268		4,657
Japan (0.9%)
Japan Tobacco, Inc.		189,700		5,209
Netherlands (0.5%)
Reed Elsevier N.V.		130,711		3,124
Switzerland (9.7%)
Nestle SA (Registered)		776,721		56,935
United Kingdom (31.3%)
British American Tobacco PLC		1,001,493		54,415
Diageo PLC		935,921		26,843
Experian PLC		760,369		12,826
Imperial Tobacco Group PLC		171,814		7,524
Indivior PLC (a)		476,994		1,111
Reckitt Benckiser Group PLC		479,008		38,642
Reed Elsevier PLC		184,385		3,137
Unilever PLC		981,359		39,864
				184,362
United States (41.8%)
3M Co.		73,292		12,043
Accenture PLC, Class A		316,731		28,287
Intuit, Inc.		75,632		6,972
Mead Johnson Nutrition Co.		32,935		3,311
Microsoft Corp.		634,485		29,472
Mondelez International, Inc., Class A		585,803		21,279
Moody's Corp.		60,775		5,823
NIKE, Inc., Class B		122,741		11,802
Philip Morris International, Inc.		311,330		25,358
Procter & Gamble Co. (The)		306,512		27,920
Time Warner, Inc.		324,116		27,686
Twenty-First Century Fox, Inc., Class B		355,640		13,120
Visa, Inc., Class A		91,223		23,919
Walt Disney Co. (The)		100,764		9,491
				246,483
Total Common Stocks (Cost $470,787)				575,228

	Shares		Value (000)
Short-Term Investment (2.0%)
Investment Company (2.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $11,760)		11,759,766	$	11,760
Total Investments (99.7%) (Cost $482,547) (b)				586,988
Other Assets in Excess of Liabilities (0.3%)				1,854
Net Assets (100.0%)			$	588,842

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $327,634,000 and 55.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

Portfolio Composition

Classification	Percentage of Total Investments
Food Products		20.7	%
Tobacco		15.8
Other*		15.5
Household Products		11.3
Media		11.0
Software		9.0
Information Technology Services		8.9
Beverages		7.8
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Franchise Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $470,787)	$	575,228
Investment in Security of Affiliated Issuer, at Value (Cost $11,760)		11,760
Total Investments in Securities, at Value (Cost $482,547)		586,988
Foreign Currency, at Value (Cost $1)		1
Cash		255
Receivable for Portfolio Shares Sold		5,045
Tax Reclaim Receivable		671
Dividends Receivable		632
Receivable from Affiliate		—	@
Other Assets		34
Total Assets		593,626
Liabilities:
Payable for Investments Purchased		2,255
Payable for Advisory Fees		1,166
Payable for Portfolio Shares Redeemed		1,138
Payable for Sub Transfer Agency Fees — Class I		41
Payable for Sub Transfer Agency Fees — Class A		13
Payable for Sub Transfer Agency Fees — Class L		2
Payable for Professional Fees		41
Payable for Administration Fees		40
Payable for Shareholder Services Fees — Class A		15
Payable for Distribution and Shareholder Services Fees — Class L		6
Payable for Custodian Fees		11
Payable for Directors' Fees and Expenses		10
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Other Liabilities		40
Total Liabilities		4,784
Net Assets	$	588,842
Net Assets Consist Of:
Paid-in-Capital	$	482,937
Accumulated Undistributed Net Investment Income		1,316
Accumulated Net Realized Gain		218
Unrealized Appreciation (Depreciation) on:
Investments		104,441
Foreign Currency Translations		(70	)
Net Assets	$	588,842

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Franchise Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	515,012
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		25,409,038
Net Asset Value, Offering and Redemption Price Per Share	$	20.27
CLASS A:
Net Assets	$	64,515
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		3,238,310
Net Asset Value, Redemption Price Per Share	$	19.92
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.10
Maximum Offering Price Per Share	$	21.02
CLASS L:
Net Assets	$	9,315
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		468,871
Net Asset Value, Offering and Redemption Price Per Share	$	19.87

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Franchise Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $859 of Foreign Taxes Withheld)	$	17,304
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		17,305
Expenses:
Advisory Fees (Note B)		4,712
Administration Fees (Note C)		476
Sub Transfer Agency Fees		49
Sub Transfer Agency Fees — Class I		177
Sub Transfer Agency Fees — Class A		69
Sub Transfer Agency Fees — Class L		2
Shareholder Services Fees — Class A (Note D)		189
Distribution and Shareholder Services Fees — Class L (Note D)		72
Professional Fees		94
Custodian Fees (Note F)		84
Shareholder Reporting Fees		37
Registration Fees		35
Transfer Agency Fees — Class I (Note E)		11
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Directors' Fees and Expenses		15
Pricing Fees		5
Other Expenses		22
Total Expenses		6,054
Rebate from Morgan Stanley Affiliate (Note G)		(8	)
Net Expenses		6,046
Net Investment Income		11,259
Realized Gain (Loss):
Investments Sold		29,769
Foreign Currency Transactions		(142	)
Net Realized Gain		29,627
Change in Unrealized Appreciation (Depreciation):
Investments		(13,103	)
Foreign Currency Translations		(91	)
Net Change in Unrealized Appreciation (Depreciation)		(13,194	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		16,433
Net Increase in Net Assets Resulting from Operations	$	27,692

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Franchise Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	11,259		$	10,187
Net Realized Gain		29,627			18,378
Net Change in Unrealized Appreciation (Depreciation)		(13,194	)		73,849
Net Increase in Net Assets Resulting from Operations		27,692			102,414
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(8,695	)		(9,241	)
Net Realized Gain		(25,999	)		(14,373	)
*Class A:**
Net Investment Income		(1,011	)		(1,197	)
Net Realized Gain		(3,789	)		(2,068	)
*Class H:**
Net Realized Gain		—			(25	)**
Class L:
Net Investment Income		(94	)		(92	)
Net Realized Gain		(502	)		(239	)
Total Distributions		(40,090	)		(27,235	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		122,018			150,236
Distributions Reinvested		33,162			21,553
Redeemed		(199,802	)		(72,574	)
*Class A:**
Subscribed		6,952			54,199
Distributions Reinvested		4,753			3,252
Conversion from Class H		—			6,820
Redeemed		(28,751	)		(24,795	)
*Class H:**
Subscribed		—			3,887	**
Distributions Reinvested		—			25	**
Conversion to Class A		—			(6,820	)**
Redeemed		—			(21	)**
Class L:
Subscribed		670			5,720
Distributions Reinvested		595			330
Redeemed		(865	)		(2,411	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(61,268	)		139,401
Total Increase (Decrease) in Net Assets		(73,666	)		214,580
Net Assets:
Beginning of Period		662,508			447,928
End of Period (Including Accumulated Undistributed Net Investment Income and Distributions in Excess of Net Investment Income of $1,316 and $(1), respectively.	$	588,842		$	662,508

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Franchise Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		5,784			7,674
Shares Issued on Distributions Reinvested		1,659			1,084
Shares Redeemed		(9,484	)		(3,629	)
Net Increase (Decrease) in Class I Shares Outstanding		(2,041	)		5,129
*Class A:**
Shares Subscribed		334			2,785
Shares Issued on Distributions Reinvested		241			166
Conversion from Class H		—			354
Shares Redeemed		(1,404	)		(1,248	)
Net Increase (Decrease) in Class A Shares Outstanding		(829	)		2,057
*Class H:**
Shares Subscribed		—			200	**
Shares Issued on Distributions Reinvested		—			1	**
Conversion to Class A		—			(354	)**
Shares Redeemed		—			(1	)**
Net Decrease in Class H Shares Outstanding		—			(154	)
Class L:
Shares Subscribed		33			297
Shares Issued on Distributions Reinvested		30			17
Shares Redeemed		(41	)		(121	)
Net Increase in Class L Shares Outstanding		22			193

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Franchise Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	20.77		$	18.13		$	16.24		$	15.29		$	13.81
Income from Investment Operations:
Net Investment Income†		0.41			0.36			0.40			0.31			0.32
Net Realized and Unrealized Gain		0.57			3.17			2.11			1.11			1.62
Total from Investment Operations		0.98			3.53			2.51			1.42			1.94
Distributions from and/or in Excess of:
Net Investment Income		(0.37	)		(0.35	)		(0.32	)		(0.30	)		(0.46	)
Net Realized Gain		(1.11	)		(0.54	)		(0.30	)		(0.17	)		—
Total Distributions		(1.48	)		(0.89	)		(0.62	)		(0.47	)		(0.46	)
Net Asset Value, End of Period	$	20.27		$	20.77		$	18.13		$	16.24		$	15.29
Total Return++		4.82	%		19.71	%		15.38	%		9.38	%		14.07	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	515,012		$	570,261		$	404,762		$	211,677		$	89,666
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.97	%+		0.95	%+		0.98	%+		1.00	%+		1.00	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.00	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.94	%+		1.79	%+		2.21	%+		1.87	%+		2.19	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%		0.00	%§		0.00	%§
Portfolio Turnover Rate		33	%		24	%		34	%		30	%		74	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			N/A			N/A			1.01	%		1.08	%+
Net Investment Income to Average Net Assets		N/A			N/A			N/A			1.86	%		2.11	%+

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Franchise Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	20.44		$	17.86		$	16.01		$	15.10		$	13.65
Income from Investment Operations:
Net Investment Income†		0.34			0.28			0.35			0.26			0.28
Net Realized and Unrealized Gain		0.55			3.14			2.09			1.09			1.59
Total from Investment Operations		0.89			3.42			2.44			1.35			1.87
Distributions from and/or in Excess of:
Net Investment Income		(0.30	)		(0.30	)		(0.29	)		(0.27	)		(0.42	)
Net Realized Gain		(1.11	)		(0.54	)		(0.30	)		(0.17	)		—
Total Distributions		(1.41	)		(0.84	)		(0.59	)		(0.44	)		(0.42	)
Net Asset Value, End of Period	$	19.92		$	20.44		$	17.86		$	16.01		$	15.10
Total Return++		4.45	%		19.42	%		15.14	%		8.98	%		13.83	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	64,515		$	83,135		$	35,901		$	15,327		$	9,653
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.27	%+		1.20	%+^		1.23	%+		1.25	%+		1.25	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.25	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.64	%+		1.42	%		1.99	%+		1.62	%+		1.94	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%		0.00	%§		0.00	%§
Portfolio Turnover Rate		33	%		24	%		34	%		30	%		74	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			N/A			N/A			1.26	%		1.33	%+
Net Investment Income to Average Net Assets		N/A			N/A			N/A			1.61	%		1.86	%+

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Franchise Portfolio

	Class L
	Year Ended December 31,						Period from April 27, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	20.39		$	17.83		$	18.13
Income from Investment Operations:
Net Investment Income†		0.25			0.20			0.10
Net Realized and Unrealized Gain		0.55			3.11			0.16
Total from Investment Operations		0.80			3.31			0.26
Distributions from and/or in Excess of:
Net Investment Income		(0.21	)		(0.21	)		(0.26	)
Net Realized Gain		(1.11	)		(0.54	)		(0.30	)
Total Distributions		(1.32	)		(0.75	)		(0.56	)
Net Asset Value, End of Period	$	19.87		$	20.39		$	17.83
Total Return++		4.00	%		18.78	%		1.36	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,315		$	9,112		$	4,525
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.72	%+		1.70	%+^^		1.73	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.19	%+		1.03	%+		0.84	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		33	%		24	%		34	%#

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Franchise Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek long-term capital appreciation by investing primarily in equity securities of issuers located throughout the world that they believe have, among other things, resilient business franchises and growth potential. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

The Fund suspended offering Class I, Class A and Class L shares of the Portfolio to new investors, except as follows. The Fund will continue to offer shares of the Portfolio (1) through certain retirement plan accounts, (2) to clients of certain registered investment advisors who currently offer shares of the Portfolio in their asset allocation programs, (3) to directors and trustees of the Morgan Stanley Funds, (4) to Morgan Stanley affiliates and their employees and (5) to benefit plans sponsored by Morgan Stanley and its affiliates. The Fund will continue to offer Class I, Class A and Class L shares of the Portfolio to existing shareholders. The Fund may recommence offering Class I, Class A and Class L shares of the Portfolio to new investors in the future. Any such offerings of the Portfolio's Class I, Class A and Class L shares may be limited in amount and may commence and terminate without any prior notice.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest

reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	—	$	45,913	$	—	$	45,913
Diversified Financial Services		5,823		—		—		5,823
Food Products		24,590		96,799		—		121,389
Household Products		27,920		38,642		—		66,562
Industrial Conglomerates		12,043		—		—		12,043
Information Technology Services		52,206		—		—		52,206
Media		50,297		14,224		—		64,521
Pharmaceuticals		1,111		22,169		—		23,280

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Professional Services	$	—	$	12,826	$	—	$	12,826
Software		36,444		16,358		—		52,802
Textiles, Apparel & Luxury Goods		11,802		13,555		—		25,357
Tobacco		25,358		67,148		—		92,506
Total Common Stocks		247,594		327,634		—		575,228
Short-Term Investment
Investment Company		11,760		—		—		11,760
Total Assets	$	259,354	$	327,634	$	—	$	586,988

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $306,856,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

4. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

6. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $500 million				Next $500 million				Over $1 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.79% of the Portfolio's average daily net assets.

shares and 1.85% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect during the most recent reporting period.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

providing shareholder support services to investors who purchase Class A and Class L shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $191,244,000 and $282,900,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $8,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	10,972			$	194,660			$	193,872			$	1			$	11,760

credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Portfolio.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	9,800	$	30,290	$	12,961	$	14,274

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in-Capital (000)
$	(142	)		$	142			$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	1,318			$	3,303

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $485,629,000. The aggregate gross unrealized appreciation is approximately $107,068,000 and the aggregate gross unrealized depreciation is approximately $5,709,000 resulting in net unrealized appreciation of approximately $101,359,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 36.0% and 40.0%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Franchise Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Franchise Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Franchise Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 39.3% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $30,290,000 as a long-term capital gain distribution.

The Portfolio intends to pass through foreign tax credits of approximately $650,000, and has derived net income from sources within foreign countries amounting to approximately $12,288,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGFANN
1110210 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Equity Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					27
Federal Tax Notice					28
U.S. Privacy Policy					29
Director and Officer Information					32

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in International Equity Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

International Equity Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Equity Portfolio Class I	$	1,000.00	$	899.50	$	1,020.42	$	4.55	$	4.84		0.95	%
International Equity Portfolio Class A		1,000.00		897.70		1,018.65		6.22		6.61		1.30
International Equity Portfolio Class L		1,000.00		895.50		1,016.13		8.60		9.15		1.80
International Equity Portfolio Class IS		1,000.00		899.10		1,020.62		4.36		4.63		0.91

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

International Equity Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily in equity securities of non-U.S. issuers.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -6.08%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI EAFE Index (the "Index"), which returned -4.90%.

Factors Affecting Performance

• As in 2013, international equity markets in 2014 continued to be broadly entranced with a heady vision of the troika of low interest rates "seemingly forever," the expectation (if not always the reality) of economic growth and well-behaved, low inflation.

• For the year ended December 31, 2014, the Index was down 4.9%, with the eurozone down 8.3%, the U.K. down 5.4% and Japan down 4.0%.⁽ⁱ⁾ Some markets of developed countries with greater reliance on commodity production were down, but not as much as one might expect given the drop in commodity prices in the second half of the year. Norway declined 22.0%, but Australia was down only 3.4% and Canada was up 1.5%. Rather, the more significant, mainly commodity-related losses were reserved for the emerging markets, with Russia declining 46.3% and Brazil down 14.0%, while Greece, which continued to be considered an emerging market in 2014 after losing its developed market status the year before, plunged 40.0%. However, China and India both posted respectable U.S. dollar returns for the year, with the MSCI China Index up 8.0% (following a late dash in the fourth quarter) and India up 23.9%. (Regional and country equity market returns are represented by their respective MSCI indexes and all returns are in U.S. dollar terms.)

• Much of the damage to regional returns came in the fourth quarter, following the collapse of iron ore and oil prices and the strengthening of the U.S. dollar. The Index was down 3.6%, with the eurozone down 5.1%, the U.K. down 4.2% and Japan down 2.4% for the quarter. (All returns in U.S. dollar terms.)

• On a sector basis, for 2014, defensive sectors generally fared better, with sector performance in the Index led by health care (+6.0%), utilities (+3.8%), information technology (-0.7%) and consumer staples (-2.4%), while telecommunications (-4.3%) and consumer discretionary (-4.7%) performed broadly in line with the overall Index. Sector underperformance within the Index was led by energy (-18.7%), followed by materials (-10.6%), industrials (-7.7%) and financials (-5.7%). (All returns in U.S. dollar terms.)

• The Portfolio underperformed the Index during the period. The Portfolio's principal contributors to performance were stock selection and allocation in consumer staples and consumer discretionary, as well as the yen hedge, which was managed with forward contracts. However, these relative gains were offset by the negative impact of stock selection in energy, health care, financials (mainly banks) and industrials.

Management Strategies

• Finding stocks with strong potential absolute returns in these markets is difficult. Attractive opportunities are few and far between. This time last year, consumer staples stocks looked good, especially after their de-rating (the market changing its view of a company, causing a stock's price to move) in the second half of 2013, and tobacco in particular enduring its own private bear market. However, consumer staples have now re-rated upwards and tobacco has emerged from the worries of e-cigarettes and plain packaging fairly intact so far. The overall sector now looks much closer to reasonable valuations in absolute terms in the short term, even though we would argue that the compounders within it still appear to be trading below long-term intrinsic value. In other higher-quality sectors such as health care, the re-rating opportunity we spotted a few years back has largely played out.

• Well aware of both consumer staples and health care re-rating, we think valuations are still reasonable considering their generally continuing long-term pricing power and high return on capital employed (ROCE). We are also well aware of the scope for further emerging market currency depreciation

⁽ⁱ⁾ Source for equity market and sector returns: FactSet and MSCI as of December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Equity Portfolio

against the U.S. dollar, but are still prepared to look beyond this, as the long-term structural growth scenario for consumer staples at high ROCE in the emerging markets looks intact. We are also concerned about the potential for further yen and euro depreciation against the U.S. dollar, as both regions are seemingly determined to depreciate their currencies. The declining growth outlook for the near future for Europe and Japan leaves an environment fraught with scope for further earnings disappointments and one also with pervasive political risk. Getting earnings growth in U.S. dollars outside the U.S. is likely to be as tough in 2015 as it was in 2014, and we still prefer the earnings resilience of the quality sectors at a still acceptable valuation compared to the alternatives.

• Although some of the commodities markets have taken a sharp tumble (especially oil and iron ore), we are not convinced that they have bottomed, so we have been generally cautious in our additions to the Portfolio. In particular, with Brent crude oil down 50% from its peak in June to the end of 2014 and the MSCI All Country World Energy Index only down 23% in that period, the equity market seems to be pricing in a recovery in oil prices and therefore is not currently offering exceptional value, in our view.⁽ⁱⁱ⁾ However, some of the secondary plays on commodities may look too cheap, but many are not investable by our criteria. We also do not believe that great opportunities have presented themselves yet in the commodity-driven Australian and Canadian markets. We are also generally not enthused by the opportunities in banks, especially euro-area banks, which either look overvalued or like an opportunity to explore the outer reaches of downside.

• Japan was an island of value at the start of 2013. But two years after Bank of Japan governor Haruhiko Kuroda's efforts to weaken the yen and a resultant surge in the Japanese market, it is far trickier to find value in Japan. As a result, our weighting in Japan has recently fallen to approximately 18.7% as of the end of the period, as we have selectively taken profits. Given our anxieties about a yen catastrophe with Mr. Kuroda at the wheel, we have increased our yen hedge accordingly to cover our domestic Japanese exposure. We believe any asset price bubbles inflated

by Mr. Kuroda will likely help the Portfolio's financials holdings, which remain fairly cheap. But the issue, as ever in Japan, is trying to find high-quality companies.

• From a stock-picking perspective, this leaves us with the stocks we like often approaching reasonable valuations and facing headwinds, while the stocks we would like to buy have not yet been de-rated to a degree that gives us the margin of relative safety we like to seek. Small wonder it is currently difficult to find high-quality stocks with the attractive valuations that we generally prefer.

• In such an environment, the biggest challenge is not to shoot the lights out but just to keep the lights burning. In our view, the best way of doing this is to stick to quality companies at reasonable prices which we believe may have the potential to continue compounding their earnings in the long term.

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

⁽ⁱⁱ⁾ Source: FactSet and MSCI as of December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Equity Portfolio

Performance Compared to the MSCI EAFE Index⁽¹⁾ and the Lipper International Large-Cap Core Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–6.08	%		5.79	%		4.43	%		8.77	%
MSCI EAFE Index		–4.90			5.33			4.43			4.48
Lipper International Large-Cap Core Funds Index		–4.78			5.12			4.18			6.36
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		–6.43			5.51			4.17			7.80
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–11.35			4.38			3.60			7.49
MSCI EAFE Index		–4.90			5.33			4.43			4.71
Lipper International Large-Cap Core Funds Index		–4.78			5.12			4.18			5.62
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		–6.91			—			—			10.72
MSCI EAFE Index		–4.90			—			—			13.89
Lipper International Large-Cap Core Funds Index		–4.78			—			—			13.23
Portfolio — Class IS Shares w/o sales charges⁽⁷⁾		–6.07			—			—			0.69
MSCI EAFE Index		–4.90			—			—			1.91
Lipper International Large-Cap Core Funds Index		–4.78			—			—			1.68

⁽¹⁾ The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the international equity market performance of developed markets, excluding the U.S. & Canada. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI EAFE Index currently consists of 21 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper International Large-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Large-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper International Large-Cap Core Funds classification.

⁽⁴⁾ Commenced operations on August 4, 1989.

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on June 14, 2012.

⁽⁷⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

International Equity Portfolio

	Shares		Value (000)
Common Stocks (96.8%)
Australia (1.3%)
Santos Ltd.		6,354,091	$	42,930
WorleyParsons Ltd.		2,771,355		22,859
				65,789
Canada (1.6%)
Barrick Gold Corp.		5,388,238		58,066
Turquoise Hill Resources Ltd. (a)		6,010,392		18,572
				76,638
China (1.0%)
China Petroleum & Chemical Corp. H Shares (b)		57,458,000		46,519
France (9.6%)
AXA SA		2,138,405		49,390
BNP Paribas SA		973,631		57,215
Hermes International (c)		9,924		3,539
Kering		128,319		24,670
LVMH Moet Hennessy Louis Vuitton SA		201,568		31,875
Pernod Ricard SA		453,243		50,254
Publicis Groupe SA		999,013		71,552
Sanofi		1,571,999		143,266
Vallourec SA (c)		1,534,031		41,889
				473,650
Germany (7.5%)
BASF SE		453,967		38,376
Bayer AG (Registered)		667,141		91,204
Continental AG		422,369		89,691
HeidelbergCement AG		939,832		66,858
SAP SE		1,181,791		83,559
				369,688
Hong Kong (0.6%)
AIA Group Ltd.		5,615,700		30,923
Ireland (1.0%)
CRH PLC		2,003,018		48,191
Italy (0.7%)
Eni SpA		2,069,246		36,140
Japan (18.4%)
Hitachi Ltd.		11,098,000		81,207
Hoya Corp.		970,200		32,483
Inpex Corp.		5,550,300		61,583
Japan Tobacco, Inc.		2,064,600		56,690
Keyence Corp.		58,410		25,872
Kyocera Corp.		545,400		24,998
Lawson, Inc. (c)		636,600		38,494
Mitsubishi Estate Co., Ltd.		2,788,000		59,006
MS&AD Insurance Group Holdings, Inc.		1,519,000		36,079
NGK Spark Plug Co., Ltd.		2,248,100		67,887
Nitto Denko Corp.		231,700		12,957
NTT DoCoMo, Inc.		3,218,500		47,113
Sekisui House Ltd.		3,719,800		48,721
Sompo Japan Nipponkoa Holdings, Inc.		3,146,900		79,082

	Shares		Value (000)
Sumco Corp. (c)		2,074,500	$	29,831
Sumitomo Mitsui Financial Group, Inc.		1,433,451		51,794
Sumitomo Mitsui Trust Holdings, Inc.		5,785,999		22,082
Toyota Motor Corp.		2,100,100		130,963
				906,842
Netherlands (5.5%)
Akzo Nobel N.V.		712,457		49,405
Reed Elsevier N.V.		1,063,475		25,416
Unilever N.V. CVA		4,993,276		196,149
				270,970
Sweden (2.1%)
Nordea Bank AB		5,825,426		67,281
Svenska Handelsbanken AB, Class A		735,450		34,340
				101,621
Switzerland (15.1%)
Credit Suisse Group AG (Registered) (a)		2,561,652		64,218
Nestle SA (Registered)		3,128,713		229,339
Novartis AG (Registered)		1,959,709		180,230
Roche Holding AG (Genusschein)		543,021		147,181
Swisscom AG (Registered)		52,046		27,329
Zurich Insurance Group AG (a)		298,017		93,322
				741,619
United Kingdom (32.4%)
Admiral Group PLC		1,810,751		37,082
Aggreko PLC		878,098		20,458
BG Group PLC		4,913,554		65,403
BHP Billiton PLC		2,126,429		45,484
British American Tobacco PLC		4,180,827		227,161
Bunzl PLC		681,345		18,573
Diageo PLC		4,911,362		140,863
Experian PLC		3,563,271		60,104
Friends Life Group Ltd.		5,877,913		33,232
GlaxoSmithKline PLC		3,710,062		79,377
Glencore PLC (a)		8,690,792		40,002
HSBC Holdings PLC		5,052,485		47,748
Imperial Tobacco Group PLC		886,311		38,814
Indivior PLC (a)		2,710,927		6,313
Lloyds Banking Group PLC (a)		52,793,186		62,342
Meggitt PLC		9,192,513		73,479
Prudential PLC		4,892,926		112,597
Reckitt Benckiser Group PLC		2,710,927		218,694
Reed Elsevier PLC		1,490,983		25,367
Rio Tinto PLC		500,371		23,053
Smiths Group PLC		3,481,344		58,922
Travis Perkins PLC		938,473		27,019
Weir Group PLC (The)		2,014,409		57,656
Wolseley PLC		1,281,610		72,960
				1,592,703
Total Common Stocks (Cost $4,189,212)				4,761,293

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

International Equity Portfolio

	Shares		Value (000)
Short-Term Investments (3.6%)
Securities held as Collateral on Loaned Securities (0.6%)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		27,713,648	$	27,714
	Face Amount (000)
Repurchase Agreement (0.1%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $2,643; fully collateralized by various U.S. Government obligations; 2.13% — 4.25% due 1/31/21—11/15/40; valued at $2,697)	$	2,643		2,643
Total Securities held as Collateral on Loaned Securities (Cost $30,357)				30,357

	Shares		Value (000)
Investment Company (3.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $147,603)		147,603,200	$	147,603
Total Short-Term Investments (Cost $177,960)				177,960
Total Investments (100.4%) (Cost $4,367,172) Including $32,481 of Securities Loaned (d)(e)				4,939,253
Liabilities in Excess of Other Assets (-0.4%)				(17,713	)
Net Assets (100.0%)			$	4,921,540

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(d) Securities are available for collateral in connection with an open foreign currency forward exchange contract.

(e) The approximate fair value and percentage of net assets, $4,678,342,000 and 95.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

CVA Certificaten Van Aandelen.

Foreign Currency Forward Exchange Contract:

The Portfolio had the following foreign currency forward exchange contract open at December 31, 2014:

Counterparty				Currency to Deliver (000)				Value (000)				Settlement Date				In Exchange For (000)				Value (000)				Unrealized Depreciation (000)
Commonwealth Bank of Australia				JPY	46,175,000			$	385,524			1/14/15				USD	385,049			$	385,049			$	(475	)

JPY — Japanese Yen

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		49.8	%
Pharmaceuticals		13.2
Insurance		9.6
Food Products		8.7
Banks		7.0
Tobacco		6.6
Oil, Gas & Consumable Fuels		5.1
Total Investments		100.0	%***

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

*** Does not include open foreign currency forward exchange contracts with unrealized depreciation of approximately $475,000.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Equity Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $4,191,855)	$	4,763,936
Investment in Security of Affiliated Issuer, at Value (Cost $175,317)		175,317
Total Investments in Securities, at Value (Cost $4,367,172)		4,939,253
Foreign Currency, at Value (Cost $56)		50
Cash		4,792
Receivable for Portfolio Shares Sold		11,668
Tax Reclaim Receivable		10,225
Dividends Receivable		2,007
Receivable from Affiliate		1
Other Assets		201
Total Assets		4,968,197
Liabilities:
Collateral on Securities Loaned, at Value		33,151
Payable for Advisory Fees		8,972
Payable for Portfolio Shares Redeemed		1,600
Payable for Sub Transfer Agency Fees — Class I		684
Payable for Sub Transfer Agency Fees — Class A		486
Payable for Sub Transfer Agency Fees — Class L		19
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		475
Payable for Shareholder Services Fees — Class A		332
Payable for Distribution and Shareholder Services Fees — Class L		6
Payable for Administration Fees		337
Payable for Directors' Fees and Expenses		212
Payable for Custodian Fees		124
Payable for Professional Fees		41
Payable for Transfer Agency Fees — Class I		11
Payable for Transfer Agency Fees — Class A		6
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class IS		—	@
Other Liabilities		200
Total Liabilities		46,657
Net Assets	$	4,921,540
Net Assets Consist Of:
Paid-in-Capital	$	4,358,160
Accumulated Undistributed Net Investment Income		40,390
Accumulated Net Realized Loss		(47,606	)
Unrealized Appreciation (Depreciation) on:
Investments		572,081
Foreign Currency Forward Exchange Contracts		(475	)
Foreign Currency Translations		(1,010	)
Net Assets	$	4,921,540

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Equity Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	2,620,040
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		169,353,897
Net Asset Value, Offering and Redemption Price Per Share	$	15.47
CLASS A:
Net Assets	$	1,576,475
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		103,175,453
Net Asset Value, Redemption Price Per Share	$	15.28
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.85
Maximum Offering Price Per Share	$	16.13
CLASS L:
Net Assets	$	9,763
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		640,996
Net Asset Value, Offering and Redemption Price Per Share	$	15.23
CLASS IS:
Net Assets	$	715,262
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		46,221,762
Net Asset Value, Offering and Redemption Price Per Share	$	15.47
⁽¹⁾ Including: Securities on Loan, at Value:	$	32,481

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Equity Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $12,903 of Foreign Taxes Withheld)	$	172,302
Income from Securities Loaned — Net		2,406
Dividends from Security of Affiliated Issuer (Note G)		11
Total Investment Income		174,719
Expenses:
Advisory Fees (Note B)		42,985
Sub Transfer Agency Fees		1,337
Sub Transfer Agency Fees — Class I		3,086
Sub Transfer Agency Fees — Class A		2,390
Sub Transfer Agency Fees — Class L		19
Administration Fees (Note C)		4,298
Shareholder Services Fees — Class A (Note D)		3,859
Distribution and Shareholder Services Fees — Class L (Note D)		84
Custodian Fees (Note F)		797
Shareholder Reporting Fees		316
Directors' Fees and Expenses		123
Registration Fees		118
Professional Fees		106
Transfer Agency Fees — Class I (Note E)		30
Transfer Agency Fees — Class A (Note E)		15
Transfer Agency Fees — Class L (Note E)		3
Transfer Agency Fees — Class IS (Note E)		3
Pricing Fees		8
Other Expenses		161
Expenses Before Non Operating Expenses		59,738
Bank Overdraft Expense		—	@
Total Expenses		59,738
Reimbursement of Class Specific Expenses — Class I (Note B)		(2,814	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(614	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(10	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Rebate from Morgan Stanley Affiliate (Note G)		(84	)
Waiver of Advisory Fees (Note B)		(27	)
Net Expenses		56,186
Net Investment Income		118,533
Realized Gain (Loss):
Investments Sold		90,607
Foreign Currency Forward Exchange Contracts		47,704
Foreign Currency Transactions		(1,643	)
Net Realized Gain		136,668
Change in Unrealized Appreciation (Depreciation):
Investments		(554,531	)
Foreign Currency Forward Exchange Contracts		(8,366	)
Foreign Currency Translations		(1,680	)
Net Change in Unrealized Appreciation (Depreciation)		(564,577	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(427,909	)
Net Decrease in Net Assets Resulting from Operations	$	(309,376	)

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Equity Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	118,533		$	97,826
Net Realized Gain		136,668			235,276
Net Change in Unrealized Appreciation (Depreciation)		(564,577	)		622,987
Net Increase (Decrease) in Net Assets Resulting from Operations		(309,376	)		956,089
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(81,485	)		(61,929	)
*Class A:**
Net Investment Income		(41,518	)		(21,534	)
*Class H:**
Net Investment Income		—			(21	)
Class L:
Net Investment Income		(213	)		(113	)
Class IS:
Net Investment Income		(21,067	)		(4,460	)***
Total Distributions		(144,283	)		(88,057	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		349,891			400,704
Distributions Reinvested		78,325			58,555
Redeemed		(1,249,623	)		(1,035,172	)
*Class A:**
Subscribed		279,033			253,588
Distributions Reinvested		41,456			21,495
Conversion from Class H		—			67,123
Redeemed		(112,593	)		(58,505	)
*Class H:**
Subscribed		—			1,172	**
Distributions Reinvested		—			20	**
Conversion to Class A		—			(67,123	)**
Redeemed		—			(9,758	)**
Class L:
Subscribed		598			623
Distributions Reinvested		210			111
Redeemed		(2,194	)		(2,679	)
Class IS:
Subscribed		542,518			273,544	***
Distributions Reinvested		19,267			4,460	***
Redeemed		(71,791	)		(1,849	)***
Net Decrease in Net Assets Resulting from Capital Share Transactions		(124,903	)		(93,691	)
Redemption Fees		49			41
Total Increase (Decrease) in Net Assets		(578,513	)		774,382
Net Assets:
Beginning of Period		5,500,053			4,725,671
End of Period (Including Accumulated Undistributed Net Investment Income of $40,390 and $18,659)	$	4,921,540		$	5,500,053

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Equity Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		20,963			25,635
Shares Issued on Distributions Reinvested		4,997			3,606
Shares Redeemed		(74,124	)		(64,753	)
Net Decrease in Class I Shares Outstanding		(48,164	)		(35,512	)
*Class A:**
Shares Subscribed		17,653			16,526
Shares Issued on Distributions Reinvested		2,679			1,340
Conversion from Class H		—			4,322
Shares Redeemed		(7,071	)		(3,685	)
Net Increase in Class A Shares Outstanding		13,261			18,503
*Class H:**
Shares Subscribed		—			77	**
Shares Issued on Distributions Reinvested		—			1	**
Conversion to Class A		—			(4,336	)**
Shares Redeemed		—			(652	)**
Net Decrease in Class H Shares Outstanding		—			(4,910	)
Class L:
Shares Subscribed		37			41
Shares Issued on Distributions Reinvested		13			7
Shares Redeemed		(132	)		(174	)
Net Decrease in Class L Shares Outstanding		(82	)		(126	)
Class IS:
Shares Subscribed		32,435			16,635	***
Shares Issued on Distributions Reinvested		1,231			274	***
Shares Redeemed		(4,240	)		(113	)***
Net Increase in Class IS Shares Outstanding		29,426			16,796

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Equity Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	16.98		$	14.35		$	12.25		$	13.61		$	13.02
Income (Loss) from Investment Operations:
Net Investment Income†		0.39			0.32			0.31			0.32			0.26
Net Realized and Unrealized Gain (Loss)		(1.42	)		2.59			2.09			(1.37	)		0.53
Total from Investment Operations		(1.03	)		2.91			2.40			(1.05	)		0.79
Distributions from and/or in Excess of:
Net Investment Income		(0.48	)		(0.28	)		(0.30	)		(0.31	)		(0.20	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	15.47		$	16.98		$	14.35		$	12.25		$	13.61
Total Return++		(6.08	)%		20.39	%		19.60	%		(7.63	)%		6.08	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,620,040		$	3,694,164		$	3,631,307		$	2,959,403		$	3,372,029
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.95	%+		0.94	%+		0.95	%+		0.95	%+		0.95	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		0.95	%+		0.95	%+		N/A			0.95	%+		0.95	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		2.33	%+		2.04	%+		2.31	%+		2.36	%+		2.05	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		29	%		29	%		23	%		34	%		40	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.04	%		0.99	%		0.97	%		0.98	%		0.98	%+
Net Investment Income to Average Net Assets		2.24	%		1.99	%		2.29	%		2.33	%		2.02	%+

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Equity Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	16.78		$	14.18		$	12.11		$	13.45		$	12.87
Income (Loss) from Investment Operations:
Net Investment Income†		0.31			0.25			0.27			0.28			0.23
Net Realized and Unrealized Gain (Loss)		(1.38	)		2.59			2.07			(1.34	)		0.51
Total from Investment Operations		(1.07	)		2.84			2.34			(1.06	)		0.74
Distributions from and/or in Excess of:
Net Investment Income		(0.43	)		(0.24	)		(0.27	)		(0.28	)		(0.16	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	15.28		$	16.78		$	14.18		$	12.11		$	13.45
Total Return++		(6.43	)%		20.13	%		19.31	%		(7.83	)%		5.78	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,576,475		$	1,508,564		$	1,012,956		$	916,002		$	928,966
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.30	%+		1.22	%+^		1.20	%+		1.20	%+		1.20	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.30	%+		1.22	%+^		N/A			1.20	%+		1.20	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.89	%+		1.60	%+		2.06	%+		2.11	%+		1.80	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		29	%		29	%		23	%		34	%		40	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.34	%		1.25	%		1.22	%		1.23	%		1.23	%+
Net Investment Income to Average Net Assets		1.85	%		1.57	%		2.04	%		2.08	%		1.77	%+

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.30% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.20% for Class A shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Equity Portfolio

	Class L
	Year Ended December 31,						Period from June 14, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	16.71		$	14.12		$	12.36
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.24			0.19			(0.07	)
Net Realized and Unrealized Gain (Loss)		(1.39	)		2.55			2.11
Total from Investment Operations		(1.15	)		2.74			2.04
Distributions from and/or in Excess of:
Net Investment Income		(0.33	)		(0.15	)		(0.28	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	15.23		$	16.71		$	14.12
Total Return++		(6.91	)%		19.49	%		16.53	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,763		$	12,072		$	11,982
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.80	%+		1.72	%+^^		1.70	%+*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.80	%+		1.73	%+^^		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.48	%+		1.24	%+		(0.91	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§*
Portfolio Turnover Rate		29	%		29	%		23	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.89	%		1.78	%		1.70	%*
Net Investment Income (Loss) to Average Net Assets		1.39	%		1.18	%		(0.91	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.80% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.70% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Equity Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	16.98		$	16.08
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.40			(0.01	)
Net Realized and Unrealized Gain (Loss)		(1.43	)		1.19
Total from Investment Operations		(1.03	)		1.18
Distributions from and/or in Excess of:
Net Investment Income		(0.48	)		(0.28	)
Redemption Fees		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	15.47		$	16.98
Total Return++		(6.07	)%		7.42	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	715,262		$	285,253
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.91	%+		0.91	%+^^*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		0.91	%+		0.91	%+^^*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		2.36	%+		(0.29	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§*
Portfolio Turnover Rate		29	%		29	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.91	%		0.91	%*
Net Investment Income (Loss) to Average Net Assets		2.36	%		(0.29	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.91% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the International Equity Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek long-term capital appreciation by investing primarily in equity securities of non-U.S. issuers. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	—	$	73,479	$	—	$	73,479
Auto Components		—		157,578		—		157,578
Automobiles		—		130,963		—		130,963
Banks		—		342,802		—		342,802
Beverages		—		191,117		—		191,117
Capital Markets		—		64,218		—		64,218
Chemicals		—		100,738		—		100,738
Commercial Services & Supplies		—		20,458		—		20,458
Construction Materials		—		115,049		—		115,049
Diversified Telecommunication Services		—		27,329		—		27,329
Electronic Equipment, Instruments & Components		—		164,560		—		164,560
Energy Equipment & Services		—		22,859		—		22,859
Food & Staples Retailing		—		38,494		—		38,494
Food Products		—		425,488		—		425,488
Household Durables		—		48,721		—		48,721
Household Products		—		218,694		—		218,694
Industrial Conglomerates		—		58,922		—		58,922
Insurance		—		471,707		—		471,707
Machinery		—		99,545		—		99,545
Media		—		122,335		—		122,335

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Metals & Mining	$	76,638	$	108,539		$	—	$	185,177
Oil, Gas & Consumable Fuels		—		252,575			—		252,575
Pharmaceuticals		6,313		641,258			—		647,571
Professional Services		—		60,104			—		60,104
Real Estate Management & Development		—		59,006			—		59,006
Semiconductors & Semiconductor Equipment		—		29,831			—		29,831
Software		—		83,559			—		83,559
Textiles, Apparel & Luxury Goods		—		60,084			—		60,084
Tobacco		—		322,665			—		322,665
Trading Companies & Distributors		—		118,552			—		118,552
Wireless Telecommunication Services		—		47,113			—		47,113
Total Common Stocks		82,951		4,678,342			—		4,761,293
Short-Term Investments
Investment Company		175,317		—			—		175,317
Repurchase Agreement		—		2,643			—		2,643
Total Short-Term Investments		175,317		2,643			—		177,960
Total Assets	$	258,268	$	4,680,985		$	—	$	4,939,253
Liabilities:
Foreign Currency Forward Exchange Contract		—		(475	)		—		(475	)
Total	$	258,268	$	4,680,510		$	—	$	4,938,778

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $4,003,726,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

In connection with transactions in repurchase agreements, a bank as custodian for the Portfolio takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

5. Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management

or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser and/or Sub-Advisers seek to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contract

Unrealized Depreciation on
Foreign Currency Forward
Exchange Contract

Currency Risk

$(475)

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	47,704
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(8,366	)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contract	$	—	$	(475	)

(a) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
Commonwealth Bank of Australia	$	475	$	—	$	—	$	475

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount				$	302,247,000

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase

agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	32,481	(b)	$	—	$	(32,481	)(c)(d)	$	0

(b) Represents market value of loaned securities at period end.

(c) The Portfolio received cash collateral of approximately $33,151,000, of which approximately $30,357,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $2,794,000, which is not reflected in the Portfolio of Investments. In addition, the Portfolio received non-cash collateral of approximately $1,110,000 in the form of U.S. Government agency securities, which the Portfolio cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(d) The actual collateral received is greater than the amount shown here due to overcollateralization.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

pursuant to these contracts and expects the risk of loss to be remote.

9. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

First $10 billion				Over $10 billion
	0.80	%			0.75	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.80% of the Portfolio's average daily net assets.

The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $27,000 of advisory fees were waived and approximately $3,441,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

providing shareholder support services to investors who purchase Class A and Class L shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $1,503,878,000 and $1,546,876,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $84,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	98,659			$	1,326,712			$	1,250,054			$	11			$	175,317

The Portfolio has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she

receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Portfolio.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	144,283	$	—	$	88,057	$	—

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, basis adjustments on certain equity securities designated as passive foreign investment companies and redemptions in kind, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in-Capital (000)
$	47,481			$	(53,905	)		$	6,424

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	41,702			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $4,398,240,000. The aggregate gross unrealized appreciation is approximately $864,778,000 and the aggregate gross unrealized depreciation is approximately $323,765,000 resulting in net unrealized appreciation of approximately $541,013,000.

At December 31, 2014, the Portfolio had available capital loss carryforwards to offset future net capital gains, to the extent provided by regulations, through the indicated expiration dates:

Amount (000)		Expiration*
$	10,001	December 31, 2016
	8,116	December 31, 2017

* Includes capital losses acquired from Morgan Stanley International Value Equity Fund that may be subject to limitation under IRC Section 382 in future years.

offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2014, the Portfolio utilized capital loss carryforwards for U. S. Federal income tax purposes of approximately $89,484,000.

For the year ended December 31, 2014, the Portfolio realized gains from in-kind redemptions of approximately $7,332,000. The gains are not taxable income to the Portfolio.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 45%, 94% and 57%, for Class I, Class A and Class IS shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Equity Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of International Equity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014 and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Equity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the Portfolio's earnings for its taxable period ended December 31, 2014. When distributed, certain earnings may be subject to a maximum tax rate of 15% as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003.

The Portfolio designated up to a maximum of approximately $146,937,000 as taxable at this lower rate.

The Portfolio intends to pass through foreign tax credits of approximately $6,533,000 and has derived net income from sources within foreign countries amounting to approximately $181,302,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIIEANN
1112676 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Real Estate Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					19
Report of Independent Registered Public Accounting Firm					25
Federal Tax Notice					26
U.S. Privacy Policy					27
Director and Officer Information					30

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in International Real Estate Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

International Real Estate Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Real Estate Portfolio Class I	$	1,000.00	$	955.40	$	1,020.16	$	4.93	$	5.09		1.00	%
International Real Estate Portfolio Class A		1,000.00		953.50		1,018.40		6.65		6.87		1.35
International Real Estate Portfolio Class H		1,000.00		953.50		1,018.40		6.65		6.87		1.35
International Real Estate Portfolio Class L		1,000.00		951.00		1,015.88		9.10		9.40		1.85
International Real Estate Portfolio Class IS		1,000.00		954.80		1,020.32		4.78		4.94		0.97

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

International Real Estate Portfolio

The Portfolio seeks to provide current income and long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 1.61%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index (the "Index"), which returned 3.05%, and outperformed the MSCI EAFE Index, which returned -4.90%.

Factors Affecting Performance

• The international real estate securities market gained 3.05% during the 12-month period ending December 31, 2014, as measured by the Index. Europe outperformed the international average and Asia underperformed the international average.

• Performance within the European regional portfolio contributed, while the Asian regional portfolio and top-down global allocation detracted. In Asia, the Portfolio benefited from the overweight to Hong Kong, but this was more than offset by relative losses from stock selection in Japan. In Europe, the Portfolio benefited from stock selection within, and the overweight to, the U.K., and stock selection in the Netherlands; this was partially offset by the negative impact of stock selection in Sweden.

Management Strategies

• The Portfolio is comprised of two regional portfolios with a global allocation which weights the European and Asian regions relative to the Index based on our view of the relative attractiveness of each region in terms of underlying real estate fundamentals and public market valuations. Moreover, both of the regional portfolios reflect our core investment philosophy as a real estate value

investor, which results in the ownership of stocks that we believe provide the best valuation relative to their underlying real estate values, while maintaining portfolio diversification. Our company-specific research leads us to specific preferences for sub-segments within each of the property sectors and countries. For the period ended December 31, 2014, the Portfolio was overweight the Asian listed property sector and underweight the European listed property sector.

• The overweight to the Asian region was predominated by the real estate operating companies (REOCs) in Hong Kong and Japan. The Hong Kong REOCs continue to represent the most significant overweight, as the stocks in our opinion offer highly attractive value given the wide discrepancy between public and private valuations, and relative to other public listed property markets. We believe the significant share price discounts more than reflect any potential downside risks in operating fundamentals and asset values, and the stocks offer attractive risk-adjusted upside potential. Moreover, as the Hong Kong REOCs maintain very modest leverage levels, the discounted valuations are further accentuated and company balance sheets may be less vulnerable to higher interest rates. The Japan REOCs offer attractive value versus the Japan real estate investment trusts (J-REITs), but continue to experience significant volatility as investors assess the likelihood of success of quantitative easing (QE) measures by the Bank of Japan (BOJ). There are expectations for continued upside to asset values from depressed levels, and it is notable that current net asset values (NAVs) are based on cash flows that are near cyclical lows. The Japan REITs sustained their significant NAV premiums after aggressive easing by the BOJ and are trading at the largest share price premiums globally. It is notable that the asset portfolios of the major Japan REOCs, which are largely comprised of prime office assets in Central Tokyo, benefit from stronger operating fundamentals as compared to the generally lower quality asset portfolios of the J-REITs. As a result, we believe the valuations for the Japan REOCs are far more attractive relative to the prevailing valuations for the J-REITs. We remain overweight to the REOCs and underweight the REITs within Japan. The Portfolio was underweight Australia and Singapore REITs on relative valuation.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Real Estate Portfolio

• In Europe, property stocks in the U.K. ended the quarter trading at par to NAVs, while stocks on the Continent traded at premiums to NAVs. The U.K. companies offer attractive value given prospects for continued NAV growth. Prime assets in London are attracting significant foreign investment demand and there is continued strength in operating fundamentals. The strength of investment demand is also spreading beyond London. The Continent is less attractive on a relative basis overall given limited upside potential to asset values due to weak operating fundamentals, a lackluster economy, and lack of a downward adjustment to asset values during the recession. Moreover, we believe the U.K. companies are poised to benefit from better economic prospects and have stronger balance sheets, lower leverage ratios and longer average debt maturities than companies on the Continent. As a result, the Continent remains less attractive relative to the U.K., and within Europe we remain overweight the U.K.

• Western markets continue to recover from significant declines in rents and occupancies. In Europe, there are renewed concerns regarding economic weakness; however, London continues to show strength. Key Asian markets (Hong Kong and Singapore) feature low vacancy levels. Stabilization among financial service tenants has improved the outlook for office operating fundamentals, with the lack of new supply (particularly in Hong Kong) being a key differentiating factor versus previous cycles. There are continued strong operating results in retail assets despite decelerating sales growth. Operating fundamentals in Australia remain weak, and there are continued modest improvements in Tokyo.

• We continue to maintain strong conviction to our long-term, value-oriented, bottom-up stock selection driven investment strategy, which is focused on investing in publicly traded real estate securities that offer exposure to the direct property markets at the best value relative to underlying real estate values and NAV growth prospects.

* Minimum Investment for Class I shares

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, H, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Real Estate Portfolio

Performance Compared to the FTSE
EPRA/NAREIT Developed ex-North America
Real Estate — Net Total Return Index⁽¹⁾ and the
MSCI EAFE Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁷⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		1.61	%		6.26	%		3.97	%		8.34	%
FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index		3.05			7.93			5.49			6.36
MSCI EAFE Index		–4.90			5.33			4.43			4.22
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		1.27			5.97			3.70			8.07
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–4.06			4.84			3.15			7.73
FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index		3.05			7.93			5.49			6.36
MSCI EAFE Index		–4.90			5.33			4.43			4.22
Portfolio — Class H Shares w/o sales charges⁽⁵⁾		1.27			—			—			10.19
Portfolio — Class H Shares with maximum 4.75% sales charges⁽⁵⁾		–3.51			—			—			8.22
FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index		3.05			—			—			11.35
MSCI EAFE Index		–4.90			—			—			8.90
Portfolio — Class L Shares w/o sales charges⁽⁵⁾		0.75			—			—			9.64
FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index		3.05			—			—			11.35
MSCI EAFE Index		–4.90			—			—			8.90
Portfolio — Class IS Shares w/o sales charges⁽⁶⁾		1.60			—			—			2.54
FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index		3.05			—			—			4.54
MSCI EAFE Index		–4.90			—			—			1.91

⁽¹⁾ The FTSE EPRA/NAREIT Developed ex-North America Real Estate — Net Total Return Index is a free float-adjusted market capitalization weighted index designed to reflect the stock performance of companies engaged in the European and Asian real estate markets. The performance of the Index is listed in U.S. dollars and assumes reinvestment of dividends. "Net Total Return" reflects a reduction in total returns after taking into account the withholding tax on dividends by certain foreign countries represented in the Index for periods after 2/18/05 (gross returns used prior to 2/18/05). The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the international equity market performance of developed markets, excluding the US & Canada. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI EAFE Index currently consists of 21 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽⁴⁾ Commenced operations on October 1, 1997.

⁽⁵⁾ Commenced offering on April 27, 2012.

⁽⁶⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

International Real Estate Portfolio

	Shares		Value (000)
Common Stocks (99.8%)
Australia (11.6%)
Dexus Property Group REIT		81,011	$	458
Federation Centres REIT		209,061		487
Goodman Group REIT		316,268		1,458
GPT Group REIT		316,027		1,117
Investa Office Fund REIT		125,217		370
Mirvac Group REIT		569,320		822
Scentre Group REIT (a)		1,036,150		2,946
Stockland REIT		331,348		1,107
Westfield Corp. REIT		392,859		2,872
				11,637
Austria (0.5%)
Atrium European Real Estate Ltd. (a)		63,648		315
BUWOG AG (a)		10,656		211
				526
China (0.8%)
China Resources Land Ltd. (b)		61,000		160
Dalian Wanda Commercial Properties Co., Ltd. H Shares (a)(c)		43,000		274
Guangzhou R&F Properties Co., Ltd. H Shares (b)		263,200		320
				754
Finland (0.8%)
Citycon Oyj		129,503		404
Sponda Oyj		83,769		367
				771
France (6.6%)
Altarea REIT		150		24
Fonciere Des Regions REIT		4,418		409
Gecina SA REIT		6,211		777
ICADE REIT		7,997		640
Klepierre REIT		16,669		718
Mercialys SA REIT		4,641		104
Unibail-Rodamco SE REIT		15,344		3,922
				6,594
Germany (3.4%)
Alstria Office AG REIT (a)		6,764		84
Deutsche Annington Immobilien SE		26,520		902
Deutsche Euroshop AG		8,785		385
Deutsche Wohnen AG		23,458		557
DO Deutsche Office AG REIT (a)		59,832		211
GAGFAH SA (a)		18,070		404
LEG Immobilien AG (a)		10,926		820
				3,363
Hong Kong (23.4%)
Champion REIT		239,000		111
Hang Lung Properties Ltd.		178,000		496
Henderson Land Development Co., Ltd.		125,298		870
Hongkong Land Holdings Ltd.		534,000		3,594
Hysan Development Co., Ltd.		412,836		1,834
Kerry Properties Ltd.		127,771		462

	Shares		Value (000)
Link REIT (The)		489,395	$	3,055
New World Development Co., Ltd.		989,748		1,132
Sino Land Co., Ltd.		166,945		268
Sun Hung Kai Properties Ltd.		525,456		7,946
Swire Properties Ltd.		396,700		1,171
Wharf Holdings Ltd.		337,117		2,421
				23,360
Ireland (0.3%)
Green REIT PLC (a)		60,685		94
Hibernia REIT PLC (a)		163,292		214
				308
Italy (0.3%)
Beni Stabili SpA REIT		436,362		306
Japan (26.2%)
Activia Properties, Inc. REIT		105		913
Advance Residence Investment Corp. REIT		125		334
Aeon Mall Co., Ltd.		3,900		69
Daibiru Corp.		6,800		64
Frontier Real Estate Investment Corp. REIT		15		69
GLP J-REIT		379		420
Hulic Co., Ltd.		55,200		549
Hulic REIT, Inc.		147		222
Japan Real Estate Investment Corp. REIT		249		1,198
Japan Retail Fund Investment Corp. REIT		299		631
Kenedix Office Investment Corp. REIT		16		90
Mitsubishi Estate Co., Ltd.		304,000		6,434
Mitsui Fudosan Co., Ltd.		234,000		6,294
Mori Hills Investment Corp. REIT		418		598
Nippon Building Fund, Inc. REIT		293		1,468
Nippon Healthcare Investment Corp. REIT (a)		6		14
Nippon Prologis, Inc. REIT		508		1,101
NTT Urban Development Corp.		6,000		60
Orix, Inc. J-REIT		341		477
Sumitomo Realty & Development Co., Ltd.		109,000		3,713
Tokyo Tatemono Co., Ltd.		78,000		568
United Urban Investment Corp. REIT		543		853
				26,139
Malta (0.0%)
BGP Holdings PLC (a)(d)(e)		4,769,371		—
Netherlands (1.8%)
Corio N.V. REIT		11,686		570
Eurocommercial Properties N.V. CVA REIT		9,584		407
Vastned Retail N.V. REIT		3,575		161
Wereldhave N.V. REIT		9,249		635
				1,773
Norway (0.4%)
Entra ASA (a)(c)		28,007		286
Norwegian Property ASA (a)		75,416		102
				388

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

International Real Estate Portfolio

	Shares		Value (000)
Singapore (5.3%)
Ascendas Real Estate Investment Trust REIT		196,000	$	352
CapitaCommercial Trust REIT		55,000		73
CapitaLand Ltd.		701,000		1,742
CapitaMall Trust REIT		363,000		559
City Developments Ltd.		59,000		455
Global Logistic Properties Ltd.		617,000		1,154
Keppel DC REIT (a)		127,800		94
Keppel REIT		53,000		49
SPH REIT		226,000		177
UOL Group Ltd.		123,948		650
				5,305
Spain (0.1%)
Hispania Activos Inmobiliarios SAU (a)		11,745		154
Sweden (1.6%)
Atrium Ljungberg AB, Class B		20,002		294
Castellum AB		14,319		224
Fabege AB		18,630		239
Hufvudstaden AB, Class A		64,947		843
				1,600
Switzerland (1.5%)
Mobimo Holding AG (Registered) (a)		426		85
PSP Swiss Property AG (Registered) (a)		13,671		1,177
Swiss Prime Site AG (Registered) (a)		2,824		207
				1,469
United Kingdom (15.2%)
British Land Co., PLC REIT		237,961		2,859
Capital & Counties Properties PLC		72,177		407
Capital & Regional PLC		745,868		610
Derwent London PLC REIT		22,213		1,037
Grainger PLC		215,072		629
Great Portland Estates PLC REIT		80,761		923
Hammerson PLC REIT		169,069		1,580
Helical Bar PLC		208		1
Intu Properties PLC REIT		129,989		672
Land Securities Group PLC REIT		158,032		2,828
LXB Retail Properties PLC (a)		330,988		708
Quintain Estates & Development PLC (a)		460,783		684
Safestore Holdings PLC REIT		96,218		348
Segro PLC REIT		61,592		353
Shaftesbury PLC REIT		16,122		195
ST Modwen Properties PLC		62,111		371
Unite Group PLC		68,813		499
Urban & Civic PLC (a)		121,377		469
				15,173
Total Common Stocks (Cost $101,375)				99,620

	Shares		Value (000)
Short-Term Investment (0.2%)
Investment Company (0.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $174)		173,864	$	174
Total Investments (100.0%) (Cost $101,549) (f)				99,794
Other Assets in Excess of Liabilities (0.0%) (g)				32
Net Assets (100.0%)			$	99,826

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(c) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d) Security has been deemed illiquid at December 31, 2014.

(e) At December 31, 2014, the Portfolio held a fair valued security valued at $0, representing 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(f) The approximate fair value and percentage of net assets, $99,238,000 and 99.4%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(g) Amount is less than 0.05%.

CVA Certificaten Van Aandelen.

REIT Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		55.5	%
Retail		22.5
Office		11.6
Other*		10.4
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Real Estate Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $101,375)	$	99,620
Investment in Security of Affiliated Issuer, at Value (Cost $174)		174
Total Investments in Securities, at Value (Cost $101,549)		99,794
Foreign Currency, at Value (Cost $9)		9
Receivable for Investments Sold		331
Dividends Receivable		182
Tax Reclaim Receivable		30
Receivable for Portfolio Shares Sold		27
Receivable from Affiliate		—	@
Other Assets		35
Total Assets		100,408
Liabilities:
Payable for Advisory Fees		253
Payable for Investments Purchased		114
Payable for Portfolio Shares Redeemed		108
Payable for Professional Fees		45
Payable for Custodian Fees		18
Payable for Sub Transfer Agency Fees — Class I		8
Payable for Sub Transfer Agency Fees — Class A		4
Payable for Sub Transfer Agency Fees — Class H		—	@
Payable for Administration Fees		9
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class H		1
Payable for Transfer Agency Fees — Class L		1
Payable for Directors' Fees and Expenses		1
Payable for Shareholder Services Fees — Class A		1
Payable for Shareholder Services Fees — Class H		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Other Liabilities		16
Total Liabilities		582
Net Assets	$	99,826
Net Assets Consist Of:
Paid-in-Capital	$	702,857
Distributions in Excess of Net Investment Income		(193	)
Accumulated Net Realized Loss		(601,079	)
Unrealized Appreciation (Depreciation) on:
Investments		(1,755	)
Foreign Currency Translations		(4	)
Net Assets	$	99,826

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	94,269
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		4,752,595
Net Asset Value, Offering and Redemption Price Per Share	$	19.84
CLASS A:
Net Assets	$	2,792
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		140,766
Net Asset Value, Redemption Price Per Share	$	19.84
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.10
Maximum Offering Price Per Share	$	20.94
CLASS H:
Net Assets	$	113
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		5,686
Net Asset Value, Redemption Price Per Share	$	19.79
Maximum Sales Load		4.75	%
Maximum Sales Charge	$	0.99
Maximum Offering Price Per Share	$	20.78
CLASS L:
Net Assets	$	95
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		4,801
Net Asset Value, Offering and Redemption Price Per Share	$	19.69
CLASS IS:
Net Assets	$	2,557
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		128,970
Net Asset Value, Offering and Redemption Price Per Share	$	19.83

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Real Estate Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $229 of Foreign Taxes Withheld)	$	3,860
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		3,860
Expenses:
Advisory Fees (Note B)		1,089
Custodian Fees (Note F)		132
Administration Fees (Note C)		109
Professional Fees		101
Sub Transfer Agency Fees		2
Sub Transfer Agency Fees — Class I		41
Sub Transfer Agency Fees — Class A		4
Sub Transfer Agency Fees — Class H		—	@
Registration Fees		39
Shareholder Reporting Fees		23
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class H (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		10
Shareholder Services Fees — Class A (Note D)		8
Shareholder Services Fees — Class H (Note D)		—	@
Distribution and Shareholder Services Fees — Class L (Note D)		1
Directors' Fees and Expenses		4
Other Expenses		14
Total Expenses		1,589
Waiver of Advisory Fees (Note B)		(199	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(11	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class H (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		1,369
Net Investment Income		2,491
Realized Loss:
Investments Sold		(36,307	)
Foreign Currency Transactions		(44	)
Net Realized Loss		(36,351	)
Change in Unrealized Appreciation (Depreciation):
Investments		34,127
Foreign Currency Translations		(7	)
Net Change in Unrealized Appreciation (Depreciation)		34,120
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(2,231	)
Net Increase in Net Assets Resulting from Operations	$	260

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Real Estate Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,491		$	2,694
Net Realized Loss		(36,351	)		(15,802	)
Net Change in Unrealized Appreciation (Depreciation)		34,120			20,478
Net Increase in Net Assets Resulting from Operations		260			7,370
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(2,415	)		(7,544	)
*Class A:**
Net Investment Income		(58	)		(208	)
Class H:
Net Investment Income		(2	)		(6	)
Class L:
Net Investment Income		(1	)		(1	)
Class IS:
Net Investment Income		(701	)		(—	@)
Total Distributions		(3,177	)		(7,759	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		16,918			28,835
Distributions Reinvested		1,200			3,974
Redeemed		(53,548	)		(40,869	)
*Class A:**
Subscribed		306			1,626
Distributions Reinvested		52			184
Redeemed		(887	)		(2,856	)
Class H:
Subscribed		—			97
Distributions Reinvested		2			6
Redeemed		—			(1	)
Class L:
Subscribed		21			62
Distributions Reinvested		1			1
Class IS:
Subscribed		40,510			10	**
Distributions Reinvested		701			—
Redeemed		(36,082	)		—
Net Decrease in Net Assets Resulting from Capital Share Transactions		(30,806	)		(8,931	)
Redemption Fees		1			22
Total Decrease in Net Assets		(33,722	)		(9,298	)
Net Assets:
Beginning of Period		133,548			142,846
End of Period (Including Distributions in Excess of Net Investment Income of $(193) and $(99))	$	99,826		$	133,548

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		828			1,416
Shares Issued on Distributions Reinvested		60			206
Shares Redeemed		(2,641	)		(1,982	)
Net Decrease in Class I Shares Outstanding		(1,753	)		(360	)
*Class A:**
Shares Subscribed		16			78
Shares Issued on Distributions Reinvested		3			10
Shares Redeemed		(45	)		(141	)
Net Decrease in Class A Shares Outstanding		(26	)		(53	)
Class H:
Shares Subscribed		—			5
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		—			(—	@@)
Net Increase in Class H Shares Outstanding		—	@@		5
Class L:
Shares Subscribed		1			3
Shares Issued on Distributions Reinvested		—	@@		—	@@
Net Increase in Class L Shares Outstanding		1			3
Class IS:
Shares Subscribed		1,915			1	**
Shares Issued on Distributions Reinvested		36			—
Shares Redeemed		(1,823	)		—
Net Increase in Class IS Shares Outstanding		128			1	**

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P shares were renamed Class A shares.

** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Real Estate Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	19.99		$	20.16		$	14.66		$	18.85		$	17.80
Income (Loss) from Investment Operations:
Net Investment Income†		0.39			0.41			0.44			0.39			0.69
Net Realized and Unrealized Gain (Loss)		(0.07	)		0.65			5.89			(4.04	)		0.98
Total from Investment Operations		0.32			1.06			6.33			(3.65	)		1.67
Distributions from and/or in Excess of:
Net Investment Income		(0.47	)		(1.23	)		(0.83	)		(0.54	)		(0.62	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	19.84		$	19.99		$	20.16		$	14.66		$	18.85
Total Return++		1.61	%		5.56	%		44.05	%		(19.92	)%		9.51	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	94,269		$	130,023		$	138,390		$	207,695		$	397,514
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.00	%+		1.00	%+		1.00	%+		1.00	%+		0.98	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.98	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.91	%+		2.00	%+		2.54	%+		2.17	%+		3.97	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		59	%		40	%		31	%		18	%		64	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.16	%		1.23	%+		1.12	%		N/A			N/A
Net Investment Income to Average Net Assets		1.75	%		1.76	%+		2.42	%		N/A			N/A

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Real Estate Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	19.98		$	20.14		$	14.65		$	18.83		$	17.77
Income (Loss) from Investment Operations:
Net Investment Income†		0.31			0.35			0.39			0.34			0.64
Net Realized and Unrealized Gain (Loss)		(0.06	)		0.66			5.89			(4.04	)		0.98
Total from Investment Operations		0.25			1.01			6.28			(3.70	)		1.62
Distributions from and/or in Excess of:
Net Investment Income		(0.39	)		(1.17	)		(0.79	)		(0.48	)		(0.56	)
Redemption Fees		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net Asset Value, End of Period	$	19.84		$	19.98		$	20.14		$	14.65		$	18.83
Total Return++		1.27	%		5.28	%		43.71	%		(20.16	)%		9.26	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,792		$	3,331		$	4,431		$	3,400		$	5,547
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.35	%+		1.27	%+^		1.25	%+		1.25	%+		1.23	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.23	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.55	%+		1.72	%+		2.23	%+		1.92	%+		3.72	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		59	%		40	%		31	%		18	%		64	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.58	%		1.53	%+		1.38	%		N/A			N/A
Net Investment Income to Average Net Assets		1.32	%		1.47	%+		2.10	%		N/A			N/A

@ Effective September 9, 2013, Class P shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Real Estate Portfolio

	Class H
	Year Ended December 31,						Period from April 27, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	19.95		$	20.13		$	17.31
Income (Loss) from Investment Operations:
Net Investment Income†		0.31			0.37			0.22
Net Realized and Unrealized Gain (Loss)		(0.07	)		0.63			3.40
Total from Investment Operations		0.24			1.00			3.62
Distributions from and/or in Excess of:
Net Investment Income		(0.40	)		(1.18	)		(0.80	)
Redemption Fees		0.00	‡		—			—
Net Asset Value, End of Period	$	19.79		$	19.95		$	20.13
Total Return++		1.27	%		5.27	%		21.66	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	113		$	111		$	13
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.35	%+		1.28	%+^^		1.25	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.54	%+		1.83	%+		1.85	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§*
Portfolio Turnover Rate		59	%		40	%		31	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.92	%		1.92	%+		1.43	%*
Net Investment Income (Loss) to Average Net Assets		(0.03	)%		1.20	%+		1.67	%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class H shares. Prior to September 16, 2013, the maximum ratio was 1.25% for Class H shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Real Estate Portfolio

	Class L
	Year Ended December 31,						Period from April 27, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	19.86		$	20.13		$	17.31
Income (Loss) from Investment Operations:
Net Investment Income†		0.21			0.22			0.16
Net Realized and Unrealized Gain (Loss)		(0.06	)		0.68			3.40
Total from Investment Operations		0.15			0.90			3.56
Distributions from and/or in Excess of:
Net Investment Income		(0.32	)		(1.17	)		(0.74	)
Redemption Fees		0.00	‡		—			—
Net Asset Value, End of Period	$	19.69		$	19.86		$	20.13
Total Return++		0.75	%		4.73	%		21.28	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	95		$	73		$	12
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.85	%+		1.81	%+^^		1.75	%*+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.05	%+		1.08	%+		1.37	%*+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§*
Portfolio Turnover Rate		59	%		40	%		31	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.90	%		3.44	%+		1.93	%*
Net Investment Income (Loss) to Average Net Assets		(1.00	)%		(0.55	)%+		1.19	%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Real Estate Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	19.99		$	19.97
Income from Investment Operations:
Net Investment Income†		0.23			0.11
Net Realized and Unrealized Gain		0.09			0.22
Total from Investment Operations		0.32			0.33
Distributions from and/or in Excess of:
Net Investment Income		(0.48	)		(0.31	)
Redemption Fees		0.00	‡		—
Net Asset Value, End of Period	$	19.83		$	19.99
Total Return++		1.60	%		1.68	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	2,557		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.97	%+		0.97	%+^^*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.14	%+		1.76	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§*
Portfolio Turnover Rate		59	%		40	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		1.13	%		6.46	%*
Net Investment Income (Loss) to Average Net Assets		0.98	%		(3.73	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.97% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the International Real Estate Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek a combination of current income and long-term capital appreciation by investing primarily in equity securities of companies in the real estate industry located throughout the world (excluding the United States and Canada). The Portfolio has capital subscription commitments to certain investee companies for this same purpose, the details of which are disclosed in the Unfunded Commitments note. The Portfolio offers five classes of shares — Class I, Class A, Class H, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P shares were renamed Class A shares. Effective August 16, 2013, the Fund has suspended offering Class H shares of the Portfolio to all investors.

designated as the primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

The Portfolio invests a significant portion of its assets in securities of real estate investment trusts ("REITs"). The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Portfolio.

based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Diversified	$	368	$	55,041	$	—	†	$	55,409	†
Health Care		14		—		—			14
Industrial		—		4,838		—			4,838
Mixed Industrial/Office		—		458		—			458
Office		—		11,574		—			11,574
Residential		—		4,516		—			4,516
Retail		—		22,463		—			22,463
Self Storage		—		348		—			348
Total Common Stocks		382		99,238		—	†		99,620	†

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Short-Term Investment
Investment Company	$	174	$	—	$	—		$	174
Total Assets	$	556	$	99,238	$	—	†	$	99,794	†

† Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $88,445,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)
Beginning Balance	$	—	†
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—
Realized gains (losses)		—
Ending Balance	$	—	†
Net change in unrealized appreciation (depreciation) from investment still held as of December 31, 2014	$	—

† Includes one security which is valued at zero.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

of foreign securities markets and the possibility of political or economic instability.

4. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares, Class H, Class L shares and Class IS shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

5. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.80% of the average daily net assets of the Portfolio.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.35% for Class H shares, 1.85% for Class L shares and 0.97% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $199,000 of advisory fees were waived and approximately $20,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Fund's Distributor of Portfolio shares pursuant to a Distribution Agreement. The Fund has adopted Shareholder Services Plan with respect to Class A and Class H shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Portfolio pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A and Class H shares.

purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $83,038,000 and $78,662,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	1,717			$	60,142			$	61,685			$	—	@		$	174

@ Amount is less than $500.

During the year ended December 31, 2014, the Portfolio incurred approximately $2,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator, Sub-Advisers and Distributor, for portfolio transactions executed on behalf of the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	3,177	$	—	$	7,760	$	—

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, in-kind

redemptions and basis adjustments on certain equity securities designated as passive foreign investment companies, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	592			$	11,801			$	(12,393	)

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	1,241			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $115,136,000. The aggregate gross unrealized appreciation is approximately $5,247,000 and the aggregate gross unrealized depreciation is approximately $20,589,000 resulting in net unrealized depreciation of approximately $15,342,000.

At December 31, 2014, the Portfolio had available unused short-term capital losses of approximately $2,493,000 and long-term capital losses of approximately $203,051,000 that do not have an expiration date.

Amount (000)		Expiration
$	98,798	December 31, 2016
	217,627	December 31, 2017
	66,872	December 31, 2018

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 73%, 78% and 99%, for Class I, Class L and Class IS shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Real Estate Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of International Real Estate Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Real Estate Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014 the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Income Tax Information (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the Portfolio's earnings for the taxable year ended December 31, 2014.

When distributed, certain earnings may be subject to a maximum tax rate of 15% as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Portfolio designated up to a maximum of approximately $389,000 as taxable at this lower rate.

The Portfolio intends to pass through foreign tax credits of approximately $225,000, and has derived net income from sources within foreign countries amounting to approximately $4,443,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIIREANN
1111566 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Real Estate Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					10
Statement of Operations					12
Statements of Changes in Net Assets					13
Financial Highlights					15
Notes to Financial Statements					19
Report of Independent Registered Public Accounting Firm					26
Federal Tax Notice					27
U.S. Privacy Policy					28
Director and Officer Information					31

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Real Estate Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Real Estate Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Real Estate Portfolio Class I	$	1,000.00	$	1,025.90	$	1,019.86	$	5.41	$	5.40		1.06	%
Global Real Estate Portfolio Class A		1,000.00		1,025.40		1,019.00		6.28		6.26		1.23
Global Real Estate Portfolio Class L		1,000.00		1,022.40		1,016.13		9.18		9.15		1.80
Global Real Estate Portfolio Class IS		1,000.00		1,026.70		1,020.37		4.90		4.89		0.96

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Real Estate Portfolio

The Portfolio seeks to provide current income and capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 14.08%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors (the "Index"), which returned 15.68%, and outperformed the MSCI World Index, which returned 4.94%.

Factors Affecting Performance

• The global real estate securities market gained 15.68% during the 12-month period ending December 31, 2014, as measured by the Index. North America was the best performing region in the year, Europe underperformed the global average, and Asia significantly underperformed the global average.

• During the year, real estate share prices continued to be largely influenced by transactional evidence in the private real estate markets of strong investor demand for core assets at valuations that demonstrate the acceptance of low expected returns as well as investors' search for yield. Share prices also appeared to fluctuate alongside renewed downward pressure on yields for prime assets due in part to lower sovereign yields. The U.S. market posted the best returns based upon significant transaction activity demonstrating improved private market values, strong operating fundamentals, lower interest rates and the strength of the U.S. dollar.

• Performance within the U.S. and European regional portfolios contributed to relative performance, while the Asian regional portfolio detracted. Top-down global allocation detracted. In Asia, the Portfolio benefited from the overweight to Hong Kong; this was more than offset by relative losses from stock selection in Japan. In Europe, the Portfolio benefited from stock selection within and the overweight to the U.K. and stock selection in the Netherlands; this was partially offset by the negative impact of stock selection in Sweden. In the U.S., the Portfolio benefited from the underweight to and stock selection within the net lease sector, the overweight to the apartment sector and stock selection in the shopping center and mall sectors;

this was partially offset by stock selection in the hotel and health care sectors, which detracted.

Management Strategies

• The global portfolio is comprised of three regional portfolios with a global allocation which weights each of the three major regions (U.S., Europe and Asia) relative to the Index based on our view of the relative attractiveness of each region in terms of underlying real estate fundamentals and public market valuations. Moreover, each of the regional portfolios reflects our core investment philosophy as a real estate value investor, which results in the ownership of stocks that we believe provide the best valuation relative to their underlying real estate values, while maintaining portfolio diversification. Our company-specific research leads us to specific preferences for sub-segments within each of the property sectors and countries. For the period ended December 31, 2014, the Portfolio was overweight the Asian listed property sector, and underweight the U.S. and European listed property sectors.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Real Estate Portfolio

share price premiums globally. It is notable that the asset portfolios of the major Japan REOCs, which are largely comprised of prime office assets in Central Tokyo, benefit from stronger operating fundamentals as compared to the generally lower-quality asset portfolios of the J-REITs. As a result, we believe the valuations for the Japan REOCs are far more attractive relative to the prevailing valuations for the J-REITs. We remain overweight to the REOCs and underweight the REITs within Japan. The Portfolio was underweight Australia and Singapore REITs on relative valuation.

• In Europe, property stocks in the U.K. ended the year trading at par to NAVs, while stocks on the Continent traded at premiums to NAVs. The U.K. companies offer attractive value given prospects for continued NAV growth. Prime assets in London are attracting significant foreign investment demand and there is continued strength in operating fundamentals. The strength of investment demand is also spreading beyond London. The Continent is less attractive on a relative basis overall given limited upside potential to asset values due to weak operating fundamentals, a lackluster economy, and lack of a downward adjustment to asset values during the recession. Moreover, we believe the U.K. companies are poised to benefit from better economic prospects and have stronger balance sheets, lower leverage ratios and longer average debt maturities than companies on the Continent. As a result, the Continent remains less attractive relative to the U.K., and within Europe we remain overweight the U.K.

• The Portfolio was underweight the U.S. With asset values for high-quality assets having fully recovered and now, on average, 15% in excess of their all-time peak levels achieved in 2007, the overall REIT market ended the period at approximately a 5% premium to NAVs.⁽ⁱ⁾ This reflects a bifurcation in the market between the core property sectors (apartments, malls) trading at discounts/par to NAVs and finance-company/dividend-oriented stocks (health care, net lease) trading at significant premiums to NAVs. Within the U.S., our company-specific research leads us to an overweighting in the Portfolio to a group of companies that are focused in the ownership of high

quality malls, apartments, upscale hotels, central business district (CBD) office assets and a number of out-of-favor companies and an underweighting to companies focused in the ownership of health care and net lease assets.

• Western markets continue to recover from significant declines in rents and occupancies. In the U.S., impressive operating results continue to be posted, led by the storage, hotel, mall and apartment sectors as economic growth improves and supply remains largely subdued. In Europe, there are renewed concerns regarding economic weakness; however, London continues to show strength.

• Key Asian markets (Hong Kong and Singapore) feature low vacancy levels. Stabilization among financial service tenants has improved the outlook for office operating fundamentals, with the lack of new supply (particularly in Hong Kong) being a key differentiating factor versus previous cycles. There are continued strong operating results in retail assets despite decelerating sales growth. Operating fundamentals in Australia remain weak, and there are continued modest improvements in Tokyo.

* Minimum Investment for Class I shares

** Commenced Operations on August 30, 2006.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

⁽ⁱ⁾ Source: Morgan Stanley Investment Management and Green Street Advisors, Inc.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Real Estate Portfolio

Performance Compared to the FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors⁽¹⁾, the MSCI World Index⁽²⁾and the Lipper Global Real Estate Funds Average⁽³⁾

	Period Ended December 31, 2014 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁸⁾
Portfolio — Class I Shares w/o sales charges⁽⁵⁾		14.08	%		10.80	%		—		4.11	%
FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors		15.68			11.75			—		3.73
MSCI World Index		4.94			10.20			—		4.97
Lipper Global Real Estate Funds Average		14.63			10.75			—		2.72
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		13.88			10.52			—		3.83
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		7.86			9.34			—		3.17
FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors		15.68			11.75			—		3.73
MSCI World Index		4.94			10.20			—		4.97
Lipper Global Real Estate Funds Average		14.63			10.75			—		2.72
Portfolio — Class L Shares w/o sales charges⁽⁶⁾		13.27			9.98			—		4.04
FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors		15.68			11.75			—		4.61
MSCI World Index		4.94			10.20			—		4.56
Lipper Global Real Estate Funds Average		14.63			10.75			—		4.33
Portfolio — Class IS Shares w/o sales charges⁽⁷⁾		14.27			—			—		11.73
FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors		15.68			—			—		13.09
MSCI World Index		4.94			—			—		10.75
Lipper Global Real Estate Funds Average		14.63			—			—		12.42

⁽¹⁾ The FTSE EPRA/NAREIT Developed Real Estate Index — Net Total Return to U.S. Investors is a market capitalization weighted index designed to reflect the stock performance of companies engaged in the North American, European and Asian real estate markets. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. "Net Total Return to U.S. investors" reflects a reduction in total returns after taking into account the withholding tax on dividends by certain foreign countries represented in the Index for periods after 1/31/05 (gross returns used prior to 1/31/05). The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the global equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Index currently consists of 23 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽³⁾ The Lipper Global Real Estate Funds Average tracks the performance of all funds in the Lipper Global Real Estate Funds classification. The Average, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. As of the date of this report, the Portfolio was in the Lipper Global Real Estate Funds classification.

⁽⁵⁾ Commenced operations on August 30, 2006.

⁽⁶⁾ Commenced offering on June 16, 2008.

⁽⁷⁾ Commenced offering September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.2%)
Australia (5.5%)
Dexus Property Group REIT		974,307	$	5,510
Federation Centres REIT		2,505,076		5,830
Goodman Group REIT		3,789,682		17,470
GPT Group REIT		3,746,815		13,237
Investa Office Fund REIT		1,551,332		4,582
Mirvac Group REIT		6,840,619		9,879
Scentre Group REIT (a)		12,415,681		35,305
Stockland REIT		3,970,381		13,263
Westfield Corp. REIT		4,696,571		34,338
				139,414
Austria (0.2%)
Atrium European Real Estate Ltd. (a)		655,105		3,242
BUWOG AG (a)		115,510		2,289
				5,531
Brazil (0.5%)
BR Malls Participacoes SA		759,461		4,644
BR Properties SA		815,000		3,110
Iguatemi Empresa de Shopping Centers SA		604,701		5,555
				13,309
Canada (2.0%)
Boardwalk REIT		140,108		7,422
Brookfield Canada Office Properties REIT		224,222		5,203
Calloway REIT		91,686		2,154
Canadian Apartment Properties REIT		45,728		989
Crombie Real Estate Investment Trust REIT		306,366		3,407
Extendicare, Inc.		191,580		1,075
First Capital Realty, Inc.		456,320		7,329
RioCan REIT		1,035,708		23,562
				51,141
China (0.3%)
China Resources Land Ltd. (b)		723,000		1,898
Dalian Wanda Commercial Properties Co., Ltd. H Shares (a)(c)		503,500		3,214
Guangzhou R&F Properties Co., Ltd. H Shares (b)		3,080,000		3,746
				8,858
Finland (0.4%)
Citycon Oyj		1,390,428		4,335
Sponda Oyj		946,533		4,146
				8,481
France (2.9%)
Altarea REIT		4,231		675
Fonciere Des Regions REIT		47,231		4,370
Gecina SA REIT		66,538		8,328
ICADE REIT		87,514		7,008
Klepierre REIT		183,267		7,894
Mercialys SA REIT		49,832		1,111
Unibail-Rodamco SE REIT		171,199		43,757
				73,143

	Shares		Value (000)
Germany (1.5%)
Alstria Office AG REIT (a)		94,534	$	1,176
Deutsche Annington Immobilien SE		290,264		9,873
Deutsche Euroshop AG		95,595		4,186
Deutsche Wohnen AG		269,528		6,404
DO Deutsche Office AG REIT (a)		523,570		1,845
GAGFAH SA (a)		196,116		4,388
LEG Immobilien AG (a)		123,337		9,253
				37,125
Hong Kong (11.3%)
Champion REIT		2,866,000		1,330
Hang Lung Properties Ltd.		2,127,000		5,928
Henderson Land Development Co., Ltd.		1,497,335		10,394
Hongkong Land Holdings Ltd.		6,372,000		42,888
Hysan Development Co., Ltd.		4,944,014		21,968
Kerry Properties Ltd.		1,529,720		5,527
Link REIT (The)		5,914,275		36,919
New World Development Co., Ltd.		12,065,109		13,800
Sino Land Co., Ltd.		2,831,637		4,545
Sun Hung Kai Properties Ltd.		6,477,367		97,947
Swire Properties Ltd.		4,753,400		14,028
Wharf Holdings Ltd.		4,044,763		29,046
				284,320
Ireland (0.1%)
Green REIT PLC (a)		578,985		899
Hibernia REIT PLC (a)		1,650,585		2,161
				3,060
Italy (0.1%)
Beni Stabili SpA REIT		4,750,738		3,336
Japan (12.4%)
Activia Properties, Inc. REIT		1,246		10,837
Advance Residence Investment Corp. REIT		1,502		4,011
Aeon Mall Co., Ltd.		46,400		820
Daibiru Corp.		81,200		763
Frontier Real Estate Investment Corp. REIT		176		805
GLP J-REIT		4,518		5,007
Hulic Co., Ltd.		654,700		6,509
Hulic REIT, Inc.		1,752		2,649
Japan Real Estate Investment Corp. REIT		2,984		14,361
Japan Retail Fund Investment Corp. REIT		3,583		7,556
Kenedix Office Investment Corp. REIT		194		1,089
Mitsubishi Estate Co., Ltd.		3,587,000		75,916
Mitsui Fudosan Co., Ltd.		2,768,000		74,447
Mori Hills Investment Corp. REIT		4,989		7,139
Nippon Building Fund, Inc. REIT		3,501		17,541
Nippon Healthcare Investment Corp. REIT (a)		68		158
Nippon Prologis, Inc. REIT		6,069		13,157
NTT Urban Development Corp.		135,300		1,357

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
Japan (cont'd)
Orix, Inc. J-REIT		4,559	$	6,382
Sumitomo Realty & Development Co., Ltd.		1,301,000		44,319
Tokyo Tatemono Co., Ltd.		981,000		7,144
United Urban Investment Corp. REIT		6,358		9,987
				311,954
Malta (0.0%)
BGP Holdings PLC (a)(d)(e)		12,867,024		—
Netherlands (0.8%)
Corio N.V. REIT		133,012		6,492
Eurocommercial Properties N.V. CVA REIT		103,235		4,379
Vastned Retail N.V. REIT		42,058		1,900
Wereldhave N.V. REIT		103,085		7,075
				19,846
Norway (0.2%)
Entra ASA (a)(c)		304,419		3,108
Norwegian Property ASA (a)		894,133		1,212
				4,320
Singapore (2.5%)
Ascendas Real Estate Investment Trust REIT		2,347,000		4,213
CapitaCommercial Trust REIT		654,000		866
CapitaLand Ltd.		8,570,000		21,293
CapitaMall Trust REIT		4,355,000		6,701
City Developments Ltd.		705,000		5,443
Global Logistic Properties Ltd.		7,455,000		13,943
Keppel DC REIT (a)		1,526,000		1,123
SPH REIT		3,085,000		2,422
UOL Group Ltd.		1,480,221		7,768
				63,772
Spain (0.1%)
Hispania Activos Inmobiliarios SAU (a)		126,506		1,657
Sweden (0.7%)
Atrium Ljungberg AB, Class B		205,513		3,024
Castellum AB		156,261		2,437
Fabege AB		194,715		2,499
Hufvudstaden AB, Class A		714,207		9,271
				17,231
Switzerland (0.6%)
Mobimo Holding AG (Registered) (a)		4,263		854
PSP Swiss Property AG (Registered) (a)		150,736		12,979
Swiss Prime Site AG (Registered) (a)		28,895		2,117
				15,950
United Kingdom (6.7%)
British Land Co., PLC REIT		2,668,143		32,053
Capital & Counties Properties PLC		835,840		4,715
Capital & Regional PLC		7,249,547		5,929
Derwent London PLC REIT		241,009		11,257
Grainger PLC		2,315,557		6,777
Great Portland Estates PLC REIT		893,655		10,213
Hammerson PLC REIT		1,911,493		17,866
Helical Bar PLC		2,122		13

	Shares		Value (000)
Intu Properties PLC REIT		1,451,549	$	7,506
Land Securities Group PLC REIT		1,759,735		31,488
LXB Retail Properties PLC (a)		3,749,232		8,018
Quintain Estates & Development PLC (a)		4,589,527		6,809
Safestore Holdings PLC REIT		1,031,578		3,729
Segro PLC REIT		678,346		3,888
Shaftesbury PLC REIT		176,300		2,138
ST Modwen Properties PLC		709,056		4,235
Unite Group PLC		768,884		5,571
Urban & Civic PLC (a)		1,324,935		5,121
Workspace Group PLC REIT		55,604		657
				167,983
United States (49.4%)
Acadia Realty Trust REIT		143,781		4,605
Alexandria Real Estate Equities, Inc. REIT		92,740		8,230
American Realty Capital Healthcare Trust, Inc. REIT		487,249		5,798
AvalonBay Communities, Inc. REIT		477,149		77,961
BioMed Realty Trust, Inc. REIT		356,910		7,688
Boston Properties, Inc. REIT		388,125		49,948
Camden Property Trust REIT		357,388		26,390
Chesapeake Lodging Trust		338,998		12,614
Corporate Office Properties Trust REIT		126,480		3,588
Cousins Properties, Inc. REIT		1,120,225		12,793
CubeSmart REIT		164,213		3,624
DDR Corp. REIT		173,790		3,191
Douglas Emmett, Inc. REIT		417,697		11,863
Duke Realty Corp. REIT		496,340		10,026
Equity Lifestyle Properties, Inc. REIT		343,184		17,691
Equity One, Inc. REIT		113,306		2,873
Equity Residential REIT		1,433,952		103,015
Essex Property Trust, Inc. REIT		75,644		15,628
Exeter Industrial Value Fund, LP REIT (a)(d)(e)(f)		1,860,000		1,661
Extended Stay America, Inc. (g)		166,130		3,208
Federal Realty Investment Trust REIT		56,824		7,584
Forest City Enterprises, Inc., Class A (a)		279,459		5,953
General Growth Properties, Inc. REIT		1,955,234		55,001
HCP, Inc. REIT		310,731		13,682
Health Care REIT, Inc.		113,280		8,572
Healthcare Realty Trust, Inc. REIT		183,836		5,022
Hilton Worldwide Holdings, Inc. (a)		566,304		14,775
Host Hotels & Resorts, Inc. REIT		3,664,633		87,108
Hudson Pacific Properties, Inc. REIT		409,296		12,303
Kimco Realty Corp. REIT		485,810		12,213
KTR Industrial Fund II, LP REIT (a)(d)(e)(f)		4,597,826		5,012
La Quinta Holdings, Inc. (a)		149,967		3,308
Lexington Realty Trust REIT		28,300		311
Liberty Property Trust REIT		439,670		16,545
Macerich Co. (The) REIT		463,384		38,651
Mack-Cali Realty Corp. REIT		674,497		12,856
Mid-America Apartment Communities, Inc. REIT		237,740		17,754
National Retail Properties, Inc. REIT		409,446		16,120
New York REIT, Inc.		59,502		630
Paramount Group, Inc. REIT (a)		325,601		6,053

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
United States (cont'd)
ProLogis, Inc. REIT		697,611	$	30,018
PS Business Parks, Inc. REIT		1,313		104
Public Storage REIT		334,765		61,881
Realty Income Corp. REIT		185,861		8,867
Regency Centers Corp. REIT		588,018		37,504
Rexford Industrial Realty, Inc. REIT		258,992		4,069
Senior Housing Properties Trust REIT		1,376,548		30,436
Simon Property Group, Inc. REIT		817,463		148,868
Sovran Self Storage, Inc. REIT		10,070		878
Starwood Hotels & Resorts Worldwide, Inc.		504,307		40,884
STORE Capital Corp. REIT		217,775		4,706
Sunstone Hotel Investors, Inc. REIT		439,655		7,259
Tanger Factory Outlet Centers, Inc. REIT		751,619		27,780
Ventas, Inc. REIT		394,403		28,279
Vornado Realty Trust REIT		761,241		89,606
WP Carey, Inc. REIT		77,649		5,443
				1,248,430
Total Common Stocks (Cost $2,086,557)				2,478,861
Short-Term Investment (2.0%)
Investment Company (2.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $51,296)		51,296,147		51,296
Total Investments (100.2%) (Cost $2,137,853) (h)				2,530,157
Liabilities in Excess of Other Assets (-0.2%)				(4,469	)
Net Assets (100.0%)			$	2,525,688

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(c) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d) Security has been deemed illiquid at December 31, 2014.

(e) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $6,673,000, representing 0.3% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(f) Restricted security valued at fair value and not registered under the Securities Act of 1933, Exeter Industrial Value Fund, LP was acquired between 11/07 - 4/11 and has a current cost basis of approximately $1,451,000. KTR Industrial Fund II, LP was acquired between 1/09 - 5/12 and has a current cost basis of $1,616,000. At December 31, 2014, these securities had an aggregate market value of approximately $6,673,000 representing 0.3% of net assets.

(g) Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(h) The approximate fair value and percentage of net assets, $1,174,795,000 and 46.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

CVA Certificaten Van Aandelen.

REIT Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		30.1	%
Retail		26.6
Other*		13.5
Residential		12.5
Office		10.6
Lodging/Resorts		6.7
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Real Estate Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,086,557)	$	2,478,861
Investment in Security of Affiliated Issuer, at Value (Cost $51,296)		51,296
Total Investments in Securities, at Value (Cost $2,137,853)		2,530,157
Foreign Currency, at Value (Cost $4,694)		4,643
Dividends Receivable		8,470
Receivable for Portfolio Shares Sold		2,534
Receivable for Investments Sold		1,987
Tax Reclaim Receivable		198
Receivable from Affiliate		1
Other Assets		89
Total Assets		2,548,079
Liabilities:
Payable for Portfolio Shares Redeemed		13,394
Payable for Advisory Fees		5,204
Payable for Investments Purchased		2,996
Payable for Sub Transfer Agency Fees — Class I		380
Payable for Sub Transfer Agency Fees — Class A		32
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Administration Fees		172
Payable for Custodian Fees		54
Payable for Professional Fees		37
Payable for Shareholder Services Fees — Class A		23
Payable for Distribution and Shareholder Services Fees — Class L		3
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class IS		1
Other Liabilities		86
Total Liabilities		22,391
Net Assets	$	2,525,688
Net Assets Consist Of:
Paid-in-Capital	$	2,249,857
Distributions in Excess of Net Investment Income		(18,176	)
Accumulated Net Realized Loss		(98,225	)
Unrealized Appreciation (Depreciation) on:
Investments		392,304
Foreign Currency Translations		(72	)
Net Assets	$	2,525,688

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	1,828,656
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		164,692,067
Net Asset Value, Offering and Redemption Price Per Share	$	11.10
CLASS A:
Net Assets	$	105,766
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		9,572,148
Net Asset Value, Redemption Price Per Share	$	11.05
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.61
Maximum Offering Price Per Share	$	11.66
CLASS L:
Net Assets	$	4,755
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		435,866
Net Asset Value, Offering and Redemption Price Per Share	$	10.91
CLASS IS:
Net Assets	$	586,511
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		52,798,613
Net Asset Value, Offering and Redemption Price Per Share	$	11.11

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Real Estate Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2,524 of Foreign Taxes Withheld)	$	67,785
Dividends from Security of Affiliated Issuer (Note G)		11
Interest from Securities of Unaffiliated Issuers		1
Total Investment Income		67,797
Expenses:
Advisory Fees (Note B)		19,757
Administration Fees (Note C)		1,860
Sub Transfer Agency Fees		225
Sub Transfer Agency Fees — Class I		1,351
Sub Transfer Agency Fees — Class A		79
Sub Transfer Agency Fees — Class L		1
Custodian Fees (Note F)		316
Shareholder Services Fees — Class A (Note D)		245
Distribution and Shareholder Services Fees — Class L (Note D)		35
Shareholder Reporting Fees		245
Professional Fees		93
Directors' Fees and Expenses		52
Registration Fees		43
Transfer Agency Fees — Class I (Note E)		16
Transfer Agency Fees — Class A (Note E)		6
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		3
Pricing Fees		15
Other Expenses		42
Total Expenses		24,386
Reimbursement of Class Specific Expenses — Class I (Note B)		(83	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(—	@)
Rebate from Morgan Stanley Affiliate (Note G)		(28	)
Net Expenses		24,275
Net Investment Income		43,522
Realized Loss:
Investments Sold		(12,496	)
Foreign Currency Transactions		(1,144	)
Net Realized Loss		(13,640	)
Change in Unrealized Appreciation (Depreciation):
Investments		267,165
Foreign Currency Translations		(77	)
Net Change in Unrealized Appreciation (Depreciation)		267,088
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		253,448
Net Increase in Net Assets Resulting from Operations	$	296,970

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Real Estate Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	43,522		$	37,744
Net Realized Gain (Loss)		(13,640	)		96,010
Net Change in Unrealized Appreciation (Depreciation)		267,088			(66,256	)
Net Increase in Net Assets Resulting from Operations		296,970			67,498
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(32,422	)		(37,150	)
*Class A:**
Net Investment Income		(1,673	)		(1,584	)
Class L:
Net Investment Income		(51	)		(69	)
Class IS:
Net Investment Income		(10,854	)		(3,196	)***
Total Distributions		(45,000	)		(41,999	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		400,262			498,648
Distributions Reinvested		30,916			34,732
Redeemed		(594,468	)		(648,305	)
*Class A:**
Subscribed		25,611			27,827
Distributions Reinvested		1,655			1,506
Conversion from Class H		—			12,381
Redeemed		(28,866	)		(121,287	)
*Class H:**
Subscribed		—			1,889	**
Conversion to Class A		—			(12,381	)**
Redeemed		—			(761	)**
Class L:
Subscribed		308			759
Distributions Reinvested		51			69
Redeemed		(1,972	)		(2,174	)
Class IS:
Subscribed		439,963			210,927	***
Distributions Reinvested		9,217			2,371	***
Redeemed		(111,220	)		(331	)***
Net Increase in Net Assets Resulting from Capital Share Transactions		171,457			5,870
Total Increase in Net Assets		423,427			31,369
Net Assets:
Beginning of Period		2,102,261			2,070,892
End of Period (Including Distributions in Excess of Net Investment Income of $(18,176) and $(20,043))	$	2,525,688		$	2,102,261

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		37,469			48,739
Shares Issued on Distributions Reinvested		2,857			3,592
Shares Redeemed		(56,654	)		(63,843	)
Net Decrease in Class I Shares Outstanding		(16,328	)		(11,512	)
*Class A:**
Shares Subscribed		2,432			2,787
Shares Issued on Distributions Reinvested		154			156
Conversion from Class H		—			1,279
Shares Redeemed		(2,750	)		(12,120	)
Net Decrease in Class A Shares Outstanding		(164	)		(7,898	)
*Class H:**
Shares Subscribed		—			180	**
Conversion to Class A		—			(1,281	)**
Shares Redeemed		—			(77	)**
Net Decrease in Class H Shares Outstanding		—			(1,178	)
Class L:
Shares Subscribed		29			74
Shares Issued on Distributions Reinvested		5			7
Shares Redeemed		(198	)		(216	)
Net Decrease in Class L Shares Outstanding		(164	)		(135	)
Class IS:
Shares Subscribed		41,496			20,644	***
Shares Issued on Distributions Reinvested		852			245	***
Shares Redeemed		(10,405	)		(33	)***
Net Increase in Class IS Shares Outstanding		31,943			20,856

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Real Estate Portfolio

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	9.91		$	9.77		$	7.77		$	8.78		$	7.47
Income (Loss) from Investment Operations:
Net Investment Income†		0.20			0.18			0.17			0.14			0.19
Net Realized and Unrealized Gain (Loss)		1.19			0.16			2.17			(0.99	)		1.31
Total from Investment Operations		1.39			0.34			2.34			(0.85	)		1.50
Distributions from and/or in Excess of:
Net Investment Income		(0.20	)		(0.20	)		(0.34	)		(0.16	)		(0.19	)
Net Asset Value, End of Period	$	11.10		$	9.91		$	9.77		$	7.77		$	8.78
Total Return++		14.08	%		3.55	%		30.19	%		(9.67	)%		20.22	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands) ⁽¹⁾	$	1,828,656		$	1,793,614		$	1,880,999		$	1,337,853		$	1,215,881
Ratio of Expenses to Average Net Assets		1.05	%+		1.02	%+		1.02	%+		1.04	%+		1.01	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.02	%+		N/A			N/A			1.01	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.85	%+		1.77	%+		2.42	%+		2.12	%+		2.43	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		32	%		33	%		29	%		28	%		18	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.05	%		N/A			N/A			N/A			N/A
Net Investment Income to Average Net Assets		1.85	%		N/A			N/A			N/A			N/A

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Real Estate Portfolio

	Class A@
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	9.86		$	9.72		$	7.73		$	8.74		$	7.44
Income (Loss) from Investment Operations:
Net Investment Income†		0.17			0.15			0.15			0.12			0.17
Net Realized and Unrealized Gain (Loss)		1.19			0.15			2.16			(0.98	)		1.30
Total from Investment Operations		1.36			0.30			2.31			(0.86	)		1.47
Distributions from and/or in Excess of:
Net Investment Income		(0.17	)		(0.16	)		(0.32	)		(0.15	)		(0.17	)
Net Asset Value, End of Period	$	11.05		$	9.86		$	9.72		$	7.73		$	8.74
Total Return++		13.88	%		3.18	%		29.93	%		(9.91	)%		19.90	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	105,766		$	96,046		$	171,413		$	130,244		$	67,812
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.31	%+		1.30	%+^		1.27	%+		1.29	%+		1.26	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.30	%+^		N/A			N/A			1.26	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.60	%+		1.43	%+		2.17	%+		1.87	%+		2.18	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		32	%		33	%		29	%		28	%		18	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.32	%		N/A			1.29	%		N/A
Net Investment Income to Average Net Assets		N/A			1.41	%		N/A			1.87	%		N/A

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Real Estate Portfolio

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	9.74		$	9.59		$	7.63		$	8.62		$	7.35
Income (Loss) from Investment Operations:
Net Investment Income†		0.12			0.10			0.10			0.07			0.13
Net Realized and Unrealized Gain (Loss)		1.17			0.16			2.13			(0.96	)		1.28
Total from Investment Operations		1.29			0.26			2.23			(0.89	)		1.41
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.11	)		(0.27	)		(0.10	)		(0.14	)
Net Asset Value, End of Period	$	10.91		$	9.74		$	9.59		$	7.63		$	8.62
Total Return++		13.27	%		2.77	%		29.26	%		(10.33	)%		19.26	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,755		$	5,844		$	7,050		$	6,418		$	5,043
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.79	%+		1.77	%+^		1.77	%+		1.79	%+		1.76	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			1.77	%+^		N/A			N/A			1.76	%+
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.08	%+		0.98	%+		1.67	%+		1.37	%+		1.68	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		32	%		33	%		29	%		28	%		18	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			N/A			N/A			1.79	%		N/A
Net Investment Income to Average Net Assets		N/A			N/A			N/A			1.37	%		N/A

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.80% for Class L shares.

§ Amount is less than 0.005%.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Real Estate Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	9.91		$	10.01
Income from Investment Operations:
Net Investment Income†		0.22			0.08
Net Realized and Unrealized Gain		1.19			0.02
Total from Investment Operations		1.41			0.10
Distributions from and/or in Excess of:
Net Investment Income		(0.21	)		(0.20	)
Net Asset Value, End of Period	$	11.11		$	9.91
Total Return++		14.27	%		1.08	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	586,511		$	206,757
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.96	%+		0.96	%+^^*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		2.01	%+		2.88	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§*
Portfolio Turnover Rate		32	%		33	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.96	%		0.97	%*
Net Investment Income to Average Net Assets		2.01	%		2.87	%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.99% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Real Estate Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek to provide current income and capital appreciation by investing primarily in equity securities of companies in the real estate industry located throughout the world, including real estate operating companies ("REOCs"), real estate investment trusts ("REITs") and similar entities established outside of the U.S. (foreign real estate companies). The Portfolio has capital subscription commitments to certain investee companies for this same purpose, the details of which are disclosed in the Unfunded Commitments note. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Diversified	$	105,650	$	649,205	$	—	†	$	754,855	†
Health Care		93,022		—		—			93,022
Industrial		34,087		57,678		6,673			98,438
Lodging/Resorts		169,156		—		—			169,156
Mixed Industrial/Office		26,675		8,620		—			35,295
Office		131,155		135,799		—			266,954
Residential		266,850		50,464		—			317,314
Retail		404,415		269,300		—			673,715
Self Storage		66,383		3,729		—			70,112
Total Common Stocks		1,297,393		1,174,795		6,673	†		2,478,861	†
Short-Term Investment
Investment Company		51,296		—		—			51,296
Total Assets	$	1,348,689	$	1,174,795	$	6,673	†	$	2,530,157	†

† Includes one security which is valued at zero.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $1,047,042,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stocks (000)
Beginning Balance	$	6,476	†
Purchases		22
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		(1,072	)
Change in unrealized appreciation (depreciation)		1,247
Realized gains (losses)		—
Ending Balance	$	6,673	†
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	1,247

† Includes one security which is valued at zero.

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of December 31, 2014.

Fair Value at
December 31,
2014
(000)

Valuation
Technique

Unobservable
Input

Industrial

Common
Stocks

6,673

Reported Capital Balance,
Adjusted for Subsequent
Capital Calls, Return
of Capital and significant
market changes between
last capital statement and
valuation date, as applicable

Adjusted Capital
Balance

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

4. Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Portfolio and Exeter Industrial Value Fund LP, the Portfolio has made a subscription commitment of $2,000,000 for which it will receive 2,000,000 shares of common stock. As of December 31, 2014, Exeter Industrial Value Fund LP has drawn down approximately $1,860,000 which represents 93.0% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and KTR Industrial Fund II LP, the Portfolio has made a subscription commitment of $5,000,000 for which it will receive 5,000,000 shares of common stock. As of December 31, 2014, KTR Industrial Fund II LP has drawn down approximately $4,598,000 which represents 92.0% of the commitment.

disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

7. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

allocated to each class of shares based upon their relative net assets.

First $2.5 billion				Over $2.5 billion
	0.85	%			0.80	%

For the year ended December 31, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.85% of the Portfolio's average daily net assets.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the

Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $28,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	24,177			$	451,245			$	424,126			$	11			$	51,296

During the year ended December 31, 2014, the Portfolio incurred approximately $11,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator, Sub-Advisers and Distributor, for portfolio transactions executed on behalf of the Portfolio.

The Portfolio may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income

and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	45,000	$	—	$	41,276	$	—

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

resulted in the following reclassifications among the components of net assets at December 31, 2014:

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	3,345			$	(2,503	)		$	(842	)

At December 31, 2014, the Portfolio had no distributable earnings on a tax basis.

At December 31, 2014, the aggregate cost for federal income tax purposes is approximately $2,202,155,000. The aggregate gross unrealized appreciation is approximately $367,155,000 and the aggregate gross unrealized depreciation is approximately $39,153,000 resulting in net unrealized depreciation of approximately $328,002,000.

At December 31, 2014, the Portfolio had available unused short-term capital losses of approximately $262,000 and long-term capital losses of approximately $5,470,000 that do not have an expiration date.

Amount (000)		Expiration
$	4,679	December 31, 2017
	41,571	December 31, 2018

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	1,432			$	—

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 25%, 70% and 30%, for Class I, Class A and Class IS shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Real Estate Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Real Estate Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Real Estate Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during the taxable year ended December 31, 2014. For corporate shareholders, 4.4% of the dividends qualified for the dividends received deduction.

For Federal income tax purposes the following information is furnished with respect to the Portfolio's earnings for its taxable year ended December 31, 2014. When distributed, certain earnings may be subject to a maximum tax rate of 15% as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Portfolio designated up to a maximum of approximately $5,460,000 as taxable at this lower rate.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGREANN
1112680 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Opportunity Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					28
Federal Tax Notice					29
U.S. Privacy Policy					30
Director and Officer Information					33

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in International Opportunity Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

International Opportunity Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Opportunity Portfolio Class I	$	1,000.00	$	965.50	$	1,019.66	$	5.45	$	5.60		1.10	%
International Opportunity Portfolio Class A		1,000.00		964.10		1,017.69		7.38		7.58		1.49
International Opportunity Portfolio Class L		1,000.00		961.30		1,015.17		9.84		10.11		1.99
International Opportunity Portfolio Class IS		1,000.00		966.20		1,019.76		5.35		5.50		1.08

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

International Opportunity Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 3.14%, net of fees, for Class I shares. The Portfolio's Class I shares outperformed against the Portfolio's benchmark, the MSCI All Country World ex USA Index (the "Index"), which returned -3.87%.

Factors Affecting Performance

• International stocks, as measured by the Index, declined 3.87% for the period, as global equity market performance during the period was essentially divided between the U.S., which performed well, and non-U.S., which struggled. Strong economic growth in the U.S., further reduction in the unemployment rate, the gradual winding down of the U.S. Federal Reserve's (Fed) stimulus program as expected, generally healthy corporate earnings and low inflation bolstered investor optimism for U.S. stocks.

companies are likely to suffer, while consumers in importing countries may see their disposable incomes boosted.

• The Portfolio's relative outperformance versus the Index was driven primarily by stock selection and to a lesser extent by sector allocation, although sector allocations are a result of where we're finding the most attractive individual stock opportunities.

• Stock selection in the consumer discretionary sector was the leading contributor to relative performance. The top three largest contributors to performance in the overall Portfolio were from this sector, including an Indian e-commerce web site (which is not represented in the Index), an after-school tutoring provider serving kindergarten through 12th grade throughout China (also not represented in the Index), and a South Korean duty free shops and luxury hotels operator.

• Stock selection in the consumer staples sector was additive to performance, driven by strong performance from a holding in a liquor producer in China (which is not represented in the Index).⁽ⁱ⁾

• The Portfolio benefited from stock selection in financials. A holding in a Canada-based global alternative asset manager specializing in real estate and infrastructure assets was a main contributor to returns in the sector.

• The health care sector was the chief relative detractor during the period. The Portfolio's underweight position was disadvantageous because the sector was the best performer in the Index during the period. Stock selection in the sector also dampened relative results, due to weak performance from a position in a South Korea-based biopharmaceutical developer of botulinum toxin products.

• Stock selection in the industrials sector was unfavorable to performance as well. The Portfolio's third-largest detractor was a position in a Hong Kong hospitality, entertainment and construction business operating in Hong Kong, Macau and Mainland China.

⁽ⁱ⁾ To gain exposure to the stock, the Portfolio utilized a P-note (participation note), which is intended to mirror the performance of the underlying stock. There is no leverage associated with P-notes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Opportunity Portfolio

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to look for established and emerging franchise companies located outside the U.S. We typically favor companies with the potential for strong free cash flow generation as well as have consistent or rising earnings growth records and compelling business strategies, and that we believe are undervalued at the time of purchase. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

* Minimum Investment for Class I shares

** Commenced Operations on March 31, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the MSCI All Country World ex USA Index.⁽¹⁾ and the Lipper International Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		3.14	%		—		—		9.70	%
MSCI All Country World ex USA Index		–3.87			—		—		4.32
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		5.60
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		2.71			—		—		9.38
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–2.66			—		—		8.15
MSCI All Country World ex USA Index		–3.87			—		—		4.32
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		5.60
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		2.24			—		—		8.84
MSCI All Country World ex USA Index		–3.87			—		—		4.32
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		5.60
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		3.22			—		—		11.02
MSCI All Country World ex USA Index		–3.87			—		—		1.72
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		1.60

⁽¹⁾ The MSCI All Country World ex USA Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets, excluding the United States. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper International Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio was in the Lipper International Multi-Cap Growth Funds classification.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Opportunity Portfolio

⁽⁴⁾ Commenced operations on March 31, 2010.

⁽⁵⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

International Opportunity Portfolio

	Shares		Value (000)
Common Stocks (90.1%)
Australia (0.0%)
AET&D Holdings No. 1 Ltd. (a)(b)(c)		16,699	$	—
Belgium (2.6%)
Anheuser-Busch InBev N.V.		2,792		314
Brazil (1.0%)
CETIP SA — Mercados Organizados		10,237		124
Canada (5.1%)
Brookfield Asset Management, Inc., Class A		4,587		230
Brookfield Infrastructure Partners LP		9,408		394
				624
China (15.8%)
Autohome, Inc. ADR (a)		8,885		323
Baidu, Inc. ADR (a)		1,599		364
JD.com, Inc. ADR (a)		6,070		140
Qihoo 360 Technology Co., Ltd. ADR (a)		4,970		285
TAL Education Group ADR (a)		21,855		614
Wynn Macau Ltd. (d)		68,400		191
				1,917
Denmark (6.7%)
DSV A/S		26,733		812
France (7.2%)
Christian Dior SA		1,548		265
Danone SA		2,437		160
Hermes International (e)		602		215
Pernod Ricard SA		2,149		238
				878
Germany (1.4%)
Adidas AG		2,515		175
Hong Kong (0.6%)
Louis XIII Holdings Ltd. (a)		174,500		75
India (2.2%)
MakeMyTrip Ltd. (a)		10,119		263
Japan (3.8%)
Calbee, Inc.		13,200		456
Korea, Republic of (5.5%)
Hotel Shilla Co., Ltd. (a)		2,498		206
NAVER Corp. (a)		718		464
				670
Norway (1.4%)
TGS Nopec Geophysical Co., ASA		8,017		174
South Africa (3.6%)
Naspers Ltd., Class N		3,352		432
Switzerland (5.3%)
Kuehne & Nagel International AG (Registered)		2,253		306
Nestle SA (Registered)		4,507		331
				637

	Shares		Value (000)
United Kingdom (11.9%)
Burberry Group PLC		24,346	$	617
Diageo PLC ADR		2,122		242
Intertek Group PLC		6,409		232
Just Eat PLC (a)		31,793		152
Reckitt Benckiser Group PLC		2,543		205
				1,448
United States (16.0%)
Cognizant Technology Solutions Corp., Class A (a)		6,825		359
EPAM Systems, Inc. (a)		9,990		477
Greenlight Capital Re Ltd., Class A (a)		10,963		358
Luxoft Holding, Inc. (a)		9,555		368
Priceline Group, Inc. (a)		335		382
				1,944
Total Common Stocks (Cost $9,544)				10,943
Preferred Stock (1.6%)
India (1.6%)
Flipkart Online Services Pvt Ltd. Series D (a)(b)(c)(f) (acquisition cost — $36; acquired 10/4/13) (Cost $36)		1,590		190
Convertible Preferred Stock (0.0%)
China (0.0%)
Youku Tudou, Inc., Class A (a)(b)(c)(f) (acquisition cost — $—@; acquired 9/16/10) (Cost $—@)		6		—	@
Participation Notes (4.2%)
China (4.2%)
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 2/13/15 (a)		8,591		263
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 3/4/21		7,936		243
Total Participation Notes (Cost $392)				506
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		1,652,077		3
USD/CNY November 2015 @ CNY 6.65		1,490,682		7
Total Call Options Purchased (Cost $10)				10
	Shares
Short-Term Investments (2.2%)
Securities held as Collateral on Loaned Securities (1.3%)
Investment Company (1.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		144,269		144

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

International Opportunity Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreement (0.1%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $14; fully collateralized by various U.S. Government obligations; 2.13% - 4.25% due 1/31/21 - 11/15/40; valued at $14)	$	14	$	14
Total Securities held as Collateral on Loaned Securities (Cost $158)				158
	Shares
Investment Company (0.9%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $109)		108,687		109
Total Short-Term Investments (Cost $267)				267
Total Investments (98.2%) (Cost $10,249) Including $164 of Securities Loaned (g)				11,916
Other Assets in Excess of Liabilities (1.8%)				223
Net Assets (100.0%)			$	12,139

(a) Non-income producing security.

(b) Security has been deemed illiquid at December 31, 2014.

(c) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $190,000, representing 1.6% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(d) Security trades on the Hong Kong exchange.

(e) All or a portion of this security was on loan at December 31, 2014.

(g) The approximate fair value and percentage of net assets, $6,144,000 and 50.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

@ Value is less than $500.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		25.9	%
Internet Software & Services		13.5
Beverages		11.1
Textiles, Apparel & Luxury Goods		10.8
Information Technology Services		10.2
Internet & Catalog Retail		8.3
Food Products		8.1
Road & Rail		6.9
Diversified Consumer Services		5.2
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Opportunity Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $9,996)	$	11,663
Investment in Security of Affiliated Issuer, at Value (Cost $253)		253
Total Investments in Securities, at Value (Cost $10,249)		11,916
Foreign Currency, at Value (Cost $2)		2
Cash		18
Receivable for Investments Sold		939
Due from Adviser		29
Dividends Receivable		7
Tax Reclaim Receivable		7
Receivable for Portfolio Shares Sold		2
Receivable from Affiliate		—	@
Other Assets		15
Total Assets		12,935
Liabilities:
Payable for Investments Purchased		560
Collateral on Securities Loaned, at Value		173
Payable for Professional Fees		42
Payable for Portfolio Shares Redeemed		8
Payable for Custodian Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		6
Total Liabilities		796
Net Assets	$	12,139
Net Assets Consist of:
Paid-in-Capital	$	10,054
Accumulated Undistributed Net Investment Income		41
Accumulated Net Realized Gain		378
Unrealized Appreciation (Depreciation) on:
Investments		1,667
Foreign Currency Translations		(1	)
Net Assets	$	12,139

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	10,943
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		786,161
Net Asset Value, Offering and Redemption Price Per Share	$	13.92
CLASS A:
Net Assets	$	992
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		71,559
Net Asset Value, Redemption Price Per Share	$	13.87
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.77
Maximum Offering Price Per Share	$	14.64
CLASS L:
Net Assets	$	193
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		14,091
Net Asset Value, Offering and Redemption Price Per Share	$	13.71
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		784
Net Asset Value, Offering and Redemption Price Per Share	$	13.92
⁽¹⁾ Including: Securities on Loan, at Value:	$	164

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Opportunity Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $11 of Foreign Taxes Withheld)	$	148
Income from Securities Loaned — Net		2
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		150
Expenses:
Professional Fees		98
Advisory Fees (Note B)		82
Registration Fees		52
Custodian Fees (Note F)		18
Shareholder Reporting Fees		16
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Administration Fees (Note C)		7
Pricing Fees		6
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class L (Note D)		1
Directors' Fees and Expenses		2
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class L		—	@
Other Expenses		12
Total Expenses		305
Expenses Reimbursed by Adviser (Note B)		(114	)
Waiver of Advisory Fees (Note B)		(82	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		104
Net Investment Income		46
Realized Gain:
Investments Sold		583
Foreign Currency Transactions		1
Net Realized Gain		584
Change in Unrealized Appreciation (Depreciation):
Investments		(474	)
Foreign Currency Translations		(1	)
Net Change in Unrealized Appreciation (Depreciation)		(475	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		109
Net Increase in Net Assets Resulting from Operations	$	155

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Opportunity Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	46		$	54
Net Realized Gain		584			385
Net Change in Unrealized Appreciation (Depreciation)		(475	)		1,258
Net Increase in Net Assets Resulting from Operations		155			1,697
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(4	)		(50	)
Net Realized Gain		(210	)		(153	)
*Class A:**
Net Investment Income		(—	@)		(1	)
Net Realized Gain		(23	)		(6	)
*Class H:**
Net Investment Income		—			(—	@)**
Class L:
Net Realized Gain		(4	)		(3	)
Class IS:
Net Investment Income		(—	@)		(—	@)***
Net Realized Gain		(—	@)		(—	@)***
Total Distributions		(241	)		(213	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		3,295			951
Distributions Reinvested		78			30
Redeemed		(26	)		—
*Class A:**
Subscribed		1,260			35
Distributions Reinvested		18			1
Conversion from Class H		—			124
Redeemed		(529	)		(35	)
*Class H:**
Conversion to Class A		—			(124	)**
Redeemed		—			(826	)**
Class L:
Subscribed		59			—
Distributions Reinvested		1			—
Redeemed		(1	)		(—	@)
Class IS:
Subscribed		—			10	***
Net Increase in Net Assets Resulting from Capital Share Transactions		4,155			166
Redemption Fees		—	@		—
Total Increase in Net Assets		4,069			1,650
Net Assets:
Beginning of Period		8,070			6,420
End of Period (Including Accumulated Undistributed Net Investment Income of $41 and $3)	$	12,139		$	8,070

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Opportunity Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		227			83
Shares Issued on Distributions Reinvested		6			2
Shares Redeemed		(2	)		—
Net Increase in Class I Shares Outstanding		231			85
*Class A:**
Shares Subscribed		88			3
Shares Issued on Distributions Reinvested		1			—	@@**
Conversion from Class H		—			10
Shares Redeemed		(37	)		(3	)
Net Increase in Class A Shares Outstanding		52			10
*Class H:**
Conversion to Class A		—			(10	)**
Shares Redeemed		—			(74	)**
Net Decrease in Class H Shares Outstanding		—			(84	)
Class L:
Shares Subscribed		4			—
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(—	@@)		(—	@@)
Net Increase in Class L Shares Outstanding		4			(—	@@)
Class IS:
Shares Subscribed		—			1	***

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Opportunity Portfolio

	Class I
	Year Ended December 31,												Period from March 31, 2010^ to
Selected Per Share Data and Ratios	2014			2013			2012			2011			December 31, 2010
Net Asset Value, Beginning of Period	$	13.77		$	11.19		$	10.26		$	12.07		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income†		0.08			0.10			0.08			0.08			0.03
Net Realized and Unrealized Gain (Loss)		0.36			2.85			0.92			(1.31	)		2.04
Total from Investment Operations		0.44			2.95			1.00			(1.23	)		2.07
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.09	)		(0.07	)		(0.10	)		—
Net Realized Gain		(0.28	)		(0.28	)		—			(0.48	)		—
Total Distributions		(0.29	)		(0.37	)		(0.07	)		(0.58	)		—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	13.92		$	13.77		$	11.19		$	10.26		$	12.07
Total Return++		3.14	%		26.47	%		9.76	%		(10.16	)%		20.70	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10,943		$	7,647		$	5,259		$	4,822		$	5,672
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.09	%+		1.13	%+		1.14	%+		1.15	%+		1.15	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.57	%+		0.82	%+		0.70	%+		0.67	%+		0.33	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.01	%		0.00	%§		0.00	%§*
Portfolio Turnover Rate		33	%		40	%		33	%		37	%		18	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.25	%		3.84	%		3.87	%		3.82	%		4.79	%+*
Net Investment Loss to Average Net Assets		(1.59	)%		(1.89	)%		(2.03	)%		(2.00	)%		(3.31	)%+*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Opportunity Portfolio

	Class A@
	Year Ended December 31,												Period from March 31, 2010^ to
Selected Per Share Data and Ratios	2014			2013			2012			2011			December 31, 2010
Net Asset Value, Beginning of Period	$	13.78		$	11.19		$	10.26		$	12.04		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income†		0.01			0.02			0.05			0.05			0.01
Net Realized and Unrealized Gain (Loss)		0.37			2.89			0.92			(1.30	)		2.03
Total from Investment Operations		0.38			2.91			0.97			(1.25	)		2.04
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.04	)		(0.04	)		(0.05	)		—
Net Realized Gain		(0.28	)		(0.28	)		—			(0.48	)		—
Total Distributions		(0.29	)		(0.32	)		(0.04	)		(0.53	)		—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	13.87		$	13.78		$	11.19		$	10.26		$	12.04
Total Return++		2.71	%		26.12	%		9.49	%		(10.33	)%		20.40	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	992		$	275		$	112		$	103		$	120
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.49	%+		1.44	%+^^		1.39	%+		1.40	%+		1.40	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.04	%+		0.13	%+		0.45	%+		0.42	%+		0.08	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.01	%		0.00	%§		0.00	%§*
Portfolio Turnover Rate		33	%		40	%		33	%		37	%		18	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.81	%		4.49	%		4.12	%		4.07	%		5.04	%+*
Net Investment Loss to Average Net Assets		(2.28	)%		(2.92	)%		(2.28	)%		(2.25	)%		(3.56	)%+*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Opportunity Portfolio

	Class L
	Year Ended December 31,												Period from March 31, 2010^ to
Selected Per Share Data and Ratios	2014			2013			2012			2011			December 31, 2010
Net Asset Value, Beginning of Period	$	13.68		$	11.13		$	10.22		$	12.00		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.05	)		(0.00	)‡		(0.01	)		(0.01	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		0.36			2.83			0.92			(1.29	)		2.03
Total from Investment Operations		0.31			2.83			0.91			(1.30	)		2.00
Distributions from and/or in Excess of:
Net Realized Gain		(0.28	)		(0.28	)		—			(0.48	)		—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	13.71		$	13.68		$	11.13		$	10.22		$	12.00
Total Return++		2.24	%		25.49	%		8.90	%		(10.81	)%		20.00	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	193		$	137		$	112		$	102		$	120
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.99	%+		1.92	%+^^		1.89	%+		1.90	%+		1.90	%+*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.38	)%+		(0.00	)%+§		(0.05	)%+		(0.08	)%+		(0.42	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.01	%		0.00	%§		0.00	%§*
Portfolio Turnover Rate		33	%		40	%		33	%		37	%		18	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		5.06	%		4.91	%		4.62	%		4.57	%		5.54	%+*
Net Investment Loss to Average Net Assets		(3.45	)%		(2.99	)%		(2.78	)%		(2.75	)%		(4.06	)%+*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Opportunity Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	13.77		$	12.75
Income (Loss) from Investment Operations:
Net Investment Income Gain (Loss)†		0.07			(0.02	)
Net Realized and Unrealized Gain		0.37			1.41
Total from Investment Operations		0.44			1.39
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.09	)
Net Realized Gain		(0.28	)		(0.28	)
Total Distributions		(0.29	)		(0.37	)
Redemption Fees		0.00	‡		—
Net Asset Value, End of Period	$	13.92		$	13.77
Total Return++		3.22	%		10.96	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	11		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.08	%+		1.08	%+^^*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.51	%+		(0.47	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%*
Portfolio Turnover Rate		33	%		40	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		20.64	%		9.61	%*
Net Investment Loss to Average Net Assets		(19.05	)%		(9.00	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.09% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the International Opportunity Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established and emerging franchise companies on an international basis, with capitalizations within the range of companies included in the MSCI All Country World Ex-United States Index. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors

(the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Beverages	$	242	$	552	$	—		$	794
Capital Markets		—		124		—			124
Construction & Engineering		—		75		—			75
Diversified Consumer Services		614		—		—			614
Electric Utilities		394		—		—	†		394	†
Energy Equipment & Services		—		174		—			174
Food Products		—		947		—			947
Hotels, Restaurants & Leisure		—		397		—			397
Household Products		—		205		—			205
Information Technology Services		1,204		—		—			1,204
Insurance		358		—		—			358

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Common Stocks (cont'd)
Internet & Catalog Retail	$	785	$	—	$	—		$	785
Internet Software & Services		972		616		—			1,588
Marine		—		306		—			306
Media		—		432		—			432
Professional Services		—		232		—			232
Real Estate Management & Development		230		—		—			230
Road & Rail		—		812		—			812
Textiles, Apparel & Luxury Goods		—		1,272		—			1,272
Total Common Stocks		4,799		6,144		—	†		10,943	†
Preferred Stock		—		—		190			190
Convertible Preferred Stock		—		—		—	@		—	@
Participation Notes		—		506		—			506
Call Options Purchased		—		10		—			10
Short-Term Investments
Investment Company		253		—		—			253
Repurchase Agreement		—		14		—			14
Total Short-Term Investments		253		14		—			267
Total Assets	$	5,052	$	6,674	$	190	†	$	11,916	†

@ Value is less than $500

† Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes

transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $5,818,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)			Convertible Preferred Stock (000)			Preferred Stock (000)
Beginning Balance	$	—	†	$	—	@	$	38
Purchases		—			—			—
Sales		—			—			—
Beginning Balance		—			—			—
Transfers in		—			—			—
Transfers out		—			—			—
Corporate actions		—			—			—
Change in unrealized appreciation (depreciation)		—			(—	@)		152
Realized gains (losses)		—			—			—
Ending Balance	$	—	†	$	—	@	$	190
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	—		$	(—	@)	$	152

@ Value is less than $500.

† Includes one security which is valued at zero.

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of December 31, 2014.

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range				Selected Value		Impact to Valuation from an Increase in Input
Internet & Catalog Retail
Preferred Stock	$	190	Market Transaction Method	Precedent Transaction of Preferred Stock	$	119.76	$	119.76	$	119.76	Increase

the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

for the year ended December 31, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(8	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments
	(Call Options Purchased)	$	4	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	10	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	10	$	—	$	—	$	10

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					3,431,000

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	164	(e)	$	—	$	(164	)(f)(g)	$	0

(e) Represents market value of loaned securities at period end.

(f) The Portfolio received cash collateral of approximately $173,000, of which approximately $158,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $15,000, which is not reflected in the Portfolio of Investments.

(g) The actual collateral received is greater than the amount shown here due to overcollateralization.

7. Structured Investments: The Portfolio invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Portfolio will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect

to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

8. Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

9. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares and Class IS shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

10. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

11. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

12. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses -distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.90	%			0.85	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

fees were waived and approximately $118,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $6,396,000 and $2,859,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	—			$	6,034			$	5,781			$	—	@		$	253

@ Amount is less than $500.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	102	$	139	$	51	$	162

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, a dividend redesignation, basis adjustments on partnerships and equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in-Capital (000)
$	(4	)		$	4			$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	41			$	384

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $10,256,000. The aggregate gross unrealized appreciation is approximately $1,839,000 and the aggregate gross unrealized depreciation is approximately $179,000 resulting in net unrealized appreciation of approximately $1,660,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 28% and 33%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Opportunity Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of International Opportunity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Opportunity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014.

The Portfolio designated and paid approximately $139,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIIIOANN
1110926 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Advantage Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					10
Statements of Changes in Net Assets					11
Financial Highlights					13
Notes to Financial Statements					17
Report of Independent Registered Public Accounting Firm					25
Federal Tax Notice					26
U.S. Privacy Policy					27
Director and Officer Information					30

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Advantage Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Advantage Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Advantage Portfolio Class I	$	1,000.00	$	1,062.60	$	1,019.96	$	5.41	$	5.30		1.04	%
Advantage Portfolio Class A		1,000.00		1,060.10		1,018.10		7.32		7.17		1.41
Advantage Portfolio Class L		1,000.00		1,061.10		1,019.00		6.39		6.26		1.23
Advantage Portfolio Class IS		1,000.00		1,062.70		1,020.16		5.20		5.09		1.00

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Advantage Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 7.43%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the Russell 1000® Growth Index (the "Index"), which returned 13.05%.

Factors Affecting Performance

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• Both an underweight position and stock selection in the health care sector hurt relative results. Although all of the Portfolio's health care holdings contributed positively to overall performance, its lack of exposure to stronger-performing areas such as biotechnology was disadvantageous to relative results.

• Stock selection in the consumer staples sector added to relative performance. Among the top six contributing stocks, two were beverages companies, one was a food products company, and one a food and staples retailer.

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to look for franchises with strong name recognition and sustainable competitive advantages. We typically favor companies with rising returns on invested capital, above average business visibility, strong free cash flow generation and an attractive risk/reward. Our emphasis is on secular growth, and

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Advantage Portfolio

as a result short-term market events are not as meaningful in the stock selection process.

* Minimum Investment for Class I shares

** Commenced Operations on June 30, 2008.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the Russell 1000^® Growth Index⁽¹⁾ and the Lipper Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		7.43	%		16.77	%		—		11.38	%
Russell 1000^® Growth Index		13.05			15.81			—		10.68
Lipper Multi-Cap Growth Funds Index		11.08			15.22			—		9.50
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		7.05			—			—		18.16
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		1.40			—			—		16.79
Russell 1000^® Growth Index		13.05			—			—		17.91
Lipper Multi-Cap Growth Funds Index		11.08			—			—		17.01
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		7.28			16.72			—		11.23
Russell 1000^® Growth Index		13.05			15.81			—		10.68
Lipper Multi-Cap Growth Funds Index		11.08			15.22			—		9.50
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		7.50			—			—		17.85
Russell 1000^® Growth Index		13.05			—			—		19.13
Lipper Multi-Cap Growth Funds Index		11.08			—			—		17.33

⁽²⁾ The Lipper Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio was in the Lipper Multi-Cap Growth Funds classification.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Advantage Portfolio

Portfolio to the extent it exceeds 0.04% of the average daily net assets of such shares on an annualized basis.

⁽⁴⁾ On May 21, 2010 Class C and Class I shares of Van Kampen Core Growth Fund ("the Predecessor Fund") were reorganized into Class L and Class I shares of Morgan Stanley Advantage Portfolio ("the Portfolio"), respectively. Class L and Class I shares' returns of the Portfolio will differ from the Predecessor Fund as they have different expenses. Performance shown for the Portfolio's Class I and Class L shares reflects the performance of the shares of the Predecessor Fund for periods prior to May 21, 2010. The Class C and I shares of the Predecessor Fund commenced operations on June 30, 2008. Class P shares, which were renamed Class A shares effective September 9, 2013, commenced operations on May 21, 2010.

⁽⁵⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Advantage Portfolio

	Shares		Value (000)
Common Stocks (95.1%)
Beverages (6.8%)
Dr. Pepper Snapple Group, Inc.		9,871	$	708
Monster Beverage Corp. (a)		3,807		412
PepsiCo, Inc.		8,482		802
				1,922
Diversified Financial Services (7.0%)
Berkshire Hathaway, Inc., Class B (a)		6,199		931
McGraw Hill Financial, Inc.		8,579		763
MSCI, Inc.		5,736		272
				1,966
Food & Staples Retailing (4.6%)
Costco Wholesale Corp.		5,910		837
Walgreens Boots Alliance, Inc.		6,178		471
				1,308
Food Products (9.8%)
Keurig Green Mountain, Inc.		5,660		749
McCormick & Co., Inc.		3,823		284
Mead Johnson Nutrition Co.		10,555		1,061
Nestle SA ADR (Switzerland)		9,231		674
				2,768
Hotels, Restaurants & Leisure (4.9%)
Dunkin' Brands Group, Inc.		5,718		244
Panera Bread Co., Class A (a)		1,524		266
Starbucks Corp.		10,836		889
				1,399
Information Technology Services (6.1%)
Cognizant Technology Solutions Corp., Class A (a)		6,402		337
Mastercard, Inc., Class A		7,745		667
Visa, Inc., Class A		2,750		721
				1,725
Insurance (2.9%)
Progressive Corp. (The)		30,655		827
Internet & Catalog Retail (7.0%)
Amazon.com, Inc. (a)		6,340		1,968
Internet Software & Services (23.2%)
Alibaba Group Holding Ltd. ADR (China) (a)		4,585		477
eBay, Inc. (a)		5,202		292
Facebook, Inc., Class A (a)		29,151		2,274
Google, Inc., Class A (a)		1,488		790
Google, Inc., Class C (a)		1,774		934
LinkedIn Corp., Class A (a)		3,968		911
Twitter, Inc. (a)		24,710		886
				6,564
Life Sciences Tools & Services (2.4%)
Thermo Fisher Scientific, Inc.		5,400		677
Media (4.1%)
Naspers Ltd., Class N (South Africa)		3,611		465
Walt Disney Co. (The)		7,509		707
				1,172

	Shares		Value (000)
Pharmaceuticals (3.6%)
Valeant Pharmaceuticals International, Inc. (Canada) (a)		4,888	$	700
Zoetis, Inc.		7,191		309
				1,009
Professional Services (1.0%)
Verisk Analytics, Inc., Class A (a)		4,326		277
Specialty Retail (4.2%)
L Brands, Inc.		5,243		454
TJX Cos., Inc. (The)		10,498		720
				1,174
Tech Hardware, Storage & Peripherals (3.3%)
Apple, Inc.		8,512		940
Textiles, Apparel & Luxury Goods (4.2%)
Christian Dior SA (France)		3,880		663
Hermes International (France)		218		78
Michael Kors Holdings Ltd. (a)		5,940		446
				1,187
Total Common Stocks (Cost $19,973)				26,883
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		4,473,209		8
USD/CNY November 2015 @ CNY 6.65		4,375,807		22
Total Call Options Purchased (Cost $27)				30
	Shares
Short-Term Investment (5.0%)
Investment Company (5.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $1,407)		1,406,715		1,407
Total Investments (100.2%) (Cost $21,407) (b)				28,320
Liabilities in Excess of Other Assets (-0.2%)				(50	)
Net Assets (100.0%)			$	28,270

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $1,206,000 and 4.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Advantage Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Other*		35.3	%
Internet Software & Services		23.2
Food Products		9.8
Internet & Catalog Retail		6.9
Diversified Financial Services		6.9
Beverages		6.8
Information Technology Services		6.1
Short-Term Investment		5.0
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Advantage Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $20,000)	$	26,913
Investment in Security of Affiliated Issuer, at Value (Cost $1,407)		1,407
Total Investments in Securities, at Value (Cost $21,407)		28,320
Foreign Currency, at Value (Cost $5)		5
Receivable for Portfolio Shares Sold		73
Dividends Receivable		21
Due from Adviser		8
Tax Reclaim Receivable		1
Receivable from Affiliate		—	@
Other Assets		20
Total Assets		28,448
Liabilities:
Payable for Portfolio Shares Redeemed		112
Payable for Professional Fees		47
Payable for Custodian Fees		5
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Administration Fees		2
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Other Liabilities		5
Total Liabilities		178
Net Assets	$	28,270
Net Assets Consist Of:
Paid-in-Capital	$	21,103
Accumulated Undistributed Net Investment Income		22
Accumulated Net Realized Gain		232
Unrealized Appreciation (Depreciation) on:
Investments		6,913
Foreign Currency Translations		(—	@)
Net Assets	$	28,270
CLASS I:
Net Assets	$	17,971
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,067,976
Net Asset Value, Offering and Redemption Price Per Share	$	16.83
CLASS A:
Net Assets	$	3,738
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		223,795
Net Asset Value, Redemption Price Per Share	$	16.70
Maximum Sales Load		5.25
Maximum Sales Charge	$	0.93
Maximum Offering Price Per Share	$	17.63
CLASS L:
Net Assets	$	6,549
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		389,277
Net Asset Value, Offering and Redemption Price Per Share	$	16.82
CLASS IS:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		685
Net Asset Value, Offering and Redemption Price Per Share	$	16.84

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Advantage Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $17 of Foreign Taxes Withheld)	$	318
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		319
Expenses:
Advisory Fees (Note B)		188
Professional Fees		101
Registration Fees		53
Shareholder Services Fees — Class A (Note D)		9
Distribution and Shareholder Services Fees — Class L (Note D)		38
Shareholder Reporting Fees		26
Administration Fees (Note C)		20
Custodian Fees (Note F)		19
Sub Transfer Agency Fees		1
Sub Transfer Agency Fees — Class I		5
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class L		5
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		6
Directors' Fees and Expenses		2
Other Expenses		19
Total Expenses		504
Waiver of Advisory Fees (Note B)		(180	)
Distribution Fees- Class L Shares Waived (Note D)		(36	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Net Expenses		280
Net Investment Income		39
Realized Gain (Loss):
Investments Sold		1,140
Foreign Currency Transactions		(—	@)
Net Realized Gain		1,140
Change in Unrealized Appreciation (Depreciation):
Investments		716
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		716
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,856
Net Increase in Net Assets Resulting from Operations	$	1,895

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Advantage Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	39		$	6
Net Realized Gain		1,140			782
Net Change in Unrealized Appreciation (Depreciation)		716			4,685
Net Increase in Net Assets Resulting from Operations		1,895			5,473
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(5	)		—
Net Realized Gain		(781	)		(472	)
*Class A:**
Net Investment Income		—			—
Net Realized Gain		(166	)		(73	)
*Class H:**
Net Realized Gain		—			(28	)**
Class L:
Net Investment Income		(1	)		—
Net Realized Gain		(267	)		(98	)
Class IS:
Net Investment Income		(—	@)		—
Net Realized Gain		(1	)		(—	@)***
Total Distributions		(1,221	)		(671	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		4,207			2,820
Distributions Reinvested		434			225
Redeemed		(1,822	)		(324	)
*Class A:**
Subscribed		2,507			269
Distributions Reinvested		166			73
Conversion from Class H		—			2,456
Redeemed		(2,170	)		(87	)
*Class H:**
Subscribed		—			259	**
Distributions Reinvested		—			28	**
Conversion to Class A		—			(2,456	)**
Redeemed		—			(1,896	)**
Class L:
Subscribed		3,222			3,193
Distributions Reinvested		254			88
Redeemed		(967	)		(688	)
Class IS:
Subscribed		—			10	***
Net Increase in Net Assets Resulting from Capital Share Transactions		5,831			3,970
Total Increase in Net Assets		6,505			8,772
Net Assets:
Beginning of Period		21,765			12,993
End of Period (Including Accumulated Undistributed Net Investment Income of $22 and $10)	$	28,270		$	21,765

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		255			211
Shares Issued on Distributions Reinvested		27			15
Shares Redeemed		(111	)		(22	)
Net Increase in Class I Shares Outstanding		171			204
*Class A:**
Shares Subscribed		155			20
Shares Issued on Distributions Reinvested		10			5
Conversion from Class H		—			172
Shares Redeemed		(133	)		(6	)
Net Increase in Class A Shares Outstanding		32			191
*Class H:**
Shares Subscribed		—			20	**
Shares Issued on Distributions Reinvested		—			2	**
Conversion to Class A		—			(172	)**
Shares Redeemed		—			(146	)**
Net Decrease in Class H Shares Outstanding		—			(296	)
Class L:
Shares Subscribed		194			222
Shares Issued on Distributions Reinvested		16			6
Shares Redeemed		(59	)		(48	)
Net Increase in Class L Shares Outstanding		151			180
Class IS:
Shares Subscribed		—			1	***

@ Amount is less than $500.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Advantage Portfolio

	Class I**
	Year Ended December 31,												Period from September 1, 2010 to December 31,			Year Ended August 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	16.41		$	12.40		$	11.38		$	10.87		$	9.15		$	7.97
Income from Investment Operations:
Net Investment Income†		0.04			0.01			0.14			0.04			0.01			0.04
Net Realized and Unrealized Gain		1.15			4.54			1.72			0.54			1.74			1.19
Total from Investment Operations		1.19			4.55			1.86			0.58			1.75			1.23
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		—			(0.10	)		(0.07	)		(0.03	)		(0.05	)
Net Realized Gain		(0.76	)		(0.54	)		(0.74	)		—			—			—
Total Distributions		(0.77	)		(0.54	)		(0.84	)		(0.07	)		(0.03	)		(0.05	)
Net Asset Value, End of Period	$	16.83		$	16.41		$	12.40		$	11.38		$	10.87		$	9.15
Total Return++		7.43	%		37.11	%		16.38	%		5.33	%		19.30	%#		15.34	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	17,971		$	14,712		$	8,595		$	7,239		$	5,015		$	4,223
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.04	%+		1.04	%+		1.05	%+		1.05	%+		1.02	%+*		1.05	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.25	%+*		N/A
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.23	%+		0.11	%+		1.08	%+		0.39	%+		0.42	%+*		0.49	%
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%§		0.00	%§		0.03	%*		N/A
Portfolio Turnover Rate		31	%		36	%		50	%		28	%		33	%#		32	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.78	%		2.33	%		2.34	%		3.43	%		3.49	%+*		4.49	%
Net Investment Loss to Average Net Assets		(0.51	)%		(1.18	)%		(0.21	)%		(1.99	)%		(2.05	)%+*		(2.95	)%

** On May 21, 2010, the Portfolio acquired substantially all of the assets and liabilities of the Van Kampen Core Growth Fund ("the Predecessor Fund"). Therefore, the per share data and ratios of Class I shares for the 12-month period ended August 31, 2010 reflect the historical per share data of Class I shares of the Predecessor Fund.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Advantage Portfolio

	Class A@
	Year Ended December 31,												Period from September 1, 2010 to December 31,			Period from May 21, 2010^ to August 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	16.34		$	12.39		$	11.37		$	10.86		$	9.15		$	9.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.03	)		(0.07	)		0.11			0.02			0.01			0.01
Net Realized and Unrealized Gain		1.15			4.56			1.72			0.53			1.73			0.14
Total from Investment Operations		1.12			4.49			1.83			0.55			1.74			0.15
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.07	)		(0.04	)		(0.03	)		—
Net Realized Gain		(0.76	)		(0.54	)		(0.74	)		—			—			—
Total Distributions		(0.76	)		(0.54	)		(0.81	)		(0.04	)		(0.03	)		—
Net Asset Value, End of Period	$	16.70		$	16.34		$	12.39		$	11.37		$	10.86		$	9.15
Total Return++		7.05	%		36.65	%		16.11	%		5.07	%		19.16	%#		1.56	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,738		$	3,134		$	12		$	11		$	10		$	1
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.39	%+		1.35	%+^^		1.30	%+		1.30	%+		1.29	%+*		1.30	%*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.52	%+*		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.15	)%+		(0.44	)%+		0.83	%+		0.14	%+		0.15	%+*		0.27	%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.00	%§		0.00	%§		0.03	%*		N/A
Portfolio Turnover Rate		31	%		36	%		50	%		28	%		33	%#		32	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.14	%		2.68	%		2.59	%		3.68	%		3.76	%+		2.59	%*
Net Investment Loss to Average Net Assets		(0.90	)%		(1.77	)%		(0.46	)%		(2.24	)%		(2.32	)%+		(1.02	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class A Shares. Prior to September 16, 2013, the maximum ratio was 1.30% for Class A Shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Advantage Portfolio

	Class L**
	Year Ended December 31,												Period from September 1, 2010 to December 31,			Year Ended August 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	16.42		$	12.42		$	11.39		$	10.89		$	9.16		$	7.96
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.02			(0.01	)		0.13			0.04			0.01			0.04
Net Realized and Unrealized Gain		1.14			4.55			1.74			0.52			1.75			1.19
Total from Investment Operations		1.16			4.54			1.87			0.56			1.76			1.23
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)‡		—			(0.10	)		(0.06	)		(0.03	)		(0.03	)
Net Realized Gain		(0.76	)		(0.54	)		(0.74	)		—			—			—
Total Distributions		(0.76	)		(0.54	)		(0.84	)		(0.06	)		(0.03	)		(0.03	)
Net Asset Value, End of Period	$	16.82		$	16.42		$	12.42		$	11.39		$	10.89		$	9.16
Total Return++		7.28	%		36.97	%		16.42	%		5.19	%		19.20	%#		15.43	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6,549		$	3,908		$	722		$	208		$	155		$	156
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.18	%+		1.08	%+^		1.09	%+		1.09	%+		1.06	%+*		1.08	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.29	%+*		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.12	%+		(0.06	)%+		1.04	%+		0.35	%+		0.38	%+*		0.45	%
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%§		0.00	%§		0.03	%*		N/A
Portfolio Turnover Rate		31	%		36	%		50	%		28	%		33	%#		32	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.64	%		3.10	%		3.09	%		4.18	%		3.53	%+*		4.53	%
Net Investment Loss to Average Net Assets		(1.34	)%		(2.08	)%		(0.96	)%		(2.74	)%		(2.09	)%+*		(3.00	)%

** On May 21, 2010, the Portfolio acquired substantially all of the assets and liabilities of the Van Kampen Core Growth Fund ("the Predecessor Fund"). Therefore, the per share data and ratios of Class L shares for the 12-month period ended August 31, 2010 reflect the historical per share data of Class C shares of the Predecessor Fund.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.19% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.09% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Advantage Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	16.41		$	14.59
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.04			(0.01	)
Net Realized and Unrealized Gain		1.16			2.21
Total from Investment Operations		1.20			2.20
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		—
Net Realized Gain		(0.76	)		(0.38	)
Total Distributions		(0.77	)		(0.38	)
Net Asset Value, End of Period	$	16.84		$	16.41
Total Return++		7.50	%		15.15	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	12		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.00	%+		1.01	%+^^*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.26	%+		(0.25	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§*
Portfolio Turnover Rate		31	%		36	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		18.84	%		7.31	%*
Net Investment Loss to Average Net Assets		(17.58	)%		(6.55	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.01% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Advantage Portfolio. The Portfolio seeks long-term capital appreciation. The Portfolio seeks to achieve the investment objective by investing primarily in established companies with capitalizations within the range of companies included in the Russell 1000® Growth Index. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including

circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	1,922	$	—	$	—	$	1,922
Diversified Financial Services		1,966		—		—		1,966
Food & Staples Retailing		1,308		—		—		1,308
Food Products		2,768		—		—		2,768
Hotels, Restaurants & Leisure		1,399		—		—		1,399
Information Technology Services		1,725		—		—		1,725
Insurance		827		—		—		827
Internet & Catalog Retail		1,968		—		—		1,968
Internet Software & Services		6,564		—		—		6,564
Life Sciences Tools & Services		677		—		—		677
Media		707		465		—		1,172
Pharmaceuticals		1,009		—		—		1,009
Professional Services		277		—		—		277
Specialty Retail		1,174		—		—		1,174
Tech Hardware, Storage & Peripherals		940		—		—		940
Textiles, Apparel & Luxury Goods		446		741		—		1,187
Total Common Stocks		25,677		1,206		—		26,883
Call Options Purchased		—		30		—		30
Short-Term Investment
Investment Company		1,407		—		—		1,407
Total Assets	$	27,084	$	1,236	$	—	$	28,320

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $1,128,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

investment income and foreign withholding taxes recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)		$(20)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)		$12(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	30	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	30	$	—	$	—	$	30

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					9,227,000

6. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

7. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $750 million				Next $750 million				Over $1.5 billion
	0.75	%			0.70	%			0.65	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.02% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.05% for Class I shares, 1.40% for Class A shares, 1.19% for Class L shares and 1.01% for Class IS shares. Effective January 23, 2015, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 0.99% for Class L shares and 0.81% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $180,000 of advisory fees were waived and approximately $6,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the

"Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Fund's Distributor of Portfolio shares pursuant to a Distribution Agreement. The Fund has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Portfolio pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

The Fund has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Portfolio pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year the 12b-1 fees on Class L shares of the Portfolio to the extent it exceeds 0.04% of the average daily net assets of such shares on an annualized basis. For the year ended December 31, 2014, this waiver amounted to approximately $36,000.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $11,765,000 and $7,426,000, respectively. There were no purchases and sales of

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $2,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	992			$	10,343			$	9,928			$	1			$	1,407

During the year ended December 31, 2014, the Portfolio incurred approximately $1,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	121	$	1,100	$	251	$	420

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	(21	)		$	21			$	—

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	18			$	244

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $21,415,000. The aggregate gross unrealized appreciation is approximately $6,953,000 and the aggregate gross unrealized depreciation is approximately $48,000 resulting in net unrealized appreciation of approximately $6,905,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 16%, 39% and 57%, for Class I, Class A and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Advantage Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Advantage Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Advantage Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 34.2% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid $1,100,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIADVANN
1110606 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Opportunity Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					26
Federal Tax Notice					27
U.S. Privacy Policy					28
Director and Officer Information					31

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Opportunity Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Opportunity Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Opportunity Portfolio Class I	$	1,000.00	$	1,020.60	$	1,021.17	$	4.07	$	4.08		0.80	%
Opportunity Portfolio Class A		1,000.00		1,019.00		1,019.00		6.26		6.26		1.23
Opportunity Portfolio Class L		1,000.00		1,016.40		1,016.48		8.79		8.79		1.73
Opportunity Portfolio Class IS		1,000.00		1,021.10		1,021.53		3.72		3.72		0.73

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Opportunity Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 3.01%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the Russell 1000® Growth Index (the "Index"), which returned 13.05%.

Factors Affecting Performance

• A notable event during the period was a widespread sell-off in high growth and high valuation multiple stocks that began in March and continued on through April. Generally, we believe the sell-off was not due to company-specific fundamentals but rather driven by a broad rotation out of such names. Although the share prices of several of the Portfolio's holdings (IT stocks, in particular) took a hit during this downturn, these companies' fundamentals remained largely robust. Overall, we remain optimistic about the long-term outlook for the companies owned.

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• The Portfolio's lack of exposure to the health care sector, which was the best-performing sector in the Index during the period, was unfavorable to relative results.

• Stock selection in the IT sector was disadvantageous to relative performance. The Portfolio's third-largest detractor was a position in a global microblogging platform that saw its share price tumble after disappointing analysts' very high expectations. We are monitoring the company's situation and continue to believe in its long-term prospects. Relative performance also suffered due to the Portfolio's lack of exposure to a consumer electronics, computer hardware and software firm that performed well in the Index during the period.

• The Portfolio's significant underweight position in energy, the worst-performing sector during the period, benefited relative performance. The Portfolio held only one energy stock, which was sold during the period.

• Stock selection in consumer staples boosted relative performance, as the Portfolio's holding in a liquor producer in China (which is not represented in the Index) was the second best contributor to performance in the overall Portfolio during the period.⁽ⁱ⁾

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Opportunity Portfolio

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to look for established and emerging franchise companies with capitalizations within the range of companies included in the Russell 1000® Growth Index. We typically favor companies with the potential for strong free cash flow generation as well as have consistent or rising earnings growth records and compelling business strategies, and that we believe are undervalued at the time of purchase. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

* Actual Minimum Investment for Class L shares is $1,000.

** Performance shown for the Portfolio's Class L shares reflects the performance of the Class C shares of the Predecessor Fund for periods prior to May 21, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, I and IS shares will vary from the performance of Class L shares based upon their different inception dates and will be impacted by fees assessed to those classes (if applicable).

Performance Compared to the Russell 1000^® Growth Index⁽¹⁾ and the Lipper Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		3.01	%		14.08	%		—			9.96	%
Russell 1000^® Growth Index		13.05			15.81			—			8.80
Lipper Multi-Cap Growth Funds Index		11.08			15.22			—			8.30
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		2.62			—			—			16.21
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–2.78			—			—			14.86
Russell 1000^® Growth Index		13.05			—			—			17.91
Lipper Multi-Cap Growth Funds Index		11.08			—			—			17.01
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		2.07			13.15			8.81	%		5.30
Russell 1000^® Growth Index		13.05			15.81			8.49			4.99
Lipper Multi-Cap Growth Funds Index		11.08			15.22			8.14			5.66
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		3.11			—			—			18.20
Russell 1000^® Growth Index		13.05			—			—			19.13
Lipper Multi-Cap Growth Funds Index		11.08			—			—			17.33

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Opportunity Portfolio

⁽⁴⁾ On May 21, 2010 Class C and Class I shares of Van Kampen Equity Growth Fund ("the Predecessor Fund") were reorganized into Class L and Class I shares of Morgan Stanley Equity Growth Portfolio ("the Portfolio"), respectively. Class L and Class I shares' returns of the Portfolio will differ from the Predecessor Fund as they have different expenses. Performance shown for the Portfolio's Class I and Class L shares reflects the performance of the shares of the Predecessor Fund for periods prior to May 21, 2010. The Class I shares of the Predecessor Fund commenced operations on August 12, 2005. The Class C shares of the Predecessor Fund commenced operations on May 28, 1998. Class P shares, which were renamed Class A shares effective September 9, 2013, commenced operations on May 21, 2010. In October 2010, the Morgan Stanley Equity Growth Portfolio changed its name to the Morgan Stanley Opportunity Portfolio.

⁽⁵⁾ Commenced offering September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Opportunity Portfolio

	Shares		Value (000)
Common Stocks (95.1%)
Aerospace & Defense (1.9%)
TransDigm Group, Inc.		21,908	$	4,302
Air Freight & Logistics (1.3%)
Expeditors International of Washington, Inc.		66,922		2,985
Beverages (1.7%)
Anheuser-Busch InBev N.V. (Belgium)		33,757		3,799
Capital Markets (4.7%)
CETIP SA — Mercados Organizados (Brazil)		289,051		3,500
WisdomTree Investments, Inc.		460,148		7,213
				10,713
Chemicals (4.2%)
Monsanto Co.		80,350		9,599
Diversified Consumer Services (2.6%)
TAL Education Group ADR (China) (a)		205,687		5,778
Diversified Financial Services (4.8%)
CME Group, Inc.		45,704		4,052
MSCI, Inc.		144,041		6,833
				10,885
Hotels, Restaurants & Leisure (2.6%)
Wynn Resorts Ltd.		39,907		5,937
Information Technology Services (18.7%)
Cognizant Technology Solutions Corp., Class A (a)		128,470		6,765
EPAM Systems, Inc. (a)		59,654		2,849
FleetCor Technologies, Inc. (a)		30,606		4,551
Luxoft Holding, Inc. (a)		59,955		2,309
Mastercard, Inc., Class A		150,511		12,968
Visa, Inc., Class A		49,316		12,931
				42,373
Insurance (3.0%)
Greenlight Capital Re Ltd., Class A (a)		205,494		6,709
Internet & Catalog Retail (18.6%)
Amazon.com, Inc. (a)		90,141		27,975
Priceline Group, Inc. (a)		12,557		14,318
				42,293
Internet Software & Services (25.6%)
Baidu, Inc. ADR (China) (a)		20,101		4,582
Facebook, Inc., Class A (a)		360,762		28,147
Google, Inc., Class A (a)		17,528		9,301
Google, Inc., Class C (a)		19,459		10,243
NAVER Corp. (Korea, Republic of) (a)		4,066		2,627
Twitter, Inc. (a)		90,963		3,263
				58,163
Road & Rail (3.6%)
DSV A/S (Denmark)		270,337		8,212
Textiles, Apparel & Luxury Goods (1.8%)
Burberry Group PLC (United Kingdom)		165,186		4,186
Total Common Stocks (Cost $114,615)				215,934

	Shares		Value (000)
Preferred Stock (0.8%)
Internet & Catalog Retail (0.8%)
Airbnb, Inc. Series D (a)(b)(c)(d) (acquisition cost — $1,502; acquired 4/16/14) (Cost $1,502)		36,894	$	1,860
Participation Note (3.2%)
Beverages (3.2%)
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 3/4/21 (a) (Cost $5,362)		235,037		7,188
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		43,552,434		75
USD/CNY November 2015 @ CNY 6.65		36,335,180		184
Total Call Options Purchased (Cost $240)				259
	Shares
Short-Term Investment (0.3%)
Investment Company (0.3%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $657)		657,472		657
Total Investments (99.5%) (Cost $122,376) (e)				225,898
Other Assets in Excess of Liabilities (0.5%)				1,141
Net Assets (100.0%)			$	227,039

(a) Non-income producing security.

(b) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at December 31, 2014 amounts to approximately $1,860,000 and represents 0.8% of net assets.

(d) At December 31, 2014, the Portfolio held a fair valued security valued at approximately $1,860,000, representing 0.8% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(e) The approximate fair value and percentage of net assets, $22,324,000 and 9.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Opportunity Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Other*		36.0	%
Internet Software & Services		25.7
Information Technology Services		18.8
Internet & Catalog Retail		19.5
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Opportunity Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $121,719)	$	225,241
Investment in Security of Affiliated Issuer, at Value (Cost $657)		657
Total Investments in Securities, at Value (Cost $122,376)		225,898
Foreign Currency, at Value (Cost $1)		1
Receivable for Investments Sold		11,903
Dividends Receivable		153
Tax Reclaim Receivable		8
Receivable for Portfolio Shares Sold		1
Receivable from Affiliate		—	@
Other Assets		26
Total Assets		237,990
Liabilities:
Payable for Investments Purchased		9,700
Payable for Portfolio Shares Redeemed		292
Due to Broker		260
Payable for Advisory Fees		250
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		145
Payable for Transfer Agency Fees — Class L		20
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		103
Payable for Sub Transfer Agency Fees — Class L		20
Payable for Shareholder Services Fees — Class A		40
Payable for Distribution and Shareholder Services Fees — Class L		19
Payable for Professional Fees		53
Payable for Administration Fees		16
Payable for Custodian Fees		4
Other Liabilities		27
Total Liabilities		10,951
Net Assets	$	227,039
Net Assets Consist Of:
Paid-in-Capital	$	120,667
Accumulated Net Investment Loss		(3	)
Accumulated Net Realized Gain		2,855
Unrealized Appreciation (Depreciation) on:
Investments		103,522
Foreign Currency Translations		(2	)
Net Assets	$	227,039

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	12,751
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		588,654
Net Asset Value, Offering and Redemption Price Per Share	$	21.66
CLASS A:
Net Assets	$	185,158
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		8,682,792
Net Asset Value, Redemption Price Per Share	$	21.32
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.18
Maximum Offering Price Per Share	$	22.50
CLASS L:
Net Assets	$	29,119
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,568,327
Net Asset Value, Offering and Redemption Price Per Share	$	18.57
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		510
Net Asset Value, Offering and Redemption Price Per Share	$	21.68

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Opportunity Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $47 of Foreign Taxes Withheld)	$	2,109
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		2,111
Expenses:
Advisory Fees (Note B)		1,194
Shareholder Services Fees — Class A (Note D)		488
Distribution and Shareholder Services Fees — Class L (Note D)		229
Transfer Agency Fees (Note E)		5
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		383
Transfer Agency Fees — Class L (Note E)		52
Transfer Agency Fees — Class IS (Note E)		2
Sub Transfer Agency Fees		20
Sub Transfer Agency Fees — Class I		8
Sub Transfer Agency Fees — Class A		170
Sub Transfer Agency Fees — Class L		26
Administration Fees (Note C)		191
Professional Fees		118
Shareholder Reporting Fees		99
Registration Fees		64
Custodian Fees (Note F)		34
Directors' Fees and Expenses		7
Pricing Fees		6
Other Expenses		21
Total Expenses		3,119
Reimbursement of Class Specific Expenses — Class A (Note B)		(77	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(5	)
Net Expenses		3,031
Net Investment Loss		(920	)
Realized Gain:
Investments Sold		7,012
Foreign Currency Transactions		14
Net Realized Gain		7,026
Change in Unrealized Appreciation (Depreciation):
Investments		(368	)
Foreign Currency Translations		(3	)
Net Change in Unrealized Appreciation (Depreciation)		(371	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		6,655
Net Increase in Net Assets Resulting from Operations	$	5,735

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Opportunity Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(920	)	$	(452	)
Net Realized Gain		7,026			24,778
Net Change in Unrealized Appreciation (Depreciation)		(371	)		58,253
Net Increase in Net Assets Resulting from Operations		5,735			82,579
Distributions from and/or in Excess of:
Class I:
Net Realized Gain		(252	)		(1,310	)
*Class A:**
Net Realized Gain		(3,870	)		(18,620	)
*Class H:**
Net Realized Gain		—			(2,020	)**
Class L:
Net Realized Gain		(697	)		(3,650	)
Class IS:
Net Realized Gain		(—	@)		(1	)^
Total Distributions		(4,819	)		(25,601	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		3,299			2,858
Distributions Reinvested		245			1,267
Redeemed		(4,460	)		(5,402	)
*Class A:**
Subscribed		4,061			1,716
Distributions Reinvested		3,713			17,797
Conversion from Class H		—			182,310
Redeemed		(31,707	)		(15,624	)
*Class H:**
Subscribed		—			2,568	**
Distributions Reinvested		—			1,916	**
Conversion to Class A		—			(182,310	)**
Redeemed		—			(30,117	)**
Class L:
Subscribed		301			841
Distributions Reinvested		637			3,317
Redeemed		(4,436	)		(6,127	)
Class IS:
Subscribed		—			10	^
Net Decrease in Net Assets Resulting from Capital Share Transactions		(28,347	)		(24,980	)
Total Increase (Decrease) in Net Assets		(27,431	)		31,998
Net Assets:
Beginning of Period		254,470			222,472
End of Period (Including Accumulated Net Investment Loss of $(3) and $(1))	$	227,039		$	254,470

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Opportunity Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		152			147
Shares Issued on Distributions Reinvested		12			62
Shares Redeemed		(208	)		(295	)
Net Decrease in Class I Shares Outstanding		(44	)		(86	)
*Class A:**
Shares Subscribed		191			81
Shares Issued on Distributions Reinvested		179			866
Conversion from Class H		—			9,616
Shares Redeemed		(1,492	)		(759	)
Net Increase (Decrease) in Class A Shares Outstanding		(1,122	)		9,804
*Class H:**
Shares Subscribed		—			149	**
Shares Issued on Distributions Reinvested		—			111	**
Conversion to Class A		—			(9,730	)**
Shares Redeemed		—			(1,742	)**
Net Decrease in Class H Shares Outstanding		—			(11,212	)
Class L:
Shares Subscribed		17			49
Shares Issued on Distributions Reinvested		35			186
Shares Redeemed		(239	)		(380	)
Net Decrease in Class L Shares Outstanding		(187	)		(145	)
Class IS:
Shares Subscribed		—			1	^

@ Amount is less than $500.

^ For the period September 13, 2013 through December 31, 2013.

* Effective September 9, 2013, Class P and H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Opportunity Portfolio

	Class I*
	Year Ended December 31,												Period from July 1, 2010 to December 31,			Year Ended June 30,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	21.47		$	16.59		$	15.16		$	15.23		$	11.91		$	9.59
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.02			0.02			0.02			0.00	‡		0.02			(0.02	)
Net Realized and Unrealized Gain (Loss)		0.61			7.13			1.41			(0.07	)		3.30			2.34
Total from Investment Operations		0.63			7.15			1.43			(0.07	)		3.32			2.32
Distributions from and/or in Excess of:
Net Realized Gain		(0.44	)		(2.27	)		—			—			—			—
Net Asset Value, End of Period	$	21.66		$	21.47		$	16.59		$	15.16		$	15.23		$	11.91
Total Return++		3.01	%		43.92	%		9.43	%		(0.46	)%		27.88	%#		24.19	%
Ratios and Supplemental Data:
Net Assets, End of Period (Millions)	$	12.8		$	13.6		$	11.9		$	13.2		$	13.0		$	11.0
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.81	%+		0.86	%+		0.88	%+		0.88	%+		0.72	%+@		1.14	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.90	%+@		0.96	%
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.07	%+		0.13	%+		0.14	%+		0.01	%+		0.25	%+@		(0.14	)%
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§@		N/A
Portfolio Turnover Rate		8	%		21	%		24	%		21	%		6	%#		12	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			0.87	%		0.91	%		0.95	%		N/A			N/A
Net Investment Income (Loss) to Average Net Assets		N/A			0.12	%		0.11	%		(0.06	)%		N/A			N/A

* On May 21, 2010, the Portfolio acquired substantially all of the assets and liabilities of the Van Kampen Equity Growth Fund ("the Predecessor Fund"). Therefore, the per share data and ratios of Class I shares for the 12-month period ended June 30, 2010 reflect the historical per share data of Class I shares of the Predecessor Fund.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

@ Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Opportunity Portfolio

	Class A**
	Year Ended December 31,												Period from July 1, 2010 to December 31,			Period from May 21, 2010^ to June 30,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	21.23		$	16.47		$	15.08		$	15.19		$	11.89		$	12.13
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.07	)		(0.10	)		(0.02	)		(0.04	)		0.00	‡		(0.01	)
Net Realized and Unrealized Gain (Loss)		0.60			7.13			1.41			(0.07	)		3.30			(0.23	)
Total from Investment Operations		0.53			7.03			1.39			(0.11	)		3.30			(0.24	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.44	)		(2.27	)		—			—			—			—
Net Asset Value, End of Period	$	21.32		$	21.23		$	16.47		$	15.08		$	15.19		$	11.89
Total Return++		2.62	%		43.51	%		9.22	%		(0.72	)%		27.75	%#		(1.98	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	185,158		$	208,161		$	12		$	2,098		$	2,113		$	1
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.23	%+		1.21	%+^^		1.13	%+		1.13	%+		0.97	%+*		1.39	%*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.15	%+*		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.34	)%+		(0.46	)%+		(0.11	)%+		(0.24	)%+		0.00	%§+*		(0.71	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§*		N/A
Portfolio Turnover Rate		8	%		21	%		24	%		21	%		6	%#		12	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.27	%		1.22	%		1.16	%		1.20	%		N/A			N/A
Net Investment Loss to Average Net Assets		(0.38	)%		(0.47	)%		(0.14	)%		(0.31	)%		N/A			N/A

** Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.23% for Class A Shares. Prior to September 16, 2013, the maximum ratio was 1.13% for Class A Shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Opportunity Portfolio

	Class L*
	Year Ended December 31,												Period from July 1, 2010 to December 31,			Year Ended June 30,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	18.64		$	14.74		$	13.57		$	13.73		$	10.78		$	8.77
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.16	)		(0.11	)		(0.09	)		(0.10	)		(0.03	)		(0.13	)
Net Realized and Unrealized Gain (Loss)		0.53			6.28			1.26			(0.06	)		2.98			2.14
Total from Investment Operations		0.37			6.17			1.17			(0.16	)		2.95			2.01
Distributions from and/or in Excess of:
Net Realized Gain		(0.44	)		(2.27	)		—			—			—			—
Net Asset Value, End of Period	$	18.57		$	18.64		$	14.74		$	13.57		$	13.73		$	10.78
Total Return++		2.07	%		42.78	%		8.62	%		(1.17	)%		27.37	%#		22.92	%
Ratios and Supplemental Data:
Net Assets, End of Period (Millions)	$	29.1		$	32.7		$	28.0		$	30.8		$	39.0		$	34.8
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.73	%+		1.65	%+^		1.63	%+		1.63	%+		1.47	%+@		2.12	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.65	%+@		1.94	%
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.84	)%+		(0.65	)%+		(0.61	)%+		(0.74	)%+		(0.50	)%+@		(1.16	)%
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§@		N/A
Portfolio Turnover Rate		8	%		21	%		24	%		21	%		6	%#		12	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.74	%		1.67	%		1.66	%		1.70	%		N/A			N/A
Net Investment Loss to Average Net Assets		(0.85	)%		(0.67	)%		(0.64	)%		(0.81	)%		N/A			N/A

* On May 21, 2010, the Portfolio acquired substantially all of the assets and liabilities of the Van Kampen Equity Growth Fund ("the Predecessor Fund"). Therefore, the per share data and ratios of Class L shares for the 12-month period ended June 30, 2010 reflect the historical per share data of Class L shares of the Predecessor Fund.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.73% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.63% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

@ Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Opportunity Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	21.47		$	19.59
Income from Investment Operations:
Net Investment Income†		0.03			0.00	‡
Net Realized and Unrealized Gain		0.62			3.95
Total from Investment Operations		0.65			3.95
Distributions from and/or in Excess of:
Net Realized Gain		(0.44	)		(2.07	)
Net Asset Value, End of Period	$	21.68		$	21.47
Total Return++		3.11	%		20.51	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	11		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.72	%+		0.73	%+^^*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.16	%+		0.06	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		8	%		21	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		18.47	%		5.67	%*
Net Investment Loss to Average Net Assets		(17.59	)%		(4.88	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.81% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Opportunity Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established and emerging franchise companies with capitalizations within the range of companies included in the Russell 1000® Growth Index. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which

Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	4,302	$	—	$	—	$	4,302
Air Freight & Logistics		2,985		—		—		2,985
Beverages		—		3,799		—		3,799
Capital Markets		7,213		3,500		—		10,713
Chemicals		9,599		—		—		9,599
Diversified Consumer Services		5,778		—		—		5,778
Diversified Financial Services		10,885		—		—		10,885
Hotels, Restaurants & Leisure		5,937		—		—		5,937
Information Technology Services		42,373		—		—		42,373
Insurance		6,709		—		—		6,709
Internet & Catalog Retail		42,293		—		—		42,293
Internet Software & Services		55,536		2,627		—		58,163
Road & Rail		—		8,212		—		8,212
Textiles, Apparel & Luxury Goods		—		4,186		—		4,186
Total Common Stocks		193,610		22,324		—		215,934
Preferred Stock		—		—		1,860		1,860
Participation Note		—		7,188		—		7,188
Call Options Purchased		—		259		—		259
Short-Term Investment
Investment Company		657		—		—		657
Total Assets	$	194,267	$	29,771	$	1,860	$	225,898

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $22,324,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Preferred Stock (000)
Beginning Balance	$	—
Purchases		1,502
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		358
Realized gains (losses)		—
Ending Balance	$	1,860
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	358

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of December 31, 2014.

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range				Weighted Average		Impact to Valuation from an Increase in Input
Internet & Catalog Retail
Preferred Stock	$	1,860	Market Transaction Method	Tender Offer Valuation	$	50.41	$	50.41	$	50.41	Increase

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

259

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(241	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	131	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	259	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	259	$	—	$	(259	)	$	0

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					101,707,000

5. Structured Investments: The Portfolio invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Portfolio will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

8. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Next $1 billion				Next $1 billion				Over $3 billion
	0.50	%			0.45	%			0.40	%			0.35	%

For the year ended December 31, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.50% of the Portfolio's average daily net assets.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $19,584,000 and $51,782,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $5,000 relating to the Portfolio's investment in the Liquidity Funds.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	7,433			$	35,373			$	42,149			$	2			$	657

During the year ended December 31, 2014, the Portfolio incurred approximately $3,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

tax years in the four-year period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	392	$	4,427	$	—	$	25,601

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, basis adjustments on certain equity securities and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Net Investment Loss (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	918			$	(405	)		$	(513	)

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	—			$	2,644

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $122,164,000. The aggregate gross unrealized appreciation is approximately $104,018,000 and the aggregate gross unrealized depreciation is approximately $284,000 resulting in net unrealized appreciation of approximately $103,734,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 67% and 10%, for Class I and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Opportunity Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Opportunity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Opportunity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of years or the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 100.0% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $4,427,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIOPPANN
1110200 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Opportunity Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					27
Federal Tax Notice					28
U.S. Privacy Policy					29
Director and Officer Information					32

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Opportunity Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Opportunity Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Opportunity Portfolio Class I	$	1,000.00	$	1,027.90	$	1,019.06	$	6.24	$	6.21		1.22	%
Global Opportunity Portfolio Class A		1,000.00		1,025.40		1,017.09		8.22		8.19		1.61
Global Opportunity Portfolio Class L		1,000.00		1,025.60		1,016.94		8.37		8.34		1.64
Global Opportunity Portfolio Class IS		1,000.00		1,027.80		1,019.31		5.98		5.96		1.17

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Opportunity Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 9.04%, net of fees, for Class I shares. The Portfolio's Class I shares outperformed against the Portfolio's benchmark, the MSCI All Country World Index (the "Index"), which returned 4.16%.

Factors Affecting Performance

• Global equity market performance during the period was essentially divided between the U.S., which performed well, and non-U.S., which struggled. In the U.S., strong economic growth, further reduction in the unemployment rate, the gradual winding down of the Federal Reserve's (Fed) stimulus program as expected, generally healthy corporate earnings and low inflation bolstered investor optimism for U.S. stocks.

• The Portfolio's relative outperformance versus the Index was driven by both stock selection and sector allocation, although sector allocations are a result of where we're finding the most attractive individual stock opportunities.

• Adding the most to relative returns was stock selection in the consumer staples sector, where the Portfolio's holding in a liquor producer in China (which is not represented in the Index) was the top contributor to performance in the overall Portfolio during the period.ⁱ

• The Portfolio's lack of exposure to the energy sector, the Index's weakest-performing group, was advantageous to performance.

• The consumer discretionary sector was the third-largest contributor, primarily due to stock selection there. Relative gains in the sector were led by a position in an after-school tutoring provider serving kindergarten through 12th grade throughout China, a stock which is not represented in the Index.

• The Portfolio's lack of exposure to the health care sector, which was the best-performing sector in the Index during the period, was unfavorable to relative results and the main detractor.

• An underweight position in the utilities sector also dampened relative returns, as the sector was the third-best performing sector in the Index during the period.

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to look for established and emerging franchise companies located throughout the world. We typically favor companies with the potential for strong free cash flow generation as well as have consistent or rising earnings growth records and compelling business strategies, and that we believe are undervalued at the time of purchase. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

(i) To gain exposure to the stock, the Portfolio utilized a P-note (participation note), which is intended to mirror the performance of the underlying stock. There is no leverage associated with P-notes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Opportunity Portfolio

* Minimum Investment for Class I shares

** Commenced Operations on May 30, 2008.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the MSCI All Country World Index⁽¹⁾ and the Lipper Global Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		9.04	%		15.59	%		—		9.86	%
MSCI All Country World Index		4.16			9.17			—		3.33
Lipper Global Multi-Cap Growth Funds Index		2.86			9.76			—		4.14
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		8.55			—			—		17.64
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		2.83			—			—		16.27
MSCI All Country World Index		4.16			—			—		11.86
Lipper Global Multi-Cap Growth Funds Index		2.86			—			—		11.80
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		8.46			15.15			—		9.48
MSCI All Country World Index		4.16			9.17			—		3.33
Lipper Global Multi-Cap Growth Funds Index		2.86			9.76			—		4.14
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		8.96			—			—		21.62
MSCI All Country World Index		4.16			—			—		9.53
Lipper Global Multi-Cap Growth Funds Index		2.86			—			—		9.52

⁽¹⁾ The MSCI All Country World Index (ACWI) is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Global Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Global Multi-Cap Growth Funds classification.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Opportunity Portfolio

reimbursements when it deems that such action is appropriate. The Distributor has agreed to waive for at least one year the 12b-1 fee on Class L shares of the Portfolio to the extent it exceeds 0.30% of the average daily net assets of such shares on an annualized basis.

⁽⁴⁾ On May 21, 2010 Class C and Class I shares of Van Kampen Global Growth Fund ("the Predecessor Fund") were reorganized into Class L and Class I shares of Morgan Stanley Global Growth Portfolio ("the Portfolio"), respectively. Class L and Class I shares' returns of the Portfolio will differ from the Predecessor Fund as they have different expenses. Performance shown for the Portfolio's Class I and Class L shares reflects the performance of the shares of the Predecessor Fund for periods prior to May 21, 2010. The Class C and I shares of the Predecessor Fund commenced operations on May 30, 2008. Class P shares, which were renamed Class A shares effective September 9, 2013, commenced operations on May 21, 2010. In October 2010, the Morgan Stanley Global Growth Portfolio changed its name to the Morgan Stanley Global Opportunity Portfolio.

⁽⁵⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Opportunity Portfolio

	Shares		Value (000)
Common Stocks (90.8%)
Australia (0.0%)
AET&D Holdings No. 1 Ltd. (a)(b)(c)		36,846	$	—
Belgium (1.6%)
Anheuser-Busch InBev N.V.		3,478		391
Brazil (2.9%)
CETIP SA — Mercados Organizados		59,144		716
Canada (1.8%)
Brookfield Infrastructure Partners LP		10,896		456
China (12.8%)
Autohome, Inc. ADR (a)		15,364		559
Baidu, Inc. ADR (a)		3,299		752
JD.com, Inc. ADR (a)		11,792		273
Qihoo 360 Technology Co., Ltd. ADR (a)		6,485		371
TAL Education Group ADR (a)		45,093		1,267
				3,222
Denmark (4.6%)
DSV A/S		37,973		1,154
Hong Kong (0.7%)
Louis XIII Holdings Ltd. (a)		433,620		187
India (4.2%)
Adani Ports and Special Economic Zone		102,393		517
Jubilant Foodworks Ltd. (a)		24,278		527
				1,044
Japan (2.2%)
Calbee, Inc.		15,800		546
Korea, Republic of (4.6%)
Hotel Shilla Co., Ltd. (a)		4,875		403
NAVER Corp. (a)		1,172		757
				1,160
South Africa (3.5%)
Naspers Ltd., Class N		6,916		890
Switzerland (1.5%)
Kuehne & Nagel International AG (Registered)		2,796		380
United Kingdom (5.4%)
Burberry Group PLC		31,922		809
Intertek Group PLC		7,472		271
Just Eat PLC (a)		57,365		273
				1,353
United States (45.0%)
Amazon.com, Inc. (a)		4,322		1,341
Cognizant Technology Solutions Corp., Class A (a)		14,082		742
EPAM Systems, Inc. (a)		20,560		982
Facebook, Inc., Class A (a)		22,145		1,728
Google, Inc., Class A (a)		1,413		750
Google, Inc., Class C (a)		1,432		754
Greenlight Capital Re Ltd., Class A (a)		13,585		443
Luxoft Holding, Inc. (a)		19,716		759
Mastercard, Inc., Class A		9,888		852
Monsanto Co.		3,882		464
Priceline Group, Inc. (a)		698		796

	Shares		Value (000)
Visa, Inc., Class A		3,234	$	848
WisdomTree Investments, Inc.		32,466		509
Wynn Resorts Ltd.		2,200		327
				11,295
Total Common Stocks (Cost $18,470)				22,794
Preferred Stocks (1.5%)
India (1.1%)
Flipkart Online Services Pvt Ltd. Series D (a)(b)(c)(d) (acquisition cost — $51; acquired 10/4/13)		2,242		268
United States (0.4%)
Airbnb, Inc. Series D (a)(b)(c)(d) (acquisition cost — $92; acquired 4/16/14)		2,259		114
Total Preferred Stocks (Cost $143)				382
Convertible Preferred Stock (0.0%)
China (0.0%)
Youku Tudou, Inc., Class A (a)(b)(c)(d) (acquisition cost — $—@; acquired 9/16/10) (Cost $—@)		9		—	@
Participation Notes (4.1%)
China (4.1%)
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 2/13/15 (a)		20,878		640
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 3/4/21 (a)		12,885		394
Total Participation Notes (Cost $813)				1,034
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		2,754,345		5
USD/CNY November 2015 @ CNY 6.65		2,863,668		14
Total Call Options Purchased (Cost $17)				19
	Shares
Short-Term Investment (2.5%)
Investment Company (2.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $619)		619,304		619
Total Investments (99.0%) (Cost $20,062) (e)				24,848
Other Assets in Excess of Liabilities (1.0%)				243
Net Assets (100.0%)			$	25,091

(a) Non-income producing security.

(b) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $382,000, representing 1.5% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Global Opportunity Portfolio

(d) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at December 31, 2014 amounts to approximately $382,000 and represents 1.5% of net assets.

(e) The approximate fair value and percentage of net assets, $7,821,000 and 31.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

@ Value is less than $500.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		32.2	%
Internet Software & Services		23.9
Information Technology Services		16.8
Internet & Catalog Retail		11.2
Beverages		5.7
Diversified Consumer Services		5.1
Hotels, Restaurants & Leisure		5.1
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Opportunity Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $19,443)	$	24,229
Investment in Security of Affiliated Issuer, at Value (Cost $619)		619
Total Investments in Securities, at Value (Cost $20,062)		24,848
Foreign Currency, at Value (Cost $—@)		—	@
Cash		4
Receivable for Investments Sold		1,072
Receivable for Portfolio Shares Sold		53
Due from Adviser		15
Dividends Receivable		11
Tax Reclaim Receivable		4
Receivable from Affiliate		—	@
Other Assets		17
Total Assets		26,024
Liabilities:
Payable for Investments Purchased		822
Payable for Professional Fees		66
Deferred Capital Gain Country Tax		19
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		4
Payable for Transfer Agency Fees — Class L		1
Payable for Portfolio Shares Redeemed		7
Payable for Custodian Fees		3
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Administration Fees		2
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		4
Total Liabilities		933
Net Assets	$	25,091
Net Assets Consist Of:
Paid-in-Capital	$	20,000
Accumulated Net Investment Loss		(—	@)
Accumulated Net Realized Gain		325
Unrealized Appreciation (Depreciation) on:
Investments (Net of $19 of Deferred Capital Gain Country Tax)		4,767
Foreign Currency Translations		(1	)
Net Assets	$	25,091

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	11,037
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		789,392
Net Asset Value, Offering and Redemption Price Per Share	$	13.98
CLASS A:
Net Assets	$	12,952
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		942,270
Net Asset Value, Redemption Price Per Share	$	13.75
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.76
Maximum Offering Price Per Share	$	14.51
CLASS L:
Net Assets	$	1,091
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		80,095
Net Asset Value, Offering and Redemption Price Per Share	$	13.62
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		805
Net Asset Value, Offering and Redemption Price Per Share	$	13.99

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Opportunity Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $7 of Foreign Taxes Withheld)	$	120
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		120
Expenses:
Advisory Fees (Note B)		144
Professional Fees		124
Registration Fees		55
Shareholder Services Fees — Class A (Note D)		18
Distribution and Shareholder Services Fees — Class L (Note D)		7
Custodian Fees (Note F)		19
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		10
Transfer Agency Fees — Class L (Note E)		3
Transfer Agency Fees — Class IS (Note E)		2
Shareholder Reporting Fees		15
Administration Fees (Note C)		13
Pricing Fees		6
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		3
Sub Transfer Agency Fees — Class L		—	@
Directors' Fees and Expenses		1
Other Expenses		9
Total Expenses		433
Waiver of Advisory Fees (Note B)		(144	)
Expenses Reimbursed by Adviser (Note B)		(62	)
Distribution Fees — Class L Shares Waived (Note D)		(4	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		219
Net Investment Loss		(99	)
Realized Gain (Loss):
Investments Sold		1,335
Foreign Currency Transactions		(4	)
Net Realized Gain		1,331
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $15)		38
Foreign Currency Translations		(1	)
Net Change in Unrealized Appreciation (Depreciation)		37
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,368
Net Increase in Net Assets Resulting from Operations	$	1,269

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Opportunity Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(99	)	$	(33	)
Net Realized Gain		1,331			1,190
Net Change in Unrealized Appreciation (Depreciation)		37			2,357
Net Increase in Net Assets Resulting from Operations		1,269			3,514
Distributions from and/or in Excess of:
Class I:
Net Realized Gain		(523	)		(730	)
*Class A:**
Net Realized Gain		(586	)		(289	)
*Class H:**
Net Realized Gain		—			(98	)**
Class L:
Net Realized Gain		(71	)		(51	)
Class IS:
Net Realized Gain		(1	)		(1	)***
Total Distributions		(1,181	)		(1,169	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		3,648			717
Distributions Reinvested		124			93
Redeemed		(166	)		(60	)
*Class A:**
Subscribed		10,218			237
Distributions Reinvested		586			288
Conversion from Class H		—			3,201
Redeemed		(1,863	)		(182	)
*Class H:**
Subscribed		—			5	**
Distributions Reinvested		—			97	**
Conversion to Class A		—			(3,201	)
Redeemed		—			(1,340	)**
Class L:
Subscribed		809			26
Distributions Reinvested		62			37
Redeemed		(303	)		(33	)
Class IS:
Subscribed		—			10	***
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		13,115			(105	)
Total Increase in Net Assets		13,203			2,240
Net Assets:
Beginning of Period		11,888			9,648
End of Period (Including Accumulated Net Investment Loss of $(—@) and $(—@))	$	25,091		$	11,888

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Opportunity Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		258			64
Shares Issued on Distributions Reinvested		9			7
Shares Redeemed		(12	)		(4	)
Net Increase in Class I Shares Outstanding		255			67
*Class A:**
Shares Subscribed		734			18
Shares Issued on Distributions Reinvested		43			22
Conversion from Class H		—			268
Shares Redeemed		(136	)		(15	)
Net Increase in Class A Shares Outstanding		641			293
*Class H:**
Shares Subscribed		—			1	**
Shares Issued on Distributions Reinvested		—			9	**
Conversion to Class A		—			(268	)
Shares Redeemed		—			(124	)**
Net Decrease in Class H Shares Outstanding		—			(382	)
Class L:
Shares Subscribed		58			2
Shares Issued on Distributions Reinvested		5			3
Shares Redeemed		(22	)		(3	)
Net Increase in Class L Shares Outstanding		41			2
Class IS:
Shares Subscribed		—			1	***

@ Amount is less than $500.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Opportunity Portfolio

	Class I**
	Year Ended December 31,												Period from April 1, 2010 to December 31,			Year Ended March 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	13.65		$	10.84		$	10.26		$	11.58		$	9.53		$	5.08
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.06	)		(0.02	)		0.01			0.02			(0.00	)‡		0.01
Net Realized and Unrealized Gain (Loss)		1.26			4.21			1.01			(0.57	)		2.05			4.47
Total from Investment Operations		1.20			4.19			1.02			(0.55	)		2.05			4.48
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.03	)
Net Realized Gain		(0.87	)		(1.38	)		(0.44	)		(0.77	)		—			—
Total Distributions		(0.87	)		(1.38	)		(0.44	)		(0.77	)		—			(0.03	)
Redemption Fees		—			—			—			0.00	‡		—			—
Net Asset Value, End of Period	$	13.98		$	13.65		$	10.84		$	10.26		$	11.58		$	9.53
Total Return++		9.04	%		40.12	%		9.99	%		(4.90	)%		21.51	%#		88.32	%
Ratios and Supplemental Data:
Net Assets, End of Period (Millions)	$	11.0		$	7.3		$	5.1		$	8.4		$	5.4		$	5.6
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.17	%+		1.24	%+		1.25	%+		1.25	%+		1.25	%+*		1.25	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.07	%+*		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.42	)%+		(0.21	)%+		0.06	%+		0.13	%+		(0.01	)%+*		0.09	%
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.00	%§		0.00	%§		0.01	%*		N/A
Portfolio Turnover Rate		29	%		38	%		33	%		39	%		19	%#		17	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.47	%		3.36	%		2.57	%		2.92	%		2.77	%+*		4.51	%
Net Investment Loss to Average Net Assets		(1.72	)%		(2.33	)%		(1.26	)%		(1.54	)%		(1.53	)%+*		(3.17	)%

** On May 21, 2010, the Portfolio acquired substantially all of the assets and liabilities of the Van Kampen Global Growth Fund ("the Predecessor Fund"). Therefore, the per share data and ratios of Class I shares for the period ended December 31, 2010 and the prior year reflects the historical per share data of Class I shares of the Predecessor Fund.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Opportunity Portfolio

	Class A@
	Year Ended December 31,												Period from May 21, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.48		$	10.75		$	10.21		$	11.56		$	8.62
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.11	)		(0.15	)		(0.02	)		(0.01	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		1.25			4.26			1.00			(0.57	)		3.00
Total from Investment Operations		1.14			4.11			0.98			(0.58	)		2.94
Distributions from and/or in Excess of:
Net Realized Gain		(0.87	)		(1.38	)		(0.44	)		(0.77	)		—
Redemption Fees		—			—			—			0.00	‡		—
Net Asset Value, End of Period	$	13.75		$	13.48		$	10.75		$	10.21		$	11.56
Total Return++		8.55	%		39.80	%		9.65	%		(5.16	)%		34.11	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12,952		$	4,057		$	87		$	10		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.56	%+		1.59	%+^^		1.50	%+		1.50	%+		1.53	%+*
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.87	%+*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.82	)%+		(1.15	)%+		(0.19	)%+		(0.12	)%+		(0.89	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		29	%		38	%		33	%		39	%		19	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.86	%		3.93	%		2.82	%		3.17	%		4.52	%+*
Net Investment Loss to Average Net Assets		(2.12	)%		(3.49	)%		(1.51	)%		(1.79	)%		(3.88	)%+*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Opportunity Portfolio

	Class L**
	Year Ended December 31,												Period from April 1, 2010 to December 31,			Year Ended March 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010			2010
Net Asset Value, Beginning of Period	$	13.38		$	10.68		$	10.15		$	11.50		$	9.48		$	5.08
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.12	)		(0.07	)		(0.03	)		(0.02	)		(0.04	)		(0.09	)
Net Realized and Unrealized Gain (Loss)		1.23			4.15			1.00			(0.56	)		2.06			4.51
Total from Investment Operations		1.11			4.08			0.97			(0.58	)		2.02			4.42
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.02	)
Net Realized Gain		(0.87	)		(1.38	)		(0.44	)		(0.77	)		—			—
Total Distributions		(0.87	)		(1.38	)		(0.44	)		(0.77	)		—			(0.02	)
Redemption Fees		—			—			—			0.00	‡		—			—
Net Asset Value, End of Period	$	13.62		$	13.38		$	10.68		$	10.15		$	11.50		$	9.48
Total Return++		8.46	%		39.79	%		9.61	%		(5.19	)%		21.31	%#		87.08	%
Ratios and Supplemental Data:
Net Assets, End of Period (Millions)	$	1.0		$	0.5		$	0.4		$	0.5		$	0.7		$	1.4
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.64	%+		1.58	%+^^		1.55	%+		1.55	%+		2.09	%+*		2.11	%
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.91	%+*		N/A
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.87	)%+		(0.57	)%+		(0.24	)%+		(0.17	)%+		(0.85	)%+*		(1.03	)%
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.00	%§		0.00	%§		0.01	%*		N/A
Portfolio Turnover Rate		29	%		38	%		33	%		39	%		19	%#		17	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.52	%		4.23	%		3.32	%		3.67	%		3.61	%+*		5.37	%
Net Investment Loss to Average Net Assets		(2.75	)%		(3.22	)%		(2.01	)%		(2.29	)%		(2.37	)%+*		(4.29	)%

** On May 21, 2010, the Portfolio acquired substantially all of the assets and liabilities of the Van Kampen Global Growth Fund ("the Predecessor Fund"). Therefore, the per share data and ratios of Class L shares for the period ended December 31, 2010 and the prior year reflects the historical per share data of Class C shares of the Predecessor Fund.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.55% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Opportunity Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	13.65		$	12.43
Income (Loss) from Investment Operations:
Net Investment Income Loss†		(0.06	)		(0.03	)
Net Realized and Unrealized Gain		1.27			2.27
Total from Investment Operations		1.21			2.24
Distributions from and/or in Excess of:
Net Realized Gain		(0.87	)		(1.02	)
Net Asset Value, End of Period	$	13.99		$	13.65
Total Return++		8.96	%		18.35	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	11		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.17	%+		1.18	%+^^*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.42	)%+		(0.74	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§*
Portfolio Turnover Rate		29	%		38	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		19.50	%		8.44	%*
Net Investment Loss to Average Net Assets		(18.75	)%		(8.00	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.18% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Opportunity Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established and emerging franchise companies located throughout the world, with capitalizations within the range of companies included in the MSCI All Country World Index. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available,

including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Beverages	$	—	$	391	$	—		$	391
Capital Markets		509		716		—			1,225
Chemicals		464		—		—			464
Construction & Engineering		—		187		—			187
Diversified Consumer Services		1,267		—		—			1,267
Electric Utilities		456		—		—	†		456	†
Food Products		—		546		—			546
Hotels, Restaurants & Leisure		327		930		—			1,257
Information Technology Services		4,183		—		—			4,183
Insurance		443		—		—			443
Internet & Catalog Retail		2,410		—		—			2,410
Internet Software & Services		4,914		1,030		—			5,944
Marine		—		380		—			380
Media		—		890		—			890
Professional Services		—		271		—			271
Road & Rail		—		1,154		—			1,154

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Common Stocks (cont'd)
Textiles, Apparel & Luxury Goods	$	—	$	809	$	—		$	809
Transportation Infrastructure		—		517		—			517
Total Common Stocks		14,973		7,821		—	†		22,794	†
Preferred Stocks		—		—		382			382
Convertible Preferred Stock		—		—		—	@		—	@
Participation Notes		—		1,034		—			1,034
Call Options Purchased		—		19		—			19
Short-Term Investment
Investment Company		619		—		—			619
Total Assets	$	15,592	$	8,874	$	382	†	$	24,848	†

@ Value is less than $500.

† Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $7,548,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which

occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)			Convertible Preferred Stock (000)			Preferred Stocks (000)
Beginning Balance	$	—	†	$	—	@	$	53
Purchases		—			—			92
Sales		—			—			—
Amortization of discount		—			—			—
Transfers in		—			—			—
Transfers out		—			—			—
Corporate actions		—			—			—
Change in unrealized appreciation (depreciation)		—			(—	@)		237
Realized gains (losses)		—			—			—
Ending Balance	$	—	†	$	—	@	$	382
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	—		$	(—	@)	$	237

@ Value is less than $500.

† Includes one security which is valued at zero.

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range				Selected Value		Impact to Valuation from an Increase in Input
Internet & Catalog Retail
Preferred Stocks	$	114	Market Transaction Method	Tender Offer Valuation	$	50.41	$	50.41	$	50.41	Increase
	$	268	Market Transaction Method	Precedent Transaction of Preferred Stock	$	119.76	$	119.76	$	119.76	Increase

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Options: In respect to options, the Portfolio is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Portfolio buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument, at an agreed-upon price typically in exchange for a premium paid by the Portfolio. The Portfolio may purchase and/or sell put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Portfolio bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(12	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	8	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	19	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	19	$	—	$	—	$	19

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					5,448,000

exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

6. Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

semiannually. Net realized capital gains, if any, are distributed at least annually.

9. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses-distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $750 million				Next $750 million				Over $1.5 billion
	0.90	%			0.85	%			0.80	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.25% for Class I shares, 1.60% for Class A shares, 1.65% for Class L shares and 1.18% for Class IS shares. Effective January 23, 2015, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses will not exceed 1.10% for Class I shares, 1.45% for Class A shares, 1.50% for Class L shares and 1.03% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of

such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $144,000 of advisory fees were waived and approximately $65,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

The Fund has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Portfolio pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year the 12b-1 fees on Class L shares of the Portfolio to the extent it exceeds 0.30% of the average daily net assets of such shares on an annualized basis. For the year ended December 31, 2014, this waiver amounted to approximately $4,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $15,733,000 and $4,563,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	88			$	14,848			$	14,317			$	—	@		$	619

@ Amount is less than $500.

During the year ended December 31, 2014, the Portfolio incurred less than $500 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Portfolio.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	160	$	1,020	$	25	$	1,144

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Accumulated Net Investment Loss (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	99			$	(101	)		$	2

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	3			$	344

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $20,085,000. The aggregate gross unrealized appreciation is approximately $4,995,000 and the aggregate gross unrealized depreciation is approximately $232,000 resulting in net unrealized appreciation of approximately $4,763,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 48% and 17%, for Class A and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Opportunity Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Opportunity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Opportunity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 22.8% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $1,020,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGOANN
1110059 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Select Global Infrastructure Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					25
Federal Tax Notice					26
U.S. Privacy Policy					27
Director and Officer Information					30

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Select Global Infrastructure Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Select Global Infrastructure Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Select Global Infrastructure Portfolio Class I	$	1,000.00	$	1,007.50	$	1,019.71	$	5.52	$	5.55		1.09	%
Select Global Infrastructure Portfolio Class A		1,000.00		1,004.80		1,017.90		7.33		7.38		1.45
Select Global Infrastructure Portfolio Class L		1,000.00		1,002.50		1,015.12		10.09		10.16		2.00
Select Global Infrastructure Portfolio Class IS		1,000.00		1,007.00		1,019.76		5.46		5.50		1.08

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Select Global Infrastructure Portfolio

The Portfolio seeks to provide both capital appreciation and income.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 15.38%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the Dow Jones Brookfield Global Infrastructure Index^SM (the "Index"), which returned 16.34%, but outperformed the S&P Global BMI Index, a proxy for global equities, which returned 4.36%.

Factors Affecting Performance

• Infrastructure shares appreciated 16.34% during the period, as measured by the Index. Among the major infrastructure sectors, the electricity transmission & distribution, gas midstream, and communications sectors outperformed the Index, while toll roads, gas distribution utilities, and European regulated utilities underperformed the Index. Pipeline companies performed largely in line with the Index for the year, and among sectors with more modest benchmark weightings, the ports, water, and airports sectors all underperformed.

• The favorable performance achieved by global listed infrastructure securities over the last few years was once again realized in 2014, despite some volatility within certain sectors in the second half of the year, most notably those related to energy infrastructure (i.e., gas midstream and pipeline companies). From a broad macro perspective, declining interest rates almost universally provided a tailwind for infrastructure valuations in 2014; economic trends, however, provided more mixed results, with strength in the U.S. economy offset by a more muted outlook for countries in Europe, Asia, and South America.

• For utility-related sectors (electricity transmission & distribution, gas distribution utilities, water, and European regulated utilities) the dominant driver of investment performance was the universal decline in interest rates observed across developed markets, although regulatory developments (specifically, rate cases, the formal process for public utilities to set pricing for consumers) and spinoffs/corporate reorganizations also helped support returns. As it relates to spinoffs/reorganizations, the sell-down of mature, highly stable contracted assets into "yieldcos" was a popular theme in 2014. Yieldcos are publicly traded companies created to own assets

(such as power plants) that generate regular income streams and distribute the income to shareholders as dividends. The spinoff of energy-related assets into a master limited partnership, or MLP, also remained a popular theme.

• 2014 was a tale of two worlds for the energy infrastructure (pipeline companies, gas midstream) universe, with strong returns through three quarters being somewhat offset by dramatic declines in the fourth quarter. The dominant influencing factor by the end of the year was the decline in commodity prices, with crude oil down approximately 50% from peak and natural gas down approximately 40%. Leading up to the fourth quarter decline, however, investment performance was driven by the announcement of a number of export projects (liquefied natural gas, certain natural gas liquid products), gas transmission tie-ins, as well as corporate restructurings/conversions (e.g., conversion of corporate parents into "pure-play" general partners of MLP-qualifying assets). The Kinder Morgan announcement to consolidate its MLPs and parent company into single corporate entity also provided an uplift for certain companies thought to be potential takeout candidates.

• In the communications sector (wireless towers, satellites), strong leasing activity, in particular for international assets, drove the investment performance of select wireless tower names. Satellite performance, which was more muted than that for towers, benefited from stable video leasing activity combined with moderating headwinds relating to government services contracts.

• Within the transportation sector, investment performance in airports, toll roads, and ports was driven by modest traffic/volume growth reflecting tentative economic recovery in a number of regions. For European transportation companies, favorable first half performance gave way to more modest performance in the second half as investors dialed back expectations for growth. For railroads, in particular the Class I rails in North America, investment performance was driven by a combination of strong volume growth in a number of commodity products, as well as favorable intermodal carload trends helped by a tight trucking market. Declining interest rates and merger-and-acquisition/privatization activity further provided support for share price appreciation in the sector.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Select Global Infrastructure Portfolio

• For full-year 2014, the Portfolio realized outperformance from bottom-up stock selection, which was offset by adverse top-down positioning. From a bottom-up perspective, the Portfolio benefited from favorable stock selection in the pipeline companies, water, toll roads, gas midstream, electricity transmission & distribution, gas distribution utilities and diversified sectors. The positive contribution was partially offset by adverse selection in airports and communications. From a top-down perspective, the Portfolio benefited from overweights to a group of companies in the pipeline companies, railroads, and communications sectors, as well as underweights to a group of companies in the ports, gas distribution utilities and European regulated utilities sectors. But the gains were more than offset by relative losses from the Portfolio's underweights to a group of companies in the electricity transmission & distribution and the gas midstream sectors, and overweights to a group of companies in toll roads and water sectors.

Management Strategies

• Heading into 2015, we remain positive on the communications and transportation sectors, despite their strong performance in 2014. We are also increasingly constructive on energy infrastructure, which, while likely to face some operating headwinds in later 2015 and early 2016, looks much more attractive from a valuation perspective than in the recent past and still represents a favorable medium to long-term fundamental story, in our view. Currently, we are least favorable on the utility-related sectors, despite their defensiveness and operating stability, given the very strong share price performance in 2014. Outside of spinoff/restructuring stories and select companies with regulatory events occurring over the near future, we struggle to find value in these sectors.

• We remain committed to our core investment philosophy as an infrastructure value investor. As a value-oriented, bottom-up driven investor, our investment perspective is that over the medium- and long-term, the key factor in determining the performance of infrastructure securities will be underlying infrastructure asset values. Given the large and growing private infrastructure market, we believe that there are limits as to the level of premium or discount at which the public sector should trade relative to its underlying private infrastructure value. These limits can be viewed as the point at which the

arbitrage opportunity between owning infrastructure in the private versus public markets becomes compelling. In aiming to achieve core infrastructure exposure in a cost effective manner, we invest in equity securities of publicly listed infrastructure companies we believe offer the best value relative to their underlying infrastructure value and growth prospects.

• Our research currently leads us to an overweighting in the Portfolio to a group of companies in the toll roads, airports, communications, pipeline companies, and water sectors, and an underweighting to companies in the gas distribution utilities, electricity transmission & distribution, European regulated utilities, gas midstream, and port sectors. In addition, we have out-of-benchmark positions in railroads and power purchase agreement-contracted renewables, both of which we deem appropriate infrastructure investments under our definition of core infrastructure.

* Minimum Investment for Class I shares

** Commenced Operations on September 20, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Select Global Infrastructure Portfolio

Performance Compared to the Dow Jones Brookfield Global Infrastructure Index^SM(1) and the S&P Global BMI Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		15.38	%		—		—		16.98	%
Dow Jones Brookfield Global Infrastructure Index^SM		16.34			—		—		16.00
S&P Global BMI Index		4.36			—		—		10.81
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		14.94			—		—		16.66
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		8.90			—		—		15.21
Dow Jones Brookfield Global Infrastructure Index^SM		16.34			—		—		16.00
S&P Global BMI Index		4.36			—		—		10.81
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		14.35			—		—		16.06
Dow Jones Brookfield Global Infrastructure Index^SM		16.34			—		—		16.00
S&P Global BMI Index		4.36			—		—		10.81
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		15.38			—		—		19.82
Dow Jones Brookfield Global Infrastructure Index^SM		16.34			—		—		20.03
S&P Global BMI Index		4.36			—		—		9.85

⁽¹⁾ The Dow Jones Brookfield Global Infrastructure Index^SM is a float-adjusted market capitalization weighted index that measures the stock performance of companies that exhibit strong infrastructure characteristics. The Index intends to measure all sectors of the infrastructure market. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Standard & Poor's Global BMI Index (S&P Global BMI Index) is a broad market index designed to capture exposure to equities in all countries in the world that meet minimum size and liquidity requirements. As of the date of this Report, there are approximately 11,000 index members representing 25 developed and 23 emerging market countries. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽⁴⁾ Commenced operations on September 20, 2010.

⁽⁵⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Select Global Infrastructure Portfolio

	Shares		Value (000)
Common Stocks (95.7%)
Australia (5.8%)
DUET Group (a)		519,218	$	1,019
Macquarie Atlas Roads Group		134,720		350
Spark Infrastructure Group		103,785		180
Sydney Airport		80,365		307
Transurban Group (a)		250,676		1,752
				3,608
Austria (2.5%)
Flughafen Wien AG (a)		16,425		1,547
Brazil (0.2%)
CCR SA		28,100		161
Canada (11.8%)
Enbridge, Inc.		73,340		3,771
Inter Pipeline Ltd. (a)		23,659		732
Pembina Pipeline Corp. (a)		10,100		368
TransCanada Corp. (a)		51,134		2,513
				7,384
China (5.8%)
Beijing Enterprises Holdings Ltd. (b)		25,500		199
China Everbright International Ltd. (b)		460,000		678
China Merchants Holdings International Co., Ltd. (b)		95,527		320
ENN Energy Holdings Ltd. (b)		92,000		520
Guangdong Investment Ltd. (b)		782,000		1,018
Hopewell Highway Infrastructure Ltd. (b)		1,167,500		586
Jiangsu Expressway Co., Ltd. H Shares (b)		240,000		286
				3,607
France (5.3%)
Eutelsat Communications SA		50,501		1,632
SES SA		27,737		995
Vinci SA		12,420		680
				3,307
Germany (0.2%)
Fraport AG Frankfurt Airport Services Worldwide		2,707		157
Italy (4.3%)
Atlantia SpA		71,665		1,665
Snam SpA		146,809		724
Societa Iniziative Autostradali e Servizi SpA		15,104		145
Terna Rete Elettrica Nazionale SpA		30,273		137
				2,671
Japan (1.4%)
Tokyo Gas Co., Ltd.		158,000		853
Netherlands (3.0%)
Koninklijke Vopak N.V. (a)		36,300		1,880
Spain (1.5%)
Ferrovial SA (a)		23,093		455
Red Electrica Corp., SA		5,190		456
				911
Switzerland (2.1%)
Flughafen Zuerich AG (Registered)		1,933		1,296

	Shares		Value (000)
United Kingdom (7.7%)
National Grid PLC		178,414	$	2,543
Pennon Group PLC		80,840		1,158
Severn Trent PLC		16,540		513
United Utilities Group PLC		41,662		590
				4,804
United States (44.1%)
American Tower Corp. REIT		27,950		2,763
American Water Works Co., Inc.		11,500		613
Atmos Energy Corp.		4,730		264
CenterPoint Energy, Inc.		66,462		1,557
Cheniere Energy, Inc. (c)		11,001		774
Crown Castle International Corp. REIT		33,869		2,666
Enbridge Energy Management LLC (a)(c)		34,131		1,324
ITC Holdings Corp.		37,396		1,512
Kinder Morgan, Inc.		89,590		3,791
NiSource, Inc.		18,210		772
Northeast Utilities		13,530		724
Oneok, Inc.		10,670		531
Pattern Energy Group, Inc.		3,806		94
PG&E Corp.		29,630		1,578
Plains GP Holdings LP, Class A		5,040		129
SBA Communications Corp., Class A (c)		8,249		914
SemGroup Corp., Class A		15,207		1,040
Sempra Energy		16,293		1,814
Spectra Energy Corp.		46,320		1,681
Targa Resources Corp.		4,050		430
Union Pacific Corp.		5,140		612
Williams Cos., Inc. (The)		42,790		1,923
				27,506
Total Common Stocks (Cost $53,598)				59,692
Short-Term Investments (16.1%)
Securities held as Collateral on Loaned Securities (12.1%)
Investment Company (11.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		6,911,966		6,912
	Face Amount (000)
Repurchase Agreement (1.0%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $659; fully collateralized by various U.S. Government obligations; 2.13% - 4.25% due 1/31/21 - 11/15/40; valued at $673)	$	659		659
Total Securities held as Collateral on Loaned Securities (Cost $7,571)				7,571

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Select Global Infrastructure Portfolio

	Shares		Value (000)
Investment Company (4.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $2,497)		2,496,710	$	2,497
Total Short-Term Investments (Cost $10,068)				10,068
Total Investments (111.8%) (Cost $63,666) Including $7,853 of Securities Loaned (d)				69,760
Liabilities in Excess of Other Assets (-11.8%)				(7,342	)
Net Assets (100.0%)			$	62,418

(a) All or a portion of this security was on loan at December 31, 2014.

(b) Security trades on the Hong Kong exchange.

(d) The approximate fair value and percentage of net assets, $24,802,000 and 39.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

REIT Real Estate Investment Trust.

Portfolio Composition*

Classification	Percentage of Total Investments
Oil & Gas Storage & Transportation		41.9	%
Communications		14.4
Electricity Transmission & Distribution		11.5
Other**		10.6
Toll Roads		9.0
Water		7.3
Airports		5.3
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Select Global Infrastructure Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $54,257)	$	60,351
Investment in Security of Affiliated Issuer, at Value (Cost $9,409)		9,409
Total Investments in Securities, at Value (Cost $63,666)		69,760
Foreign Currency, at Value (Cost $35)		35
Cash		697
Receivable for Investments Sold		873
Dividends Receivable		168
Receivable for Portfolio Shares Sold		161
Tax Reclaim Receivable		5
Receivable from Affiliate		—	@
Other Assets		29
Total Assets		71,728
Liabilities:
Collateral on Securities Loaned, at Value		8,268
Payable for Portfolio Shares Redeemed		552
Payable for Investments Purchased		308
Payable for Advisory Fees		101
Payable for Professional Fees		43
Payable for Custodian Fees		17
Payable for Shareholder Services Fees — Class A		5
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Administration Fees		4
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		3
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		4
Total Liabilities		9,310
Net Assets	$	62,418
Net Assets Consist Of:
Paid-in-Capital	$	55,265
Accumulated Undistributed Net Investment Income		9
Accumulated Net Realized Gain		1,051
Unrealized Appreciation (Depreciation) on:
Investments		6,094
Foreign Currency Translations		(1	)
Net Assets	$	62,418

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Select Global Infrastructure Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	40,477
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		2,626,696
Net Asset Value, Offering and Redemption Price Per Share	$	15.41
CLASS A:
Net Assets	$	20,815
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,353,415
Net Asset Value, Redemption Price Per Share	$	15.38
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.85
Maximum Offering Price Per Share	$	16.23
CLASS L:
Net Assets	$	1,115
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		72,701
Net Asset Value, Offering and Redemption Price Per Share	$	15.34
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		728
Net Asset Value, Offering and Redemption Price Per Share	$	15.41
⁽¹⁾ Including: Securities on Loan, at Value:	$	7,853

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Select Global Infrastructure Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $110 of Foreign Taxes Withheld)	$	1,378
Income from Securities Loaned — Net		32
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		1,411
Expenses:
Advisory Fees (Note B)		411
Professional Fees		96
Custodian Fees (Note F)		77
Administration Fees (Note C)		39
Shareholder Services Fees — Class A (Note D)		32
Distribution and Shareholder Services Fees — Class L (Note D)		6
Registration Fees		29
Shareholder Reporting Fees		15
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		10
Sub Transfer Agency Fees — Class L		—	@
Transfer Agency Fees (Note E)		—	@
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		7
Directors' Fees and Expenses		2
Other Expenses		12
Total Expenses		744
Waiver of Advisory Fees (Note B)		(164	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Net Expenses		575
Net Investment Income		836
Realized Gain (Loss):
Investments Sold		3,563
Foreign Currency Transactions		(21	)
Net Realized Gain		3,542
Change in Unrealized Appreciation (Depreciation):
Investments		1,323
Foreign Currency Translations		(2	)
Net Change in Unrealized Appreciation (Depreciation)		1,321
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		4,863
Net Increase in Net Assets Resulting from Operations	$	5,699

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Select Global Infrastructure Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	836		$	437
Net Realized Gain		3,542			1,599
Net Change in Unrealized Appreciation (Depreciation)		1,321			1,899
Net Increase in Net Assets Resulting from Operations		5,699			3,935
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(542	)		(455	)
Net Realized Gain		(1,898	)		(1,150	)
*Class A:**
Net Investment Income		(251	)		(55	)
Net Realized Gain		(965	)		(127	)
*Class H:**
Net Investment Income		—			(—	@)***
Net Realized Gain		—			(31	)***
Class L:
Net Investment Income		(6	)		(6	)
Net Realized Gain		(46	)		(25	)
Class IS:
Net Investment Income		(—	@)		(—	@)**
Net Realized Gain		(1	)		(—	@)**
Total Distributions		(3,709	)		(1,849	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		13,096			11,506
Distributions Reinvested		1,454			706
Redeemed		(2,618	)		(3,326	)
*Class A:**
Subscribed		24,454			1,264
Distributions Reinvested		1,197			166
Conversion from Class H		—			3,280
Redeemed		(8,386	)		(1,330	)
*Class H:**
Subscribed		—			2,166	***
Distributions Reinvested		—			30	***
Conversion to Class A		—			(3,280	)***
Redeemed		—			(191	)***
Class L:
Subscribed		723			389
Distributions Reinvested		44			23
Redeemed		(253	)		—
Class IS:
Subscribed		—			10	**
Net Increase in Net Assets Resulting from Capital Share Transactions		29,711			11,413
Total Increase in Net Assets		31,701			13,499
Net Assets:
Beginning of Period		30,717			17,218
End of Period (Including Accumulated Undistributed Net Investment and Distributions in Excess of Net Investment Income of $9 and $(1), respectively.	$	62,418		$	30,717

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Select Global Infrastructure Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		845			820
Shares Issued on Distributions Reinvested		98			52
Shares Redeemed		(170	)		(236	)
Net Increase in Class I Shares Outstanding		773			636
*Class A:**
Shares Subscribed		1,547			89
Shares Issued on Distributions Reinvested		81			12
Conversion from Class H		—			242
Shares Redeemed		(535	)		(93	)
Net Increase in Class A Shares Outstanding		1,093			250
*Class H:**
Shares Subscribed		—			156	***
Shares Issued on Distributions Reinvested		—			2	***
Conversion to Class A		—			(242	)***
Shares Redeemed		—			(13	)***
Net Decrease in Class H Shares Outstanding		—			(97	)
Class L:
Shares Subscribed		46			28
Shares Issued on Distributions Reinvested		3			2
Shares Redeemed		(17	)		—
Net Increase in Class L Shares Outstanding		32			30
Class IS:
Shares Subscribed		—			1	**

@ Amount is less than $500.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period September 13, 2013 through December 31, 2013.

*** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Select Global Infrastructure Portfolio

	Class I
	Year Ended December 31,												Period from September 20, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	14.26		$	12.91		$	11.50		$	10.40		$	10.00
Income from Investment Operations:
Net Investment Income†		0.28			0.26			0.27			0.23			0.08
Net Realized and Unrealized Gain		1.87			2.00			1.82			1.42			0.40
Total from Investment Operations		2.15			2.26			2.09			1.65			0.48
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.25	)		(0.26	)		(0.22	)		(0.08	)
Net Realized Gain		(0.78	)		(0.66	)		(0.42	)		(0.33	)		—
Total Distributions		(1.00	)		(0.91	)		(0.68	)		(0.55	)		(0.08	)
Net Asset Value, End of Period	$	15.41		$	14.26		$	12.91		$	11.50		$	10.40
Total Return++		15.38	%		17.91	%		18.21	%		15.95	%		4.94	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	40,477		$	26,428		$	15,707		$	12,589		$	10,086
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.08	%+		1.12	%+		1.15	%+		1.15	%+		1.14	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.82	%+		1.87	%+		2.18	%+		2.09	%+		2.71	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		40	%		30	%		33	%		51	%		6	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.42	%		2.04	%		2.39	%		2.93	%		3.61	%+*
Net Investment Income to Average Net Assets		1.48	%		0.95	%		0.94	%		0.31	%		0.24	%+*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Select Global Infrastructure Portfolio

	Class A@
	Year Ended December 31,												Period from September 20, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	14.25		$	12.90		$	11.50		$	10.40		$	10.00
Income from Investment Operations:
Net Investment Income†		0.24			0.26			0.24			0.21			0.07
Net Realized and Unrealized Gain		1.86			1.97			1.80			1.41			0.41
Total from Investment Operations		2.10			2.23			2.04			1.62			0.48
Distributions from and/or in Excess of:
Net Investment Income		(0.19	)		(0.22	)		(0.22	)		(0.19	)		(0.08	)
Net Realized Gain		(0.78	)		(0.66	)		(0.42	)		(0.33	)		—
Total Distributions		(0.97	)		(0.88	)		(0.64	)		(0.52	)		(0.08	)
Net Asset Value, End of Period	$	15.38		$	14.25		$	12.90		$	11.50		$	10.40
Total Return++		14.94	%		17.69	%		17.85	%		15.67	%		4.86	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20,815		$	3,706		$	129		$	115		$	104
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.42	%+		1.37	%+^^		1.40	%+		1.40	%+		1.39	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.53	%+		1.81	%+		1.93	%+		1.84	%+		2.46	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		40	%		30	%		33	%		51	%		6	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.76	%		2.43	%		2.64	%		3.18	%		3.86	%+*
Net Investment Income (Loss) to Average Net Assets		1.19	%		0.75	%		0.69	%		0.06	%		(0.01	)%+*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.50% for Class A Shares. Prior to September 16, 2013, the maximum ratio was 1.40% for Class A Shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Select Global Infrastructure Portfolio

	Class L
	Year Ended December 31,												Period from September 20, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	14.22		$	12.90		$	11.50		$	10.40		$	10.00
Income from Investment Operations:
Net Investment Income†		0.14			0.16			0.18			0.15			0.06
Net Realized and Unrealized Gain		1.87			1.98			1.80			1.42			0.40
Total from Investment Operations		2.01			2.14			1.98			1.57			0.46
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.16	)		(0.16	)		(0.14	)		(0.06	)
Net Realized Gain		(0.78	)		(0.66	)		(0.42	)		(0.33	)		—
Total Distributions		(0.89	)		(0.82	)		(0.58	)		(0.47	)		(0.06	)
Net Asset Value, End of Period	$	15.34		$	14.22		$	12.90		$	11.50		$	10.40
Total Return++		14.35	%		16.98	%		17.31	%		15.12	%		4.72	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,115		$	573		$	129		$	115		$	104
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.00	%+		1.93	%+^^		1.90	%+		1.90	%+		1.89	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		0.91	%+		1.16	%+		1.43	%+		1.34	%+		1.96	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		40	%		30	%		33	%		51	%		6	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.41	%		2.86	%		3.14	%		3.68	%		4.36	%+*
Net Investment Income (Loss) to Average Net Assets		0.50	%		0.23	%		0.19	%		(0.44	)%		(0.51	)%+*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Select Global Infrastructure Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	14.26		$	13.73
Income from Investment Operations:
Net Investment Income†		0.28			0.09
Net Realized and Unrealized Gain		1.87			1.20
Total from Investment Operations		2.15			1.29
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.25	)
Net Realized Gain		(0.78	)		(0.51	)
Total Distributions		(1.00	)		(0.76	)
Net Asset Value, End of Period	$	15.41		$	14.26
Total Return++		15.38	%		9.60	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.08	%+		1.07	%+^^*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		1.79	%+		2.13	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		40	%		30	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation
Expenses to Average Net Assets		18.56	%		7.27	%*
Net Investment Loss to Average Net Assets		(15.69	)%		(4.07	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.08% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Select Global Infrastructure Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek to provide both capital appreciation and income by investing primarily in equity securities issued by companies located throughout the world that are engaged in the infrastructure business. Using internal proprietary research, the Adviser seeks to identify public infrastructure companies that are believed to offer the best value relative to their underlying assets and growth prospects. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Airports	$	—	$	3,307	$	—	$	3,307
Communications		6,343		2,627		—		8,970
Diversified		1,557		1,474		—		3,031
Oil & Gas Storage & Transportation		21,857		4,176		—		26,033
Ports		—		320		—		320
Railroads		612		—		—		612
Toll Roads		—		5,625		—		5,625
Electricity Transmission & Distribution		3,814		3,316		—		7,130
PPA-Contracted Renewables		94		—		—		94
Water		613		3,957		—		4,570
Total Common Stocks		34,890		24,802		—		59,692
Short-Term Investments
Investment Company		9,409		—		—		9,409
Repurchase Agreement		—		659		—		659
Total Short-Term Investments		9,409		659		—		10,068
Total Assets	$	44,299	$	25,461	$	—	$	69,760

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $22,859,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	7,853	(a)	$	—	$	(7,853	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Portfolio received cash collateral of approximately $8,268,000, of which approximately $7,571,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $697,000, which is not reflected in the Portfolio of Investments.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the average daily net assets of the Portfolio.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.15% for Class I shares, 1.50% for Class A shares, 2.00% for Class L shares and 1.08% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $164,000 of advisory fees were waived and approximately $3,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $44,323,000 and $18,529,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	5,964			$	35,393			$	31,948			$	1			$	9,409

Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	941	$	2,768	$	573	$	1,276

Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	(27	)		$	27			$	—

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	9			$	1,120

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $63,726,000. The aggregate gross unrealized appreciation is approximately $6,319,000 and the aggregate gross unrealized depreciation is approximately $285,000 resulting in net unrealized appreciation of approximately $6,034,000.

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	—			$	8

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 28% and 60%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Select Global Infrastructure Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Select Global Infrastructure Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Select Global Infrastructure Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during the taxable year ended December 31, 2014. For corporate shareholders, 43.7% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $2,768,000 as a long-term capital gain distribution.

The Portfolio intends to pass through foreign tax credits of approximately $36,000, and has derived net income from sources within foreign countries amounting to approximately $880,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFISGIANN
1113920 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Advantage Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					8
Statement of Operations					10
Statements of Changes in Net Assets					11
Financial Highlights					13
Notes to Financial Statements					16
Report of Independent Registered Public Accounting Firm					24
Federal Tax Notice					25
U.S. Privacy Policy					26
Director and Officer Information					29

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Advantage Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Advantage Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Advantage Portfolio Class I	$	1,000.00	$	998.00	$	1,018.65	$	6.55	$	6.61		1.30	%
Global Advantage Portfolio Class A		1,000.00		996.50		1,016.89		8.30		8.39		1.65
Global Advantage Portfolio Class L		1,000.00		994.10		1,014.37		10.81		10.92		2.15

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Advantage Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 0.83%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI All Country World Index (the "Index"), which returned 4.16%.

Factors Affecting Performance

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• Stock selection in the industrials sector hurt relative results. Within the sector, a position in a U.K.-based multinational inspection, product testing and certification company detracted the most.

• The health care sector lagged, due to an underweight position and unfavorable stock selection. The Portfolio's smaller exposure to strong-performing groups such as biotechnology and pharmaceuticals was detrimental to relative results.

• With no energy or materials stocks held during the period, the Portfolio benefited from avoiding the two weakest-performing sectors in the Index, both of which had negative returns during the period.

• The Portfolio's overweight in the information technology sector contributed to relative gains. A holding in a leading social media platform was the top contributor within the sector and in the overall Portfolio.

Management Strategies

• The long-term investment horizon and conviction-weighted investment approach embraced by the team since 1998 can result in periods of performance deviation from the benchmark and

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Advantage Portfolio

peers, as was the case during this reporting period. Our team continues to focus on bottom-up stock selection and the long-term outlook for companies owned in the Portfolio; accordingly, we have had very little turnover in the Portfolio to date, as our ongoing work reaffirms our assessment of quality and competitive advantage in the names we own.

* Minimum Investment for Class I shares

** Commenced Operations on December 28, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the MSCI All Country World Index⁽¹⁾ and the Lipper Global Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		0.83	%		—		—		12.68	%
MSCI All Country World Index		4.16			—		—		8.46
Lipper Global Multi-Cap Growth Funds Index		2.86			—		—		7.49
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		0.46			—		—		12.36
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–4.80			—		—		10.87
MSCI All Country World Index		4.16			—		—		8.46
Lipper Global Multi-Cap Growth Funds Index		2.86			—		—		7.49
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		–0.07			—		—		11.79
MSCI All Country World Index		4.16			—		—		8.46
Lipper Global Multi-Cap Growth Funds Index		2.86			—		—		7.49

⁽¹⁾ The MSCI All Country World Index (ACWI) is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. It is not possible to invest directly in an index. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽⁴⁾ Commenced operations on December 28, 2010.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date or initial offering of the respective share class of the Portfolio, not the inception of the Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Advantage Portfolio

	Shares		Value (000)
Common Stocks (97.1%)
Brazil (1.5%)
Qualicorp SA (a)		6,083	$	63
Canada (5.6%)
Aimia, Inc.		6,191		78
Fairfax Financial Holdings Ltd.		140		73
Valeant Pharmaceuticals International, Inc. (a)		642		92
				243
China (6.9%)
Alibaba Group Holding Ltd. ADR (a)		1,666		173
Baidu, Inc. ADR (a)		274		62
JD.com, Inc. ADR (a)		2,614		61
				296
France (9.8%)
Christian Dior SA		1,082		185
Edenred		4,054		112
Eurazeo SA		1,497		105
Hermes International		59		21
				423
Hong Kong (2.5%)
L'Occitane International SA		42,250		106
Italy (3.2%)
Brunello Cucinelli SpA		1,651		37
Moncler SpA		7,500		101
				138
Japan (1.1%)
FANUC Corp.		300		50
Netherlands (2.8%)
Koninklijke Philips N.V.		2,118		62
OCI N.V. (a)		1,739		60
				122
Nigeria (0.8%)
Guinness Nigeria PLC		36,810		34
Singapore (3.0%)
Jardine Matheson Holdings Ltd.		2,102		128
South Africa (3.9%)
Naspers Ltd., Class N		1,307		168
Switzerland (4.3%)
Nestle SA ADR		2,554		186
United Kingdom (6.2%)
Diageo PLC ADR		887		101
Intertek Group PLC		871		32
Manchester United PLC, Class A (a)		5,900		94
Poundland Group PLC (a)		7,958		40
				267

	Shares		Value (000)
United States (45.5%)
Amazon.com, Inc. (a)		856	$	266
Apple, Inc.		809		89
Berkshire Hathaway, Inc., Class B (a)		645		97
Costco Wholesale Corp.		534		76
Facebook, Inc., Class A (a)		3,820		298
Google, Inc., Class A (a)		161		86
Google, Inc., Class C (a)		276		145
Keurig Green Mountain, Inc.		592		78
LinkedIn Corp., Class A (a)		423		97
Mastercard, Inc., Class A		810		70
McGraw Hill Financial, Inc.		705		63
Mead Johnson Nutrition Co.		1,233		124
PepsiCo, Inc.		656		62
Progressive Corp. (The)		2,347		63
Starbucks Corp.		1,029		84
Thermo Fisher Scientific, Inc.		670		84
Twitter, Inc. (a)		2,817		101
Visa, Inc., Class A		288		76
				1,959
Total Common Stocks (Cost $3,618)				4,183
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		840,042		1
USD/CNY November 2015 @ CNY 6.65		739,759		4
Total Call Options Purchased (Cost $5)				5
	Shares
Short-Term Investment (2.5%)
Investment Company (2.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $107)		107,314		107
Total Investments (99.7%) (Cost $3,730) (b)				4,295
Other Assets in Excess of Liabilities (0.3%)				14
Net Assets (100.0%)			$	4,309

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $1,270,000 and 29.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

CNY Chinese Yuan Renminbi

USD United States Dollar

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Global Advantage Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Other*		38.9	%
Internet Software & Services		22.4
Food Products		9.0
Textiles, Apparel & Luxury Goods		8.0
Media		7.9
Internet & Catalog Retail		7.6
Diversified Financial Services		6.2
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Advantage Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $3,623)	$	4,188
Investment in Security of Affiliated Issuer, at Value (Cost $107)		107
Total Investments in Securities, at Value (Cost $3,730)		4,295
Foreign Currency, at Value (Cost $3)		3
Due from Adviser		45
Receivable for Investments Sold		6
Dividends Receivable		1
Tax Reclaim Receivable		1
Receivable from Affiliate		—	@
Other Assets		25
Total Assets		4,376
Liabilities:
Payable for Professional Fees		50
Payable for Custodian Fees		5
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Investments Purchased		—	@
Payable for Administration Fees		—	@
Other Liabilities		9
Total Liabilities		67
Net Assets	$	4,309
Net Assets Consist Of:
Paid-in-Capital	$	3,661
Accumulated Undistributed of Net Investment Income		8
Accumulated Net Realized Gain		75
Unrealized Appreciation (Depreciation) on:
Investments		565
Foreign Currency Translations		(—	@)
Net Assets	$	4,309

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	3,181
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		249,592
Net Asset Value, Offering and Redemption Price Per Share	$	12.74
CLASS A:
Net Assets	$	790
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		62,241
Net Asset Value, Redemption Price Per Share	$	12.70
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.70
Maximum Offering Price Per Share	$	13.40
CLASS L:
Net Assets	$	338
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		26,880
Net Asset Value, Offering and Redemption Price Per Share	$	12.56

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Advantage Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $8 of Foreign Taxes Withheld)	$	75
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		75
Expenses:
Professional Fees		110
Advisory Fees (Note B)		40
Custodian Fees (Note F)		26
Registration Fees		16
Shareholder Reporting Fees		15
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Pricing Fees		6
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class L (Note D)		2
Administration Fees (Note C)		4
Directors' Fees and Expenses		1
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees		—	@
Other Expenses		15
Total Expenses		244
Expenses Reimbursed by Adviser (Note B)		(137	)
Waiver of Advisory Fees (Note B)		(40	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		62
Net Investment Income		13
Realized Gain (Loss):
Investments Sold		273
Foreign Currency Transactions		(1	)
Net Realized Gain		272
Change in Unrealized Appreciation (Depreciation):
Investments		(258	)
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(258	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		14
Net Increase in Net Assets Resulting from Operations	$	27

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Advantage Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	13		$	5
Net Realized Gain		272			321
Net Change in Unrealized Appreciation (Depreciation)		(258	)		523
Net Increase in Net Assets Resulting from Operations		27			849
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(2	)		(15	)
Net Realized Gain		(221	)		(203	)
*Class A:**
Net Investment Income		(1	)		(1	)
Net Realized Gain		(58	)		(27	)
*Class H:**
Net Realized Gain		—			(5	)**
Class L:
Net Investment Income		(—	@)		(—	@)
Net Realized Gain		(24	)		(18	)
Total Distributions		(306	)		(269	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		1,143			1,881
Distributions Reinvested		176			162
Redeemed		(805	)		(749	)
*Class A:**
Subscribed		500			248
Distributions Reinvested		41			9
Conversion from Class H		—			266
Redeemed		(378	)		—
*Class H:**
Distributions Reinvested		—			3	**
Conversion to Class A		—			(266	)**
Redeemed		—			(994	)**
Class L:
Subscribed		108			115
Distributions Reinvested		15			7
Redeemed		(15	)		(8	)
Net Increase in Net Assets Resulting from Capital Share Transactions		785			674
Total Increase in Net Assets		506			1,254
Net Assets:
Beginning of Period		3,803			2,549
End of Period (Including Accumulated Undistributed Net Investment Income and Distributions in Excess of Net Investment Income of $8 and $(—@), respectively.	$	4,309		$	3,803

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		84			157
Shares Issued on Distributions Reinvested		14			13
Shares Redeemed		(60	)		(58	)
Net Increase in Class I Shares Outstanding		38			112
*Class A:**
Shares Subscribed		37			18
Shares Issued on Distributions Reinvested		3			1
Conversion from Class H		—			21
Shares Redeemed		(28	)		—
Net Increase in Class A Shares Outstanding		12			40
*Class H:**
Shares Issued on Distributions Reinvested		—			—	@@**
Conversion to Class A		—			(21	)**
Shares Redeemed		—			(84	)**
Net Decrease in Class H Shares Outstanding		—			(105	)
Class L:
Shares Subscribed		8			9
Shares Issued on Distributions Reinvested		1			1
Shares Redeemed		(1	)		(1	)
Net Increase in Class L Shares Outstanding		8			9

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class H and P shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Advantage Portfolio

	Class I
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.57		$	11.37		$	9.97		$	10.01		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.05			0.04			0.16			0.06			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		0.04			3.27			2.12			(0.03	)		0.01
Total from Investment Operations		0.09			3.31			2.28			0.03			0.01
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.08	)		(0.12	)		(0.07	)		—
Net Realized Gain		(0.91	)		(1.03	)		(0.76	)		—			—
Total Distributions		(0.92	)		(1.11	)		(0.88	)		(0.07	)		—
Net Asset Value, End of Period	$	12.74		$	13.57		$	11.37		$	9.97		$	10.01
Total Return++		0.83	%		29.71	%		22.83	%		0.34	%		0.10	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,181		$	2,868		$	1,129		$	1,603		$	701
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.30	%+		1.29	%+		1.30	%+		1.30	%+		1.30	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.40	%+		0.29	%+		1.39	%+		0.57	%+		(1.10	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		46	%		57	%		63	%		42	%		0	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		5.31	%		8.07	%		7.28	%		7.31	%		245.42	%*
Net Investment Loss to Average Net Assets		(3.61	)%		(6.49	)%		(4.59	)%		(5.44	)%		(245.22	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Advantage Portfolio

	Class A@
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.57		$	11.36		$	9.97		$	10.01		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.01			(0.04	)		0.13			0.03			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		0.04			3.31			2.11			(0.02	)		0.01
Total from Investment Operations		0.05			3.27			2.24			0.01			0.01
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.03	)		(0.09	)		(0.05	)		—
Net Realized Gain		(0.91	)		(1.03	)		(0.76	)		—			—
Total Distributions		(0.92	)		(1.06	)		(0.85	)		(0.05	)		—
Net Asset Value, End of Period	$	12.70		$	13.57		$	11.36		$	9.97		$	10.01
Total Return++		0.46	%		29.48	%		22.44	%		0.07	%		0.10	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	790		$	681		$	114		$	100		$	100
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.65	%+		1.60	%+^^		1.55	%+		1.55	%+		1.55	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.05	%+		(0.35	)%+		1.14	%+		0.32	%+		(1.35	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		46	%		57	%		63	%		42	%		0	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		5.79	%		8.43	%		7.53	%		7.56	%		245.67	%*
Net Investment Loss to Average Net Assets		(4.09	)%		(7.18	)%		(4.84	)%		(5.69	)%		(245.47	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.55% for Class A shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Advantage Portfolio

	Class L
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.50		$	11.35		$	9.96		$	10.01		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.06	)		(0.09	)		0.07			(0.02	)		(0.00	)‡
Net Realized and Unrealized Gain (Loss)		0.04			3.28			2.11			(0.02	)		0.01
Total from Investment Operations		(0.02	)		3.19			2.18			(0.04	)		0.01
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.01	)		(0.03	)		(0.01	)		—
Net Realized Gain		(0.91	)		(1.03	)		(0.76	)		—			—
Total Distributions		(0.92	)		(1.04	)		(0.79	)		(0.01	)		—
Net Asset Value, End of Period	$	12.56		$	13.50		$	11.35		$	9.96		$	10.01
Total Return++		(0.07	)%		28.78	%		21.89	%		(0.44	)%		0.10	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	338		$	254		$	113		$	100		$	100
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.15	%+		2.09	%+^^		2.05	%+		2.05	%+		2.05	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.45	)%+		(0.71	)%+		0.64	%+		(0.18	)%+		(1.85	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		46	%		57	%		63	%		42	%		0	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		6.55	%		9.07	%		8.03	%		8.06	%		246.17	%*
Net Investment Loss to Average Net Assets		(4.85	)%		(7.69	)%		(5.34	)%		(6.19	)%		(245.97	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.15% for Class L shares. Prior to September 16, 2013, the maximum ratio was 2.05% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Advantage Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established companies located throughout the world, with capitalizations within the range of companies included in the MSCI All Country World Index. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment

Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	197	$	—	$	—	$	197
Commercial Services & Supplies		—		112		—		112
Construction & Engineering		—		60		—		60
Diversified Financial Services		160		105		—		265
Food & Staples Retailing		76		—		—		76
Food Products		388		—		—		388
Health Care Providers & Services		—		63		—		63
Hotels, Restaurants & Leisure		84		—		—		84
Industrial Conglomerates		—		190		—		190
Information Technology Services		146		—		—		146
Insurance		136		—		—		136
Internet & Catalog Retail		327		—		—		327
Internet Software & Services		962		—		—		962
Life Sciences Tools & Services		84		—		—		84
Machinery		—		50		—		50
Media		172		168		—		340
Multi-line Retail		—		40		—		40
Pharmaceuticals		92		—		—		92
Professional Services		—		32		—		32

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Specialty Retail	$	—	$	106	$	—	$	106
Tech Hardware, Storage & Peripherals		89		—		—		89
Textiles, Apparel & Luxury Goods		—		344		—		344
Total Common Stocks		2,913		1,270		—		4,183
Call Options Purchased		—		5		—		5
Short-Term Investment
Investment Company		107		—		—		107
Total Assets	$	3,020	$	1,275	$	—	$	4,295

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $1,023,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Options: In respect to options, the Portfolio is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its

investment objectives. If the Portfolio buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument, at an agreed-upon price typically in exchange for a premium paid by the Portfolio. The Portfolio may purchase and/or sell put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Portfolio bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(3	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	1	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	5	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	5	$	—	$	—	$	5

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					1,547,000

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

semiannually. Net realized capital gains, if any, are distributed at least annually.

First $1 billion				Over $1 billion
	0.90	%			0.85	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.30% for Class I shares, 1.65% for Class A shares and 2.15% for Class L shares. Effective January 23, 2015, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses will not exceed 1.10% for Class I shares, 1.45% for Class A shares and 1.95% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they

deem such action is appropriate. For the year ended December 31, 2014, approximately $40,000 of advisory fees were waived and approximately $142,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $2,560,000 and $1,975,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	288			$	2,474			$	2,655			$	—	@		$	107

@ Amount is less than $500.

and are accrued based on the value of investments denominated in such currency.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	58	$	248	$	107	$	162

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	8			$	(8	)		$	—

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	7			$	86

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $3,741,000. The aggregate gross unrealized appreciation is approximately $665,000 and the aggregate gross unrealized depreciation is approximately $111,000 resulting in net unrealized appreciation of approximately $554,000.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Advantage Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Advantage Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Advantage Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 6.7% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $248,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGAANN
1110236 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Discovery Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					8
Statement of Operations					10
Statements of Changes in Net Assets					11
Financial Highlights					13
Notes to Financial Statements					16
Report of Independent Registered Public Accounting Firm					26
Federal Tax Notice					27
U.S. Privacy Policy					28
Director and Officer Information					31

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Discovery Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Discovery Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Discovery Portfolio Class I	$	1,000.00	$	949.90	$	1,018.45	$	6.59	$	6.82		1.34	%
Global Discovery Portfolio Class A		1,000.00		948.40		1,016.53		8.45		8.74		1.72
Global Discovery Portfolio Class L		1,000.00		945.60		1,014.17		10.74		11.12		2.19

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Discovery Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -1.96%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI All Country World Index (the "Index"), which returned 4.16%.

Factors Affecting Performance

importing countries may see their disposable incomes boosted.

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• The largest detractor from relative performance was stock selection in the consumer staples sector. A U.S. grocery store chain operating in Wisconsin and Illinois was the most detrimental holding in the sector.

• Stock selection in the industrials sector hampered relative returns, primarily due to a U.K.-based manufacturer of rock drilling tools used in the construction, natural resource, and seismic industries.

• Relative underperformance also came from stock selection in the financials sector. The overall Portfolio's biggest detractor was a holding in a Brazilian real estate developer.

• Positive contributions to relative performance came from the health care sector. The Portfolio's position in a surgical robotics systems maker, which included exposure to call options as well as the underlying stock, performed well after the company saw a surprising increase in procedure growth and shipments of a recently updated product.

• The Portfolio also benefited from no exposure to the energy and telecommunication services sectors, two of the worst-performing sectors in the Index during the period.

Management Strategies

• There were no changes to our bottom-up investment process during the period. We continued to look for franchises with sustainable competitive advantages. We typically favor companies with strong cash generation, attractive returns on capital, hard-to-replicate assets and a favorable risk/reward. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Discovery Portfolio

Our team continues to focus on bottom-up stock selection and the long-term outlook for companies owned in the Portfolio; accordingly, we have had very little turnover in the Portfolio to date, as our ongoing work reaffirms our assessment of quality and competitive advantage in the names we own.

* Minimum Investment for Class I shares

** Commenced Operations on December 28, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the MSCI All Country World Index⁽¹⁾ and the Lipper Global Small/Mid-Cap Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–1.96	%		—		—		13.66	%
MSCI All Country World Index		4.16			—		—		8.46
Lipper Global Small/Mid-Cap Funds Index		–0.38			—		—		6.19
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		–2.25			—		—		13.37
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–7.39			—		—		11.86
MSCI All Country World Index		4.16			—		—		8.46
Lipper Global Small/Mid-Cap Funds Index		–0.38			—		—		6.19
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		–2.81			—		—		12.78
MSCI All Country World Index		4.16			—		—		8.46
Lipper Global Small/Mid-Cap Funds Index		–0.38			—		—		6.19

⁽²⁾ The Lipper Global Small/Mid-Cap Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Small/Mid-Cap Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Global Small/Mid-Cap Funds classification.

⁽⁴⁾ Commenced operations on December 28, 2010.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Discovery Portfolio

	Shares		Value (000)
Common Stocks (77.3%)
Brazil (3.1%)
JHSF Participacoes SA		206,786	$	181
Ouro Fino Saude Animal Participacoes SA (a)		9,735		112
				293
Canada (1.7%)
Second Cup Ltd. (The)		62,739		164
China (2.0%)
Jumei International Holding Ltd. ADR (a)		14,000		191
France (21.8%)
Christian Dior SA		6,102		1,042
Edenred		16,120		448
Eurazeo SA		6,860		479
Hermes International		345		123
				2,092
Germany (2.2%)
Zalando SE (a)(b)(c)		6,761		208
Greece (1.4%)
Titan Cement Co., SA (Preference)		13,142		137
Hong Kong (4.6%)
L'Occitane International SA		177,250		446
Ireland (1.2%)
Mincon Group PLC		159,144		116
Italy (7.4%)
Moncler SpA		17,195		230
Tamburi Investment Partners SpA		152,490		484
				714
Netherlands (6.1%)
Koninklijke Philips N.V.		20,337		590
Sweden (1.9%)
Investment AB Kinnevik		5,535		180
United Kingdom (7.0%)
Daily Mail & General Trust PLC		23,390		300
Just Eat PLC (a)		78,674		375
				675
United States (16.9%)
Castlight Health, Inc., Class B (a)		2,714		32
Dropbox, Inc. (a)(d)(e)(f) (acquisition cost — $25; acquired 5/1/12)		2,743		52
Fairway Group Holdings Corp. (a)(c)		15,720		50
Fox Factory Holding Corp. (a)		22,505		365
New Relic, Inc. (a)		466		16
Pandora Media, Inc. (a)		5,006		89
Progressive Corp. (The)		17,008		459
Rayonier Advanced Materials		5,558		124
Solera Holdings, Inc.		7,239		371
Workday, Inc., Class A (a)		482		39
zulily, Inc., Class A (a)(c)		1,189		28
				1,625
Total Common Stocks (Cost $8,004)				7,431

	Shares		Value (000)
Preferred Stocks (5.5%)
India (2.4%)
Flipkart Online Services Pvt Ltd. Series D (a)(d)(e)(f) (acquisition cost — $44; acquired 10/4/13)		1,910	$	229
United States (3.1%)
Airbnb, Inc. Series D (a)(d)(e)(f) (acquisition cost — $78; acquired 4/16/14)		1,917		97
Blue Bottle Coffee, Inc. Series B (a)(d)(e)(f) (acquisition cost — $56; acquirred 1/24/14)		3,945		59
DOMO, Inc. (a)(d)(e)(f) (acquisition cost — $37; acquired 1/31/14 — 2/7/14)		9,082		35
Lookout, Inc. Series F (a)(d)(e)(f) (acquisition cost — $73; acquired 06/17/14)		6,374		65
Palantir Technologies, Inc. Series G (a)(d)(e)(f) (acquisition cost — $9; acquired 7/19/12)		2,935		23
Palantir Technologies, Inc. Series H (a)(d)(e)(f)
(acquisition cost — $6; acquired 10/25/13)		1,572		13
Palantir Technologies, Inc. Series H1 (a)(d)(e)(f) (acquisition cost — $6; acquired 10/25/13)		1,572		13
				305
Total Preferred Stocks (Cost $309)				534
Convertible Preferred Stock (0.1%)
United States (0.1%)
Dropbox, Inc. Series A (a)(d)(e)(f) (acquisition cost — $3; acquired 5/25/12) (Cost $3)		277		5
	Notional Amount
Call Option Purchased (7.2%)
United States (7.2%)
Intuitive Surgical, Inc. January 2016 @ $300 (Cost $332)		29		693
	Shares
Short-Term Investments (12.7%)
Securities held as Collateral on Loaned Securities (2.7%)
Investment Company (2.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		237,532		238
	Face Amount (000)
Repurchase Agreement (0.2%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $22; fully collateralized by various U.S. Government obligations; 2.13% — 4.25% due 1/31/21 — 11/15/40; valued at $23)	$	22		22
Total Securities held as Collateral on Loaned Securities (Cost $260)				260

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Global Discovery Portfolio

	Shares		Value (000)
Investment Company (10.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $960)		960,494	$	960
Total Short-Term Investments (Cost $1,220)				1,220
Total Investments (102.8%) (Cost $9,868) Including $276 of Securities Loaned (g)				9,883
Liabilities in Excess of Other Assets (-2.8%)				(271	)
Net Assets (100.0%)			$	9,612

(a) Non-income producing security.

(b) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d) Security has been deemed illiquid at December 31, 2014.

(f) At December 31, 2014, the Portfolio held fair valued securities valued at approximately $591,000, representing 6.1% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(g) The approximate fair value and percentage of net assets, $5,335,000 and 55.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		31.1	%
Textiles, Apparel & Luxury Goods		14.5
Short-Term Investment		10.0
Internet & Catalog Retail		7.8
Call Options Purchased		7.2
Diversified Financial Services		6.9
Industrial Conglomerates		6.1
Software		5.8
Internet Software & Services		5.6
Capital Markets		5.0
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Discovery Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $8,670)	$	8,685
Investment in Security of Affiliated Issuer, at Value (Cost $1,198)		1,198
Total Investments in Securities, at Value (Cost $9,868)		9,883
Foreign Currency, at Value (Cost $7)		7
Cash		24
Due from Adviser		13
Dividends Receivable		5
Receivable for Portfolio Shares Sold		5
Tax Reclaim Receivable		4
Receivable from Affiliate		—	@
Other Assets		29
Total Assets		9,970
Liabilities:
Collateral on Securities Loaned, at Value		284
Payable for Professional Fees		46
Payable for Portfolio Shares Redeemed		10
Payable for Custodian Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		10
Total Liabilities		358
Net Assets	$	9,612
Net Assets Consist Of:
Paid-in-Capital	$	9,914
Distributions in Excess of Net Investment Income		(82	)
Distributions in Excess of Net Realized Gain		(235	)
Unrealized Appreciation (Depreciation) on:
Investments		15
Foreign Currency Translations		(—	@)
Net Assets	$	9,612

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Discovery Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	6,421
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		604,641
Net Asset Value, Offering and Redemption Price Per Share	$	10.62
CLASS A:
Net Assets	$	2,965
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		279,201
Net Asset Value, Redemption Price Per Share	$	10.62
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.59
Maximum Offering Price Per Share	$	11.21
CLASS L:
Net Assets	$	226
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		21,377
Net Asset Value, Offering and Redemption Price Per Share	$	10.59
⁽¹⁾ Including: Securities on Loan, at Value:	$	276

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Discovery Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $23 of Foreign Taxes Withheld)	$	531
Income from Securities Loaned — Net		21
Interest from Securities of Unaffiliated Issuers		4
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		557
Expenses:
Professional Fees		107
Advisory Fees (Note B)		99
Custodian Fees (Note F)		19
Shareholder Reporting Fees		18
Registration Fees		17
Shareholder Services Fees — Class A (Note D)		8
Distribution and Shareholder Services Fees — Class L (Note D)		2
Administration Fees (Note C)		9
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Pricing Fees		6
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		3
Sub Transfer Agency Fees — Class L		—	@
Directors' Fees and Expenses		2
Sub Transfer Agency Fees		—	@
Other Expenses		10
Total Expenses		308
Waiver of Advisory Fees (Note B)		(99	)
Expenses Reimbursed by Adviser (Note B)		(40	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		161
Net Investment Income		396
Realized Gain (Loss):
Investments Sold		587
Foreign Currency Transactions		(7	)
Net Realized Gain		580
Change in Unrealized Appreciation (Depreciation):
Investments		(1,311	)
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(1,311	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(731	)
Net Decrease in Net Assets Resulting from Operations	$	(335	)

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Discovery Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	396		$	(13	)
Net Realized Gain		580			1,933
Net Change in Unrealized Appreciation (Depreciation)		(1,311	)		806
Net Increase (Decrease) in Net Assets Resulting from Operations		(335	)		2,726
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(295	)		(39	)
Net Realized Gain		(1,086	)		(983	)
Paid-in-Capital		(151	)		—
*Class A:**
Net Investment Income		(123	)		(3	)
Net Realized Gain		(473	)		(168	)
Paid-in-Capital		(68	)		—
*Class H:**
Net Investment Income		—			(1	)**
Net Realized Gain		—			(11	)**
Class L:
Net Investment Income		(8	)		(—	@)
Net Realized Gain		(37	)		(31	)
Paid-in-Capital		(6	)		—
Total Distributions		(2,247	)		(1,236	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		2,992			5,809
Distributions Reinvested		1,334			894
Redeemed		(4,608	)		(2,877	)
*Class A:**
Subscribed		3,257			712
Distributions Reinvested		600			131
Conversion from Class H		—			799
Redeemed		(1,615	)		(357	)
*Class H:**
Subscribed		—			197	**
Distributions Reinvested		—			10	**
Conversion to Class A		—			(799	)**
Redeemed		—			(1,194	)**
Class L:
Subscribed		8			111
Distributions Reinvested		25			14
Redeemed		(16	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		1,977			3,450
Total Increase (Decrease) in Net Assets		(605	)		4,940
Net Assets:
Beginning of Period		10,217			5,277
End of Period (Including Distributions in Excess of Net Investment Income of $(82) and $(66))	$	9,612		$	10,217

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Discovery Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		220			450
Shares Issued on Distributions Reinvested		120			68
Shares Redeemed		(355	)		(207	)
Net Increase (Decrease) in Class I Shares Outstanding		(15	)		311
*Class A:**
Shares Subscribed		246			51
Shares Issued on Distributions Reinvested		54			10
Conversion from Class H		—			60
Shares Redeemed		(127	)		(27	)
Net Increase in Class A Shares Outstanding		173			94
*Class H:**
Shares Subscribed		—			15	**
Shares Issued on Distributions Reinvested		—			1	**
Conversion to Class A		—			(60	)**
Shares Redeemed		—			(100	)**
Net Decrease in Class H Shares Outstanding		—			(144	)
Class L:
Shares Subscribed		1			9
Shares Issued on Distributions Reinvested		2			1
Shares Redeemed		(1	)		—
Net Increase in Class L Shares Outstanding		2			10

@ Amount is less than $500.

* Effective September 9, 2013, Class P and H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Discovery Portfolio

	Class I
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.70		$	11.11		$	9.06		$	9.97		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)† 0.48		(0.01	)		0.25			0.13			(0.00	)		‡
Net Realized and Unrealized Gain (Loss)		(0.77	)		4.43			2.62			(0.92	)		(0.03	)
Total from Investment Operations		(0.29	)		4.42			2.87			(0.79	)		(0.03	)
Distributions from and/or in Excess of:
Net Investment Income		(0.55	)		(0.07	)		(0.30	)		(0.12	)		—
Net Realized Gain		(1.95	)		(1.76	)		(0.52	)		(0.00	)‡		—
Paid-in-Capital		(0.29	)		—			—			—			—
Total Distributions		(2.79	)		(1.83	)		(0.82	)		(0.12	)		—
Net Asset Value, End of Period	$	10.62		$	13.70		$	11.11		$	9.06		$	9.97
Total Return++		(1.96	)%		40.72	%		31.64	%		(7.72	)%		(0.30	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6,421		$	8,493		$	3,432		$	2,446		$	697
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.34	%+		1.34	%+		1.35	%+		1.35	%+		1.35	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		3.70	%+		(0.07	)%+		2.41	%+		1.39	%+		(1.14	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		84	%		100	%		96	%		83	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.65	%		3.65	%		4.33	%		5.52	%		238.14	%*
Net Investment Income (Loss) to Average Net Assets		2.39	%		(2.38	)%		(0.57	)%		(2.78	)%		(237.93	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Discovery Portfolio

	Class A@
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.69		$	11.11		$	9.07		$	9.97		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.44			(0.09	)		0.22			0.12			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		(0.76	)		4.47			2.62			(0.92	)		(0.03	)
Total from Investment Operations		(0.32	)		4.38			2.84			(0.80	)		(0.03	)
Distributions from and/or in Excess of:
Net Investment Income		(0.51	)		(0.04	)		(0.28	)		(0.10	)		—
Net Realized Gain		(1.95	)		(1.76	)		(0.52	)		(0.00	)‡		—
Paid-in-Capital		(0.29	)		—			—			—			—
Total Distributions		(2.75	)		(1.80	)		(0.80	)		(0.10	)		—
Net Asset Value, End of Period	$	10.62		$	13.69		$	11.11		$	9.07		$	9.97
Total Return++		(2.25	)%		40.33	%		31.40	%		(7.98	)%		(0.30	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,965		$	1,455		$	137		$	91		$	100
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.69	%+		1.65	%+^^		1.60	%+		1.60	%+		1.60	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		3.35	%+		(0.66	)%+		2.16	%+		1.14	%+		(1.39	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		84	%		100	%		96	%		83	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.02	%		3.87	%		4.58	%		5.77	%		238.39	%*
Net Investment Income (Loss) to Average Net Assets		2.02	%		(2.88	)%		(0.82	)%		(3.03	)%		(238.18	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

‡ Amount is less than $0.005 per share.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.70% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.60% for Class A shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Discovery Portfolio

	Class L
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	13.64		$	11.11		$	9.07		$	9.97		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.37			(0.14	)		0.17			0.06			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		(0.76	)		4.45			2.61			(0.91	)		(0.03	)
Total from Investment Operations		(0.39	)		4.31			2.78			(0.85	)		(0.03	)
Distributions from and/or in Excess of:
Net Investment Income		(0.42	)		(0.02	)		(0.22	)		(0.05	)		—
Net Realized Gain		(1.95	)		(1.76	)		(0.52	)		(0.00	)‡		—
Paid-in-Capital		(0.29	)		—			—			—			—
Total Distributions		(2.66	)		(1.78	)		(0.74	)		(0.05	)		—
Net Asset Value, End of Period	$	10.59		$	13.64		$	11.11		$	9.07		$	9.97
Total Return++		(2.81	)%		39.68	%		30.62	%		(8.41	)%		(0.30	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	226		$	269		$	111		$	91		$	100
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.19	%+		2.13	%+^^		2.10	%+		2.10	%+		2.10	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		2.85	%+		(1.05	)%+		1.66	%+		0.64	%+		(1.89	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		84	%		100	%		96	%		83	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		4.08	%		4.62	%		5.08	%		6.27	%		238.89	%*
Net Investment Income (Loss) to Average Net Assets		0.96	%		(3.54	)%		(1.32	)%		(3.53	)%		(238.68	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.20% for Class L shares. Prior to September 16, 2013, the maximum ratio was 2.10% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Discovery Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established and emerging franchise companies located throughout the world, with capitalizations within the range of companies included in the MSCI All Country World Index. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A Shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) certain portfolio securities may be valued by an outside pricing service approved by the Directors. The pricing service may

utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (5) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (8) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Auto Components	$	365	$	—	$	—	$	365
Capital Markets		—		484		—		484
Chemicals		124		—		—		124
Commercial Services & Supplies		—		448		—		448
Construction Materials		—		137		—		137
Diversified Financial Services		—		659		—		659
Food & Staples Retailing		50		—		—		50
Health Care Technology		32		—		—		32
Hotels, Restaurants & Leisure		164		—		—		164
Industrial Conglomerates		—		590		—		590
Insurance		459		—		—		459
Internet & Catalog Retail		219		208		—		427
Internet Software & Services		105		375		52		532

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Machinery	$	116	$	—	$	—	$	116
Media		—		300		—		300
Pharmaceuticals		—		112		—		112
Real Estate Management & Development		—		181		—		181
Software		410		—		—		410
Specialty Retail		—		446		—		446
Textiles, Apparel & Luxury Goods		—		1,395		—		1,395
Total Common Stocks		2,044		5,335		52		7,431
Preferred Stocks		—		—		534		534
Convertible Preferred Stock		—		—		5		5
Call Option Purchased		693		—		—		693
Short-Term Investments
Investment Company		1,198		—		—		1,198
Repurchase Agreement		—		22		—		22
Total Short-Term Investments		1,198		22		—		1,220
Total Assets	$	3,935	$	5,357	$	591	$	9,883

approximately $3,448,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)		Preferred Stocks (000)		Convertible Preferred Stock (000)
Beginning Balance	$	38	$	67	$	4
Purchases		—		245		—
Sales		—		—		—
Amortization of discount		—		—		—
Transfers in		—		—		—
Transfers out		—		—		—
Corporate actions		—		—		—
Change in unrealized appreciation (depreciation)		14		222		1
Realized gains (losses)		—		—		—
Ending Balance	$	52	$	534	$	5
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2014	$	14	$	222	$	1

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Hotels, Restaurants & Leisure
Preferred Stock	$	59	Market Transaction Method	Precedent Transaction of Preferred Stock	$	14.47		$	14.47		$	14.47		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.5	%		18.5	%		17.5	%	Decrease
				Perpetual Growth Rate		2.5	%		3.5	%		3.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		4.2	x		6.6	x		5.0	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Internet & Catalog Retail
Preferred Stocks	$	97	Market Transaction Method	Tender Offer Valuation	$	50.41		$	50.41		$	50.41		Increase
	$	229	Market Transaction Method	Precedent Transaction of Preferred Stock	$	119.76		$	119.76		$	119.76		Increase

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

	Fair Value at December 31, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Internet Software & Services
Common Stock	$	52	Market Transaction Method	Tender Offer Valuation	$	19.10		$	19.10		$	19.10		Increase
Convertible Preferred Stock	$	5
Software
Preferred Stocks	$	35	Market Transaction Method	Precedent Transaction	$	4.13		$	4.13		$	4.13		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		19.0	%		21.0	%		20.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		12.6	x		15.8	x		13.4	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
	$	65	Market Transaction Method	Precedent Transaction of Preferred Stock	$	11.42		$	11.42		$	11.42		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		18.0	%		20.0	%		19.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		14.6	x		28.9	x		20.0	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
	$	49	Market Transaction Method	Precedent Transaction of Preferred Stock	$	8.89		$	8.89		$	8.89		Increase
			Market Transaction Method	Precedent Transaction of Preferred Stock	$	6.13		$	6.13		$	6.13		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.0	%		18.0	%		17.0	%	Decrease
				Perpetual Growth Rate		2.5	%		3.5	%		3.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		10.2	x		13.1	x		11.2	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease

on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

693

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	194	(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	341	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	693	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty Gross Asset Derivatives Presented in Statement of Assets and	Financial Liabilities (000)		Collateral Instrument (000)		Net Amount (not less Received (000)		than $0) (000)
UBS AG	$	693	$	—	$	—	$	693

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					7,000

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	276	(e)	$	—	$	(276	)(f)(g)	$	0

(e) Represents market value of loaned securities at period end.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

(f) The Portfolio received cash collateral of approximately $284,000, of which approximately $260,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $24,000, which is not reflected in the Portfolio of Investments.

(g) The actual collateral received is greater than the amount shown here due to overcollateralization.

9. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.90	%			0.85	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.35% for Class I shares, 1.70% for Class A shares and 2.20% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $99,000 of advisory fees were waived and approximately $47,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

subsidiary of Morgan Stanley, serves as the Fund's Distributor of Portfolio shares pursuant to a Distribution Agreement. The Fund has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Portfolio pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $8,513,000 and $8,586,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	505			$	10,872			$	10,179			$	1			$	1,198

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Expense" and penalties in ''Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:						2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Paid-in- Capital (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	941	$	1,081	$	225	$	405	$	831

Distributions in Excess of Net Investment Income (000)				Distributions in Excess of Net Realized Gain (000)				Paid-in- Capital (000)
$	14			$	(15	)		$	1

At December 31, 2014, the Portfolio had no distributable earnings on a tax basis.

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $10,020,000. The aggregate gross unrealized appreciation is approximately $857,000 and the aggregate gross unrealized depreciation is approximately $994,000 resulting in net unrealized depreciation of approximately $137,000.

Capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year

are deemed to arise on the first day of the Portfolio's next taxable year. For the year ended December 31, 2014, the Portfolio deferred to January 1, 2015 for U.S. Federal income tax purposes the following losses:

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	17			$	148

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 46% and 51%, for Class A and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Discovery Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Discovery Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Discovery Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 2.6% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $1,081,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E.-Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGDANN
1110204 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Advantage Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					8
Statement of Operations					10
Statements of Changes in Net Assets					11
Financial Highlights					13
Notes to Financial Statements					16
Report of Independent Registered Public Accounting Firm					25
Federal Tax Notice					26
U.S. Privacy Policy					27
Director and Officer Information					30

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in International Advantage Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

International Advantage Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Advantage Portfolio Class I	$	1,000.00	$	970.10	$	1,018.95	$	6.16	$	6.31		1.24	%
International Advantage Portfolio Class A		1,000.00		968.10		1,017.19		7.89		8.08		1.59
International Advantage Portfolio Class L		1,000.00		966.10		1,014.67		10.36		10.61		2.09

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

International Advantage Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 2.58%, net of fees, for Class I shares. The Portfolio's Class I shares outperformed against the Portfolio's benchmark, the MSCI All Country World ex USA Index (the "Index"), which returned -3.87%.

Factors Affecting Performance

• The Portfolio's overall outperformance relative to the Index was driven by stock selection.

• Stock selection in consumer discretionary boosted relative performance. A position in a South Korean operator of duty free shops and luxury hotels was the second largest contributor to relative returns in the overall Portfolio.

• The Portfolio benefited from stock selection in financials, driven by strong results from a holding in a Canada-based global alternative asset manager specializing in real estate and infrastructure assets.

• The main detractor from relative performance was the Portfolio's underweight exposure to the health care sector, the Index's top-performing sector during the period.

• Stock selection in the industrials sector hampered relative gains, with a position in a U.K.-based multinational inspection, product testing and certification company the second-biggest detractor in the overall Portfolio.

• Stock selection in the telecommunication services sector was another area of relative weakness. The Portfolio had one holding in the sector, which performed poorly during the period.

Management Strategies

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

International Advantage Portfolio

* Minimum Investment for Class I shares

** Commenced Operations on December 28, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the MSCI All Country World ex USA Index⁽¹⁾ and the Lipper International Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		2.58	%		—		—		8.41	%
MSCI All Country World ex USA Index		–3.87			—		—		3.09
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		4.00
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		2.21			—		—		8.11
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–3.19			—		—		6.68
MSCI All Country World ex USA Index		–3.87			—		—		3.09
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		4.00
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		1.69			—		—		7.58
MSCI All Country World ex USA Index		–3.87			—		—		3.09
Lipper International Multi-Cap Growth Funds Index		–5.08			—		—		4.00

⁽⁴⁾ Commenced operations on December 28, 2010.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

International Advantage Portfolio

	Shares		Value (000)
Common Stocks (88.1%)
Australia (1.4%)
Aurizon Holding Ltd.		16,039	$	60
Belgium (3.9%)
Anheuser-Busch InBev N.V.		1,543		174
Brazil (2.8%)
CETIP SA — Mercados Organizados		10,404		126
Canada (5.1%)
Brookfield Asset Management, Inc., Class A		1,650		83
Brookfield Infrastructure Partners LP		3,424		143
				226
China (3.8%)
TAL Education Group ADR (a)		5,949		167
Denmark (5.9%)
DSV A/S		8,521		259
France (12.4%)
Christian Dior SA		848		145
Danone SA		1,947		128
Edenred		2,037		57
Hermes International (b)		241		86
Pernod Ricard SA		1,203		133
				549
Germany (2.0%)
Adidas AG		1,247		87
Japan (4.2%)
Calbee, Inc.		5,400		186
Korea, Republic of (4.2%)
Hotel Shilla Co., Ltd.		902		75
NAVER Corp.		172		111
				186
Norway (3.6%)
Telenor ASA		2,852		57
TGS Nopec Geophysical Co., ASA		4,613		100
				157
South Africa (2.6%)
Naspers Ltd., Class N		912		117
Switzerland (9.1%)
Kuehne & Nagel International AG (Registered)		1,260		171
Nestle SA (Registered)		3,164		232
				403
United Kingdom (15.8%)
Burberry Group PLC		8,887		225
Diageo PLC		4,977		143
Imperial Tobacco Group PLC		1,817		80
Intertek Group PLC		3,254		118
Reckitt Benckiser Group PLC		1,650		133
				699

	Shares		Value (000)
United States (11.3%)
Cognizant Technology Solutions Corp., Class A (a)		2,477	$	131
EPAM Systems, Inc. (a)		2,759		132
Luxoft Holding, Inc. (a)		2,601		100
Priceline Group, Inc. (a)		122		139
				502
Total Common Stocks (Cost $3,541)				3,898
Participation Notes (5.7%)
China (5.7%)
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 2/13/15 (a)		3,568		109
Kweichow Moutai Co., Ltd., Class A, Equity Linked Notes, expires 3/4/21 (a)		4,620		142
Total Participation Notes (Cost $193)				251
	Notional Amount
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY June 2015 @ CNY 6.62		814,662		1
USD/CNY November 2015 @ CNY 6.65		747,834		4
Total Call Options Purchased (Cost $5)				5
	Shares
Short-Term Investments (2.8%)
Securities held as Collateral on Loaned Securities (1.4%)
Investment Company (1.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		57,895		58
	Face Amount (000)
Repurchase Agreement (0.1%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $5; fully collateralized by various U.S. Government obligations; 2.13% - 4.25% due 1/31/21 - 11/15/40; valued at $5)	$	5		5
Total Securities held as Collateral on Loaned Securities (Cost $63)				63
	Shares
Investment Company (1.4%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $61)		60,794		61
Total Short-Term Investments (Cost $124)				124
Total Investments (96.7%) (Cost $3,863) Including $66 of Securities Loaned (c)				4,278
Other Assets in Excess of Liabilities (3.3%)				146
Net Assets (100.0%)			$	4,424

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

International Advantage Portfolio

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2014.

(c) The approximate fair value and percentage of net assets, $3,003,000 and 67.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

CNY — Chinese Yuan Renminbi

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		41.3	%
Beverages		16.6
Food Products		13.0
Textiles, Apparel & Luxury Goods		12.9
Information Technology Services		8.6
Road & Rail		7.6
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Advantage Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $3,744)	$	4,159
Investment in Security of Affiliated Issuer, at Value (Cost $119)		119
Total Investments in Securities, at Value (Cost $3,863)		4,278
Foreign Currency, at Value (Cost $2)		2
Cash		7
Receivable for Investments Sold		347
Due from Adviser		43
Tax Reclaim Receivable		4
Dividends Receivable		3
Receivable from Affiliate		—	@
Other Assets		28
Total Assets		4,712
Liabilities:
Payable for Investments Purchased		154
Collateral on Securities Loaned, at Value		69
Payable for Professional Fees		45
Payable for Custodian Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Administration Fees		—	@
Other Liabilities		14
Total Liabilities		288
Net Assets	$	4,424
Net Assets Consist of:
Paid-in-Capital	$	3,888
Accumulated Undistributed Net Investment Income		19
Accumulated Net Realized Gain		103
Unrealized Appreciation (Depreciation) on:
Investments		415
Foreign Currency Translations		(1	)
Net Assets	$	4,424

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	3,387
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		274,047
Net Asset Value, Offering and Redemption Price Per Share	$	12.36
CLASS A:
Net Assets	$	889
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		71,825
Net Asset Value, Redemption Price Per Share	$	12.37
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.69
Maximum Offering Price Per Share	$	13.06
CLASS L:
Net Assets	$	148
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		12,036
Net Asset Value, Offering and Redemption Price Per Share	$	12.31
⁽¹⁾ Including: Securities on Loan, at Value:	$	66

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Advantage Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $8 of Foreign Taxes Withheld)	$	96
Dividends from Security of Affiliated Issuer (Note G)		—	@
Income from Securities Loaned — Net		—	@
Total Investment Income		96
Expenses:
Professional Fees		103
Advisory Fees (Note B)		38
Registration Fees		29
Custodian Fees (Note F)		18
Shareholder Reporting Fees		15
Pricing Fees		6
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Administration Fees (Note C)		3
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class L (Note D)		1
Directors' Fees and Expenses		1
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Other Expenses		15
Total Expenses		237
Expenses Reimbursed by Adviser (Note B)		(137	)
Waiver of Advisory Fees (Note B)		(38	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		56
Net Investment Income		40
Realized Gain (Loss):
Investments Sold		115
Foreign Currency Transactions		(1	)
Net Realized Gain		114
Change in Unrealized Appreciation (Depreciation):
Investments		(53	)
Foreign Currency Translations		(1	)
Net Change in Unrealized Appreciation (Depreciation)		(54	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		60
Net Increase in Net Assets Resulting from Operations	$	100

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Advantage Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	40		$	27
Net Realized Gain		114			214
Net Change in Unrealized Appreciation (Depreciation)		(54	)		118
Net Increase in Net Assets Resulting from Operations		100			359
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(18	)		(26	)
Net Realized Gain		(73	)		(117	)
*Class A:**
Net Investment Income		(2	)		(1	)
Net Realized Gain		(16	)		(11	)
*Class H:**
Net Investment Income		—			(—	@)**
Net Realized Gain		—			(—	@)**
Class L:
Net Investment Income		(—	@)		(—	@)
Net Realized Gain		(3	)		(6	)
Total Distributions		(112	)		(161	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		1,201			1,363
Distributions Reinvested		61			80
Redeemed		(508	)		(388	)
*Class A:**
Subscribed		688			—
Distributions Reinvested		12			—
Conversion from Class H		—			119
Redeemed		(52	)		(—	@)
*Class H:**
Subscribed		—			—	@**
Distributions Reinvested		—			—	@**
Conversion to Class A		—			(119	)**
Redeemed		—			(831	)**
Class L:
Subscribed		26			—
Distributions Reinvested		—	@		—
Net Increase in Net Assets Resulting from Capital Share Transactions		1,428			224
Redemption Fees		—	@		—
Total Increase in Net Assets		1,416			422
Net Assets:
Beginning of Period		3,008			2,586
End of Period (Including Accumulated Undistributed Net Investment Income of $19 and $4)	$	4,424		$	3,008

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

International Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		97			115
Shares Issued on Distributions Reinvested		5			7
Shares Redeemed		(41	)		(31	)
Net Increase in Class I Shares Outstanding		61			91
*Class A:**
Shares Subscribed		55			—
Shares Issued on Distributions Reinvested		1			—
Conversion from Class H		—			10
Shares Redeemed		(4	)		(—	@@)
Net Increase in Class A Shares Outstanding		52			10
*Class H:**
Shares Subscribed		—			—	@@**
Shares Issued on Distributions Reinvested		—			—	@@**
Conversion to Class A		—			(10	)**
Shares Redeemed		—			(70	)**
Net Decrease in Class H Shares Outstanding		—			(80	)
Class L:
Shares Subscribed		2			—
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class L Shares Outstanding		2			—

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Advantage Portfolio

	Class I
	Year Ended December 31,												Period from December 28, 2010^ to
Selected Per Share Data and Ratios	2014			2013			2012			2011			December 31, 2010
Net Asset Value, Beginning of Period	$	12.36		$	11.60		$	9.65		$	9.99		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.13			0.13			0.12			0.12			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		0.20			1.32			1.93			(0.26	)		(0.01	)
Total from Investment Operations		0.33			1.45			2.05			(0.14	)		(0.01	)
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.12	)		(0.10	)		(0.11	)		—
Net Realized Gain		(0.26	)		(0.57	)		—			(0.09	)		—
Total Distributions		(0.33	)		(0.69	)		(0.10	)		(0.20	)		—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	12.36		$	12.36		$	11.60		$	9.65		$	9.99
Total Return++		2.58	%		12.72	%		21.27	%		(1.31	)%		(0.10	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,387		$	2,637		$	1,421		$	1,255		$	1,198
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.24	%+		1.24	%+		1.24	%+		1.24	%+		1.25	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.05	%+		1.04	%+		1.08	%+		1.17	%+		(1.09	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.01	%		0.01	%		N/A
Portfolio Turnover Rate		30	%		49	%		40	%		27	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		5.47	%		6.30	%		8.89	%		7.08	%+		176.40	%*
Net Investment Loss to Average Net Assets		(3.18	)%		(4.02	)%		(6.57	)%		(4.67	)%+		(176.24	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Advantage Portfolio

	Class A@
	Year Ended December 31,												Period from December 28, 2010^ to
Selected Per Share Data and Ratios	2014			2013			2012			2011			December 31, 2010
Net Asset Value, Beginning of Period	$	12.38		$	11.60		$	9.65		$	9.99		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.09			0.04			0.09			0.09			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		0.19			1.38			1.94			(0.25	)		(0.01	)
Total from Investment Operations		0.28			1.42			2.03			(0.16	)		(0.01	)
Distributions from and/or in Excess of:
Net Investment Income		(0.03	)		(0.07	)		(0.08	)		(0.09	)		—
Net Realized Gain		(0.26	)		(0.57	)		—			(0.09	)		—
Total Distributions		(0.29	)		(0.64	)		(0.08	)		(0.18	)		—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	12.37		$	12.38		$	11.60		$	9.65		$	9.99
Total Return++		2.21	%		12.43	%		20.99	%		(1.57	)%		(0.10	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	889		$	248		$	116		$	96		$	100
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.59	%+		1.55	%+^^		1.49	%+		1.49	%+		1.50	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.70	%+		0.29	%+		0.83	%+		0.92	%+		(1.34	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.01	%		0.01	%		N/A
Portfolio Turnover Rate		30	%		49	%		40	%		27	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		6.03	%		6.89	%		9.14	%		7.33	%+		176.65	%*
Net Investment Loss to Average Net Assets		(3.74	)%		(5.05	)%		(6.82	)%		(4.92	)%+		(176.49	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

International Advantage Portfolio

	Class L
	Year Ended December 31,												Period from December 28, 2010^ to
Selected Per Share Data and Ratios	2014			2013			2012			2011			December 31, 2010
Net Asset Value, Beginning of Period	$	12.36		$	11.60		$	9.65		$	9.99		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.02			0.02			0.04			0.04			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		0.20			1.34			1.93			(0.25	)		(0.01	)
Total from Investment Operations		0.22			1.36			1.97			(0.21	)		(0.01	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.03	)		(0.02	)		(0.04	)		—
Net Realized Gain		(0.26	)		(0.57	)		—			(0.09	)		—
Total Distributions		(0.27	)		(0.60	)		(0.02	)		(0.13	)		—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	12.31		$	12.36		$	11.60		$	9.65		$	9.99
Total Return++		1.69	%		11.88	%		20.43	%		(2.09	)%		(0.10	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	148		$	123		$	116		$	97		$	100
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.09	%+		2.03	%+^^		1.99	%+		1.99	%+		2.00	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.20	%+		0.18	%+		0.33	%+		0.42	%+		(1.84	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.01	%		0.01	%		N/A
Portfolio Turnover Rate		30	%		49	%		40	%		27	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		7.42	%		7.43	%		9.64	%		7.83	%+		177.15	%*
Net Investment Loss to Average Net Assets		(5.13	)%		(5.22	)%		(7.32	)%		(5.42	)%+		(176.99	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the International Advantage Portfolio. The Portfolio seeks long-term capital appreciation. The Portfolio seeks to achieve the investment objective by investing primarily in established companies on an international basis, with capitalizations within the range of companies included in the MSCI All Country World ex USA Index. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer;

(4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	—	$	450	$	—	$	450
Capital Markets		—		126		—		126
Commercial Services & Supplies		—		57		—		57
Diversified Consumer Services		167		—		—		167
Diversified Telecommunication Services		—		57		—		57
Electric Utilities		143		—		—		143
Energy Equipment & Services		—		100		—		100
Food Products		—		546		—		546
Hotels, Restaurants & Leisure		—		75		—		75
Household Products		—		133		—		133
Information Technology Services		363		—		—		363
Internet & Catalog Retail		139		—		—		139
Internet Software & Services		—		111		—		111
Marine		—		171		—		171
Media		—		117		—		117
Professional Services		—		118		—		118

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Real Estate Management & Development	$	83	$	—	$	—	$	83
Road & Rail		—		319		—		319
Textiles, Apparel & Luxury Goods		—		543		—		543
Tobacco		—		80		—		80
Total Common Stocks		895		3,003		—		3,898
Participation Notes		—		251		—		251
Call Options Purchased		—		5		—		5
Short-Term Investments
Investment Company		119		—		—		119
Repurchase Agreement		—		5		—		5
Total Short-Term Investments		119		5		—		124
Total Assets	$	1,014	$	3,264	$	—	$	4,278

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $2,903,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Call Options Purchased

Investments, at Value
(Call Options Purchased)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	(3	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Call Options Purchased)	$	1	(c)

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Statement of Assets and Liabilities	Gross Amounts of Assets and Liabilities Presented in the
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Call Options Purchased	$	5	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	5	$	—	$	—	$	5

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Call Options Purchased:
Average monthly notional amount					1,418,000

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	66	(e)	$	—	$	(66	)(f)(g)	$	0

(e) Represents market value of loaned securities at period end.

(f) The Portfolio received cash collateral of approximately $69,000, of which approximately $63,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $6,000, which is not reflected in the Portfolio of Investments.

(g) The actual collateral received is greater than the amount shown here due to overcollateralization.

8. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares and Class L shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase,

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

10. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

11. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Portfolio is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses -distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.90	%			0.85	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.25% for Class I shares, 1.60% for Class A shares and 2.10% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $38,000 of advisory fees were waived and approximately $143,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $2,412,000 and $1,199,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	59			$	2,588			$	2,528			$	—	@		$	119

@ Amount is less than $500.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	36	$	76	$	38	$	123

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, basis adjustments on partnerships sold and equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	(5	)		$	5			$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	40			$	88

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $3,870,000. The aggregate gross unrealized appreciation is approximately $507,000 and the aggregate gross unrealized depreciation is approximately $99,000 resulting in net unrealized appreciation of approximately $408,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 58% and 12%, for Class A and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Advantage Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of International Advantage Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Advantage Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014.

The Portfolio designated and paid approximately $76,000 as a long-term capital gain distribution.

For Federal income tax purposes, the following information is furnished with respect to the Portfolio's earnings for the year ended December 31, 2014. When distributed, certain earnings may be subject to a maximum tax rate of 15% as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Portfolio designated up to a maximum of approximately $36,000 as taxable at this lower rate.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIIAANN
1119196 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Asian Equity Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					8
Statement of Operations					9
Statements of Changes in Net Assets					10
Financial Highlights					12
Notes to Financial Statements					15
Report of Independent Registered Public Accounting Firm					22
Federal Tax Notice					23
U.S. Privacy Policy					24
Director and Officer Information					27

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Asian Equity Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Asian Equity Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Asian Equity Portfolio Class I	$	1,000.00	$	971.70	$	1,017.90	$	7.21	$	7.38		1.45	%
Asian Equity Portfolio Class A		1,000.00		970.20		1,016.13		8.94		9.15		1.80
Asian Equity Portfolio Class L		1,000.00		967.70		1,013.61		11.41		11.67		2.30

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Asian Equity Portfolio

The Portfolio seeks long-term capital appreciation by investing primarily in equity securities of companies in the Asia-Pacific region, excluding Japan.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 15.15%, net of fees, for Class I shares. The Portfolio's Class I shares outperformed against the Portfolio's benchmark, the MSCI All Country Asia ex Japan Index (the "Index"), which returned 4.80%.

Factors Affecting Performance

• The Asia ex Japan region outperformed both developed markets, which returned -4.90%, and the broader emerging markets, which posted a -2.19% return, over the year (as represented by the Index, the MSCI EAFE Index and the MSCI Emerging Markets Index, respectively). Toward the end of the year, falling oil prices dominated headlines as the Organization of Petroleum Exporting Countries (OPEC) did not reach an agreement to cut production, the U.S. dollar continued its upward trajectory and growth concerns in Europe and China continued. The variance between the best- and worst-performing markets over the 12-month period was large, as Indonesia, the Philippines and India posted strong returns of 26.59%, 25.59% and 23.87%, respectively⁽ⁱ⁾ and markets such as Korea and Malaysia lagged their regional peers to return -11.12% and -10.66%, respectively. In the fourth quarter, China and Hong Kong posted positive returns, rising 7.2% and 3.1%, respectively, pricing in expectations of further easing in Chinese monetary policy. However, the fourth quarter rally in China is not sustainable, in our view, as we believe the market has yet to fully digest the potential path of the coming slowdown in China. (Country market returns are represented by their respective MSCI indexes.)

• 2014 was a volatile year for Asian and emerging market equities. Early in the year, investor concerns about a slowing Chinese economy and Russian actions in Ukraine and Crimea were later followed by sharp rallies later in the second quarter sparked by attractive valuations, selective hope of economic reform and mini-stimulus in China. However, in the second half of 2014, a combination of factors, including renewed fears about the prospect of rising

U.S. interest rates and a strong U.S. dollar which were exacerbated by falling oil and commodity prices, led the Index to reverse some gains from the first half of the year.

• For the Portfolio overall, stock selection was a positive contributor to relative performance; however, this was offset by the negative impact of country allocation.

• From a top-down angle, overweight exposure to Korea, underweight exposure to China and an out-of-benchmark position in Australia had detracted from performance, while overweight exposures to Thailand and the Philippines had been relative contributors.

• From a bottom-up angle, stock selection in Korea (overweight consumer discretionary, underweight materials) and China (overweight health care and information technology, underweight energy) were the main contributors to performance, while stock selection in Hong Kong (overweight industrials, underweight financials), Taiwan (overweight consumer discretionary and industrials) and Malaysia (overweight energy, industrials and consumer discretionary) were relative detractors.

Management Strategies

• The Portfolio seeks long-term capital appreciation and integrates top-down country allocation and bottom-up stock selection. The Portfolio will invest primarily in listed equity securities in markets within the Asia ex-Japan universe across the full market-cap range.

• As of the end of the period, on a relative basis, the Portfolio had overweight exposures to the consumer discretionary, health care and telecommunication services sectors, while maintaining underweight exposures to the materials, utilities and financials sectors. At the country level, the Portfolio had overweight exposures to India, Philippines, Thailand and Korea, with underweight exposures to Singapore, China/Hong Kong, Malaysia and Taiwan.

• During the year, we gradually added to our allocation to India, bringing it to an overweight position. 2014 was a landmark year for India. After the U.S. Federal Reserve-induced taper scare in 2013, the Indian economy was admitted into the

⁽ⁱ⁾ Source for market data: MSCI

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Asian Equity Portfolio

infamous "Fragile Five" club, i.e., countries with low growth, high inflation and high current account deficits. Within a year, the perception about India has shifted 180 degrees. India no longer belongs to the infamous club; its current account deficit has significantly narrowed and is expected to tighten further thanks to lower global commodity prices, a low inflation environment, a stable currency, improved fiscal balance and growth back on recovery path. Also, India witnessed one of the best election outcomes across all emerging markets in the year 2014 with a reform-minded government taking charge. The cyclical improvement in the macro environment was aided by the strong and stable government. We witnessed few, but effective, reform moves by the new government but have yet to see big bang reforms that can structurally improve India. The implementation of key reforms to boost growth and the Union Budget (the nation's annual budget) due in February 2015 will be watched by the markets in the coming months. We believe things have changed at the margin, but we also believe that the recovery is going to be slow and gradual. A majority of the key high-frequency macro-economic indicators are seeing improvement or are in a stable zone. Falling commodity prices have brought respite to the headline inflation rate, which has raised the expectations of a rate cut from the central bank.

* Minimum Investment for Class I shares

** Commenced Operations on December 28, 2010.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the MSCI All Country Asia ex Japan Index⁽¹⁾ and the Lipper Pacific Region ex Japan Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		15.15	%		—		—		4.86	%
MSCI All Country Asia ex Japan Index		4.80			—		—		2.78
Lipper Pacific Region ex Japan Funds Index		3.52			—		—		3.25
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		14.71			—		—		4.60
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		8.70			—		—		3.22
MSCI All Country Asia ex Japan Index		4.80			—		—		2.78
Lipper Pacific Region ex Japan Funds Index		3.52			—		—		3.25
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		13.97			—		—		4.06
MSCI All Country Asia ex Japan Index		4.80			—		—		2.78
Lipper Pacific Region ex Japan Funds Index		3.52			—		—		3.25

⁽¹⁾ The MSCI All Country Asia ex Japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Asia, excluding Japan. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Pacific Region ex Japan Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Pacific Region ex Japan Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 10 funds represented in this Index. As of the date of this report, the Portfolio was in the Lipper Pacific Region ex Japan Funds classification.

⁽⁴⁾ Commenced operations on December 28, 2010.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Asian Equity Portfolio

	Shares		Value (000)
Common Stocks (90.8%)
Australia (0.6%)
Seek Ltd.		4,609	$	64
China (23.4%)
Bank of China Ltd. H Shares (a)		949,000		531
China Construction Bank Corp. H Shares (a)		235,000		191
China Life Insurance Co., Ltd. H Shares (a)		39,000		153
China Mengniu Dairy Co., Ltd. (a)		21,000		86
China Mobile Ltd. (a)		22,500		264
China Oilfield Services Ltd. H Shares (a)		52,000		91
China Overseas Land & Investment Ltd. (a)		28,000		83
China Pacific Insurance Group Co., Ltd. H Shares (a)		20,200		101
Chongqing Changan Automobile Co., Ltd. B Shares		57,700		131
CSPC Pharmaceutical Group Ltd. (a)		42,000		37
Huadian Power International Corp. Ltd. H Shares (a)		84,000		73
JD.com, Inc. ADR (b)		2,147		50
Qihoo 360 Technology Co., Ltd. ADR (b)		520		30
Shenzhen International Holdings Ltd. (a)		24,000		35
Sihuan Pharmaceutical Holdings Group Ltd. (a)		145,000		96
TAL Education Group ADR (b)		970		27
Tencent Holdings Ltd. (a)		32,700		469
				2,448
Hong Kong (9.6%)
AIA Group Ltd.		7,600		42
BOC Hong Kong Holdings Ltd.		67,000		223
Cheung Kong Holdings Ltd.		11,000		183
HKT Trust and HKT Ltd.		92,520		120
Hutchison Whampoa Ltd.		21,000		240
L'Occitane International SA		11,000		28
Samsonite International SA		46,200		137
Wharf Holdings Ltd.		4,400		32
				1,005
India (5.3%)
Ambuja Cements Ltd. GDR		21,692		79
HDFC Bank Ltd. ADR		2,665		135
ICICI Bank Ltd. ADR		7,055		81
Infosys Ltd. ADR		3,110		98
ITC Ltd. GDR (b)		11,596		68
Tata Motors Ltd. ADR		2,241		95
				556
Indonesia (3.1%)
Kalbe Farma Tbk PT		868,400		129
Link Net Tbk PT (b)		94,900		38
Matahari Department Store Tbk PT		40,700		49
Nippon Indosari Corpindo Tbk PT		485,300		54
Surya Citra Media Tbk PT		195,400		55
				325

	Shares		Value (000)
Korea, Republic of (18.9%)
Cosmax, Inc. (b)		1,800	$	162
Coway Co., Ltd. (b)		2,260		172
Cuckoo Electronics Co., Ltd. (b)		9		2
Hotel Shilla Co., Ltd. (b)		800		66
Hyundai Engineering & Construction Co., Ltd. (b)		1,115		42
Hyundai Glovis Co., Ltd. (b)		373		99
Industrial Bank of Korea (b)		1,656		21
KB Financial Group, Inc. (b)		6,817		223
KEPCO Plant Service & Engineering Co., Ltd. (b)		613		44
Kia Motors Corp. (b)		3,168		150
KONA I Co., Ltd.		66		2
NAVER Corp. (b)		211		136
NCSoft Corp.		550		90
Orion Corp. (b)		15		14
Paradise Co., Ltd.		2,226		47
Samsung Electronics Co., Ltd.		181		218
Samsung Electronics Co., Ltd. (Preference)		46		43
Samsung Life Insurance Co., Ltd. (b)		882		93
Seoul Semiconductor Co., Ltd. (b)		2,084		38
Shinhan Financial Group Co., Ltd. (b)		3,613		145
SK Hynix, Inc. (b)		4,001		172
				1,979
Laos (0.7%)
Kolao Holdings (b)		4,070		72
Malaysia (2.9%)
Astro Malaysia Holdings Bhd		44,000		38
IHH Healthcare Bhd		90,700		125
IJM Corp., Bhd		21,600		40
SapuraKencana Petroleum Bhd		54,100		36
Tune Ins Holdings Bhd		70,200		34
UEM Sunrise Bhd		82,900		33
				306
Philippines (4.1%)
Ayala Corp.		5,230		81
BDO Unibank, Inc.		17,950		44
DMCI Holdings, Inc.		95,700		33
International Container Terminal Services, Inc.		18,010		46
LT Group, Inc.		102,800		28
Metro Pacific Investments Corp.		497,200		51
Metropolitan Bank & Trust		21,770		40
Rizal Commercial Banking Corp.		47,690		51
SM Investments Corp.		2,150		39
STI Education Systems Holdings, Inc.		1,166,000		20
				433
Singapore (2.9%)
DBS Group Holdings Ltd.		7,094		109
OSIM International Ltd.		22,000		33
Oversea-Chinese Banking Corp. Ltd.		5,000		39
Raffles Medical Group Ltd.		10,085		30
Singapore Telecommunications Ltd.		30,000		88
				299

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Asian Equity Portfolio

	Shares		Value (000)
Taiwan (14.5%)
Advanced Semiconductor Engineering, Inc.		44,000	$	52
Catcher Technology Co., Ltd.		6,000		46
Cathay Financial Holding Co., Ltd.		13,150		19
Chailease Holding Co., Ltd.		34,180		85
Delta Electronics, Inc.		12,000		71
Eclat Textile Co., Ltd.		9,320		94
Epistar Corp.		19,000		38
Far EasTone Telecommunications Co., Ltd.		26,000		60
Fubon Financial Holding Co., Ltd.		46,000		73
Ginko International Co., Ltd.		4,000		42
Hermes Microvision, Inc.		2,000		100
Largan Precision Co., Ltd.		1,000		75
MediaTek, Inc.		7,000		102
momo.com, Inc.		2,546		27
Pegatron Corp.		5,000		12
Taiwan Mobile Co., Ltd.		18,000		60
Taiwan Semiconductor Manufacturing Co., Ltd.		95,000		419
Ton Yi Industrial Corp.		17,000		11
Uni-President Enterprises Corp.		86,060		136
				1,522
Thailand (4.8%)
Advanced Info Service PCL (Foreign)		9,300		71
Bangkok Bank PCL NVDR		13,200		78
Indorama Ventures PCL (Foreign)		64,000		39
Kasikornbank PCL NVDR		7,600		52
Land and Houses PCL (Foreign)		102,900		28
Land and Houses PCL NVDR		143,860		40
Minor International PCL (Foreign)		40,600		40
PTT PCL (Foreign)		5,800		57
Total Access Communication PCL (Foreign)		8,500		25
Total Access Communication PCL NVDR		9,000		26
VGI Global Media PCL (Foreign)		123,444		44
				500
Total Common Stocks (Cost $9,188)				9,509
	No. of Warrants
Warrants (0.0%)
Thailand (0.0%)
Minor International PCL expires 11/3/17 (b) (Cost $—)		1,660		1
	Shares
Investment Company (1.4%)
India (1.4%)
iShares MSCI India ETF (Cost $156)		4,913		148
Participation Notes (4.9%)
India (4.9%)
Bharat Petroleum Corp., Ltd., Equity Linked Notes, expires 3/13/19 (b)		4,884		50
Gateway Distriparks Ltd., Equity Linked Notes, expires 10/17/19 (b)		5,450		30

	Shares		Value (000)
Glenmark Pharmaceuticals Ltd., Equity Linked Notes, expires 5/10/17 (b)		3,627	$	44
Glenmark Pharmaceuticals Ltd., Equity Linked Notes, expires 6/28/18 (b)		1,500		18
Hero MotoCorp Ltd., Equity Linked Notes, expires 1/8/19 (b)		1,336		66
Idea Cellular Ltd., Equity Linked Notes, expires 6/7/18 (b)		15,781		38
IndusInd Bank Ltd., Equity Linked Notes, expires 12/14/15 (b)		2,056		29
IndusInd Bank Ltd., Equity Linked Notes, expires 8/28/18 (b)		5,735		79
Inox Leisure Ltd., Equity Linked Notes, expires 9/23/19 (b)		10,800		31
Maruti Suzuki India Ltd., Equity Linked Notes, expires 12/4/18 (b)		802		43
Oil & Natural Gas Corp., Ltd., Equity Linked Notes, expires 12/27/18 (b)		9,101		49
Shriram Transport Finance Co., Ltd., Equity Linked Notes, expires 1/30/19 (b)		2,323		41
Total Participation Notes (Cost $446)				518
Short-Term Investment (4.0%)
Investment Company (4.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $419)		419,248		419
Total Investments (101.1%) (Cost $10,209) (c)				10,595
Liabilities in Excess of Other Assets (-1.1%)				(117	)
Net Assets (100.0%)			$	10,478

(a) Security trades on the Hong Kong exchange.

(b) Non-income producing security.

(c) The approximate fair value and percentage of net assets, $8,846,000 and 84.4%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

NVDR Non-Voting Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		58.2	%
Banks		19.5
Semiconductors & Semiconductor Equipment		11.2
Internet Software & Services		6.0
Wireless Telecommunication Services		5.1
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Asian Equity Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $9,790)	$	10,176
Investment in Security of Affiliated Issuer, at Value (Cost $419)		419
Total Investments in Securities, at Value (Cost $10,209)		10,595
Foreign Currency, at Value (Cost $2)		2
Due from Adviser		48
Receivable for Investments Sold		8
Dividends Receivable		4
Receivable from Affiliate		—	@
Other Assets		30
Total Assets		10,687
Liabilities:
Payable for Investments Purchased		129
Payable for Professional Fees		47
Payable for Custodian Fees		16
Payable for Portfolio Shares Redeemed		4
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		9
Total Liabilities		209
Net Assets	$	10,478
Net Assets Consist Of:
Paid-in-Capital	$	10,095
Distributions in Excess of Net Investment Income		(7	)
Accumulated Net Realized Gain		4
Unrealized Appreciation (Depreciation) on:
Investments		386
Foreign Currency Translations		(—	@)
Net Assets	$	10,478
CLASS I:
Net Assets	$	8,340
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		807,399
Net Asset Value, Offering and Redemption Price Per Share	$	10.33
CLASS A:
Net Assets	$	2,024
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		196,331
Net Asset Value, Redemption Price Per Share	$	10.31
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.57
Maximum Offering Price Per Share	$	10.88
CLASS L:
Net Assets	$	114
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		11,178
Net Asset Value, Offering and Redemption Price Per Share	$	10.22

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Asian Equity Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $18 of Foreign Taxes Withheld)	$	187
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		187
Expenses:
Custodian Fees (Note F)		133
Professional Fees		110
Advisory Fees (Note B)		79
Registration Fees		26
Pricing Fees		11
Shareholder Reporting Fees		10
Administration Fees (Note C)		7
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Shareholder Services Fees — Class A (Note D)		5
Distribution and Shareholder Services Fees — Class L (Note D)		1
Directors' Fees and Expenses		2
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class L		—	@
Other Expenses		9
Total Expenses		399
Expenses Reimbursed by Adviser (Note B)		(186	)
Waiver of Advisory Fees (Note B)		(79	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		129
Net Investment Income		58
Realized Gain (Loss):
Investments Sold (Net of approximately $—@ of Capital Gain Country Tax)		788
Foreign Currency Transactions		(5	)
Net Realized Gain		783
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of approximately $2)		78
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		78
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		861
Net Increase in Net Assets Resulting from Operations	$	919

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Asian Equity Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	58		$	33
Net Realized Gain		783			297
Net Change in Unrealized Appreciation (Depreciation)		78			(215	)
Net Increase in Net Assets Resulting from Operations		919			115
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(47	)		(36	)
Net Realized Gain		(696	)		—
*Class A:**
Net Investment Income		(11	)		(5	)
Net Realized Gain		(246	)		—
*Class H:**
Net Investment Income		—			(—	@)**
Class L:
Net Investment Income		(—	@)		(—	@)
Net Realized Gain		(16	)		—
Total Distributions		(1,016	)		(41	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		5,728			4,125
Distributions Reinvested		560			28
Redeemed		(2,673	)		(3,473	)
*Class A:**
Subscribed		943			165
Distributions Reinvested		227			5
Conversion from Class H		—			98
Redeemed		(374	)		(171	)
*Class H:**
Conversion to Class A		—			(98	)**
Class L:
Subscribed		62			—
Distributions Reinvested		1			—
Redeemed		(57	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		4,417			679
Redemption Fees		1			—
Total Increase in Net Assets		4,321			753
Net Assets:
Beginning of Period		6,157			5,404
End of Period (Including Distributions in Excess of Net Investment Income of $(7) and $(18))	$	10,478		$	6,157

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Asian Equity Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		531			399
Shares Issued on Distributions Reinvested		53			3
Shares Redeemed		(237	)		(326	)
Net Increase in Class I Shares Outstanding		347			76
*Class A:**
Shares Subscribed		80			17
Shares Issued on Distributions Reinvested		22			—	@@
Conversion from Class H		—			10
Shares Redeemed		(32	)		(17	)
Net Increase in Class A Shares Outstanding		70			10
*Class H:**
Conversion to Class A		—			(10	)**
Class L:
Shares Subscribed		6			—
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(5	)		—
Net Increase in Class L Shares Outstanding		1			—

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Asian Equity Portfolio

	Class I
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	10.33		$	10.40		$	8.47		$	10.19		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.09			0.05			0.04			0.00	‡		(0.00	)‡
Net Realized and Unrealized Gain (Loss)		1.44			(0.05	)		2.00			(1.72	)		0.19
Total from Investment Operations		1.53			(0.00	)‡		2.04			(1.72	)		0.19
Distributions from and/or in Excess of:
Net Investment Income		(0.10	)		(0.07	)		(0.11	)		—			—
Net Realized Gain		(1.43	)		—			—			—			—
Total Distributions		(1.53	)		(0.07	)		(0.11	)		—			—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	10.33		$	10.33		$	10.40		$	8.47		$	10.19
Total Return++		15.15	%		(0.05	)%		24.08	%		(16.88	)%		1.90	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,340		$	4,753		$	3,996		$	1,201		$	1,223
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.45	%+		1.45	%+		1.45	%+		1.45	%+		1.45	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.81	%+		0.52	%+		0.39	%+		0.01	%+		(1.34	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		86	%		114	%		80	%		38	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		4.68	%		4.28	%		5.79	%		11.86	%		176.73	%*
Net Investment Loss to Average Net Assets		(2.42	)%		(2.31	)%		(3.95	)%		(10.40	)%		(176.62	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Asian Equity Portfolio

	Class A@
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	10.31		$	10.37		$	8.45		$	10.19		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.05			0.01			0.01			(0.02	)		(0.00	)‡
Net Realized and Unrealized Gain (Loss)		1.44			(0.03	)		2.00			(1.72	)		0.19
Total from Investment Operations		1.49			(0.02	)		2.01			(1.74	)		0.19
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.04	)		(0.09	)		—			—
Net Realized Gain		(1.43	)		—			—			—			—
Total Distributions		(1.49	)		(0.04	)		(0.09	)		—			—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	10.31		$	10.31		$	10.37		$	8.45		$	10.19
Total Return++		14.71	%		(0.15	)%		23.76	%		(17.08	)%		1.90	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,024		$	1,302		$	1,201		$	84		$	102
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.80	%+		1.73	%+^^		1.70	%+		1.70	%+		1.70	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.46	%+		0.09	%+		0.14	%+		(0.24	)%+		(1.59	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		86	%		114	%		80	%		38	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		5.05	%		4.68	%		6.04	%		12.11	%		176.98	%*
Net Investment Loss to Average Net Assets		(2.79	)%		(2.86	)%		(4.20	)%		(10.65	)%		(176.87	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.80% for Class A Shares. Prior to September 16, 2013, the maximum ratio was 1.70% for Class A Shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Asian Equity Portfolio

	Class L
	Year Ended December 31,												Period from December 28, 2010^ to December 31,
Selected Per Share Data and Ratios	2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	10.23		$	10.31		$	8.40		$	10.19		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.00	)‡		(0.04	)		(0.03	)		(0.07	)		(0.00	)‡
Net Realized and Unrealized Gain (Loss)		1.42			(0.03	)		1.98			(1.72	)		0.19
Total from Investment Operations		1.42			(0.07	)		1.95			(1.79	)		0.19
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)‡		(0.01	)		(0.04	)		—			—
Net Realized Gain		(1.43	)		—			—			—			—
Total Distributions		(1.43	)		(0.01	)		(0.04	)		—			—
Redemption Fees		0.00	‡		—			—			—			—
Net Asset Value, End of Period	$	10.22		$	10.23		$	10.31		$	8.40		$	10.19
Total Return++		13.97	%		(0.56	)%		23.18	%		(17.57	)%		1.90	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	114		$	102		$	103		$	84		$	102
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.30	%+		2.22	%+^^		2.20	%+		2.20	%+		2.20	%*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.04	)%+		(0.35	)%+		(0.36	)%+		(0.74	)%+		(2.09	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		86	%		114	%		80	%		38	%		0.00	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		6.75	%		5.59	%		6.54	%		12.61	%		177.48	%*
Net Investment Loss to Average Net Assets		(4.49	)%		(3.72	)%		(4.70	)%		(11.15	)%		(177.37	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.30% for Class L shares. Prior to September 16, 2013, the maximum ratio was 2.20% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Asian Equity Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-adviser, Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), seek long-term capital appreciation by investing primarily in equity securities of companies in the Asia-Pacific region, excluding Japan. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the

times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	99	$	—	$	99
Automobiles		95		281		—		376
Banks		216		1,747		—		1,963
Beverages		—		28		—		28
Chemicals		—		39		—		39
Commercial Services & Supplies		—		44		—		44
Construction & Engineering		—		82		—		82
Construction Materials		79		—		—		79
Diversified Consumer Services		27		—		—		27
Diversified Financial Services		—		310		—		310
Diversified Telecommunication Services		—		246		—		246
Electronic Equipment, Instruments & Components		—		146		—		146
Energy Equipment & Services		—		127		—		127
Food Products		—		290		—		290
Health Care Equipment & Supplies		—		42		—		42
Health Care Providers & Services		—		155		—		155
Hotels, Restaurants & Leisure		—		153		—		153
Household Durables		—		174		—		174
Independent Power Producers & Energy Traders		—		73		—		73
Industrial Conglomerates		—		312		—		312
Information Technology Services		98		—		—		98
Insurance		—		442		—		442
Internet & Catalog Retail		50		27		—		77
Internet Software & Services		30		605		—		635
Media		—		137		—		137

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Metals & Mining	$	—	$	11	$	—	$	11
Multi-line Retail		—		49		—		49
Oil, Gas & Consumable Fuels		—		57		—		57
Personal Products		—		162		—		162
Pharmaceuticals		—		262		—		262
Professional Services		—		64		—		64
Real Estate Management & Development		—		399		—		399
Semiconductors & Semiconductor Equipment		—		1,182		—		1,182
Software		—		90		—		90
Specialty Retail		—		133		—		133
Tech Hardware, Storage & Peripherals		—		60		—		60
Textiles, Apparel & Luxury Goods		—		231		—		231
Tobacco		68		—		—		68
Transportation Infrastructure		—		81		—		81
Wireless Telecommunication Services		—		506		—		506
Total Common Stocks		663		8,846		—		9,509
Warrants		1		—		—		1
Investment Company		148		—		—		148
Participation Notes		—		518		—		518
Short-Term Investment
Investment Company		419		—		—		419
Total Assets	$	1,231	$	9,364	$	—	$	10,595

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $5,393,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

of foreign securities markets and the possibility of political or economic instability.

4. Structured Investments: The Portfolio invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Portfolio will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

5. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares and Class L shares, which is paid directly to the Portfolio, for shares re-

deemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

7. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

First $1 billion				Over $1 billion
	0.95	%			0.90	%

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.45% for Class I shares, 1.80% for Class A shares and 2.30% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $79,000 of advisory fees were waived and approximately $191,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Portfolio with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Portfolio.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $10,236,000 and $6,977,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	85			$	7,981			$	7,647			$	—	@		$	419

@ Amount is less than $500.

During the year ended December 31, 2014, the Portfolio incurred less than $500 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator, Sub-Adviser and Distributor, for portfolio transactions executed on behalf of the Portfolio.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	656	$	360	$	38	$	3

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in Capital (000)
$	11			$	(11	)		$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	4			$	87

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $10,294,000. The aggregate gross unrealized appreciation is approximately $721,000 and the aggregate gross unrealized depreciation is approximately $420,000 resulting in net unrealized appreciation of approximately $301,000.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	—			$	7

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 37% and 84%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Asian Equity Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Asian Equity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Asian Equity Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014.

The Portfolio designated and paid approximately $361,000 as a long-term capital gain distribution.

The Portfolio intends to pass through foreign tax credits of approximately $18,000 and has derived net income from sources within foreign countries amounting to approximately $201,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIAEANN
1111629 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Insight Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					8
Statement of Operations					9
Statements of Changes in Net Assets					10
Financial Highlights					11
Notes to Financial Statements					14
Report of Independent Registered Public Accounting Firm					21
Federal Tax Notice					22
U.S. Privacy Policy					23
Director and Officer Information					26

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Insight Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Insight Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Insight Portfolio Class I	$	1,000.00	$	1,042.30	$	1,019.91	$	5.41	$	5.35		1.05	%
Insight Portfolio Class A		1,000.00		1,041.10		1,018.15		7.20		7.12		1.40
Insight Portfolio Class L		1,000.00		1,038.70		1,015.63		9.76		9.65		1.90

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Insight Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 6.66%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the Russell 3000® Value Index (the "Index"), which returned 12.70%.

Factors Affecting Performance

• Value stocks, as measured by the Index, performed well during the period, with a number of sectors posting double-digit gains. Utilities, information technology (IT) and health care were the top-performing sectors in the Index, while energy (with a negative return), telecommunication services and materials lagged the most.

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• Both stock selection and an underweight position in the financials sector dampened relative performance, primarily due to the Portfolio's lack of exposure to banks and real estate investment trusts (REITs), two groups that performed well during the period.

• The materials sector also weighed on relative returns, with unfavorable results from both stock selection and an overweight in the sector. The main laggard in the sector was a holding in a manufacturer of specialty cellulose, which is used in a range of applications from pharmaceuticals and food additives to textiles and liquid crystal display (LCD) screens.

• The energy sector was a positive contributor to performance, due to a significant underweight and good stock selection there. The Portfolio held two stocks, both of which added to performance during the period.

• Stock selection in the health care sector boosted relative performance. The largest contributor in the overall Portfolio was a surgical robotics systems maker, which performed well after it saw a surprising increase in procedure growth and shipments of a recently updated product.

• Stock selection in the consumer discretionary sector was beneficial to performance. Leading performers included a pet supplies and services retailer and a restaurant chain operator, the fourth- and fifth-largest contributors to performance in the overall Portfolio, respectively.

Management Strategies

• There were no changes to our bottom-up investment process during the period. We seek to invest primarily in established and cyclical franchise companies that we believe have strong name recognition, sustainable competitive advantages, and ample growth prospects, and are trading at an attractive discount to future cash flow generation capacity or asset value. We typically favor companies with the ability to generate attractive free cash flow yields. We utilize a bottom-up stock selection process, seeking attractive investments on an individual company basis. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Insight Portfolio

outlook for companies owned in the Portfolio; accordingly, we have had very little turnover in the Portfolio to date, as our ongoing work reaffirms our assessment of quality and competitive advantage in the names we own.

* Minimum Investment for Class I shares

** Commenced Operations on December 28, 2011.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the Russell 3000^® Value Index⁽¹⁾ and the Lipper Mid-Cap Core Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		6.66	%		—		—		24.16	%
Russell 3000^® Value Index		12.70			—		—		20.91
Lipper Mid-Cap Core Funds Index		8.89			—		—		19.87
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		6.41			—		—		23.84
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		0.85			—		—		21.66
Russell 3000^® Value Index		12.70			—		—		20.91
Lipper Mid-Cap Core Funds Index		8.89			—		—		19.87
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		5.83			—		—		23.22
Russell 3000^® Value Index		12.70			—		—		20.91
Lipper Mid-Cap Core Funds Index		8.89			—		—		19.87

⁽¹⁾ The Russell 3000^® Value Index measures the performance of those companies in the Russell 3000^® Index with lower price-to-book ratios and lower forecasted growth values. The Russell 3000^® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Mid-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Mid-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Mid-Cap Core Funds classification.

⁽⁴⁾ Commenced operations on December 28, 2011.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Insight Portfolio

	Shares		Value (000)
Common Stocks (90.9%)
Air Freight & Logistics (2.0%)
Expeditors International of Washington, Inc.		995	$	44
Beverages (0.7%)
Big Rock Brewery, Inc. (Canada)		1,422		16
Chemicals (4.9%)
Mosaic Co. (The)		1,987		91
Rayonier Advanced Materials		893		20
				111
Diversified Financial Services (7.9%)
Berkshire Hathaway, Inc., Class B (a)		612		92
Leucadia National Corp.		1,903		43
McGraw Hill Financial, Inc.		487		43
				178
Electronic Equipment, Instruments & Components (2.0%)
Universal Display Corp. (a)		1,624		45
Energy Equipment & Services (2.6%)
Dresser-Rand Group, Inc. (a)		715		58
Food Products (5.9%)
Nestle SA ADR (Switzerland)		1,827		133
Health Care Equipment & Supplies (10.2%)
Abbott Laboratories		2,008		91
Intuitive Surgical, Inc. (a)		263		139
				230
Hotels, Restaurants & Leisure (0.5%)
Ignite Restaurant Group, Inc. (a)		1,492		12
Household Durables (2.1%)
NVR, Inc. (a)		36		46
Industrial Conglomerates (6.0%)
Koninklijke Philips N.V. (Netherlands)		4,598		133
Information Technology Services (1.9%)
Automatic Data Processing, Inc.		520		43
Insurance (17.0%)
Arch Capital Group Ltd. (a)		1,918		113
Platinum Underwriters Holdings Ltd.		609		45
Progressive Corp. (The)		4,985		135
RenaissanceRe Holdings Ltd.		917		89
				382
Internet & Catalog Retail (4.6%)
Amazon.com, Inc. (a)		270		84
zulily, Inc., Class A (a)(b)		780		18
				102
Internet Software & Services (6.0%)
eBay, Inc. (a)		1,663		93
Pandora Media, Inc. (a)		2,342		42
				135
Media (6.2%)
News Corp., Class A (a)		2,927		46
Time Warner, Inc.		1,097		94
				140

	Shares		Value (000)
Software (3.9%)
Solera Holdings, Inc.		1,693	$	87
Specialty Retail (4.4%)
PetSmart, Inc.		1,211		98
Trading Companies & Distributors (2.1%)
Fastenal Co.		998		47
Total Common Stocks (Cost $1,841)				2,040
Warrants (0.0%)
Real Estate Management & Development (0.0%)
Tejon Ranch Co. (a) (Cost $1)		119		—	@
	Shares
Short-Term Investments (9.2%)
Securities held as Collateral on Loaned Securities (0.7%)
Investment Company (0.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		15,323		15
	Face Amount (000)
Repurchase Agreement (0.1%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $2; fully collateralized by various U.S. Government obligations; 2.13% — 4.25% due 1/31/21 — 11/15/40; valued at $2)	$	2		2
Total Securities held as Collateral on Loaned Securities (Cost $17)				17
	Shares
Investment Company (8.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $191)		190,635		191
Total Short-Term Investments (Cost $208)				208
Total Investments (100.1%) (Cost $2,050) Including $18 of Securities Loaned				2,248
Liabilities in Excess of Other Assets (-0.1%)				(3	)
Net Assets (100.0%)			$	2,245

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2014.

@ Value is less than $500.

ADR American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Insight Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		26.6	%
Insurance		17.1
Health Care Equipment & Supplies		10.3
Short-Term Investment		8.6
Diversified Financial Services		8.0
Media		6.3
Internet Software & Services		6.1
Food Products		6.0
Industrial Conglomerates		6.0
Chemicals		5.0
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Insight Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $1,844)	$	2,042
Investment in Security of Affiliated Issuer, at Value (Cost $206)		206
Total Investments in Securities, at Value (Cost $2,050)		2,248
Cash		2
Due from Adviser		34
Dividends Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		27
Total Assets		2,311
Liabilities:
Payable for Professional Fees		39
Collateral on Securities Loaned, at Value		18
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Custodian Fees		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Administration Fees		—	@
Other Liabilities		5
Total Liabilities		66
Net Assets	$	2,245
Net Assets Consist Of:
Paid-in-Capital	$	1,912
Accumulated Undistributed Net Investment Income		3
Accumulated Net Realized Gain		132
Unrealized Appreciation (Depreciation) on:
Investments		198
Foreign Currency Translations		—	@
Net Assets	$	2,245
CLASS I:
Net Assets	$	1,968
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		144,166
Net Asset Value, Offering and Redemption Price Per Share	$	13.65
CLASS A:
Net Assets	$	230
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		16,830
Net Asset Value, Redemption Price Per Share	$	13.66
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.76
Maximum Offering Price Per Share	$	14.42
CLASS L:
Net Assets	$	47
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		3,458
Net Asset Value, Offering and Redemption Price Per Share	$	13.50
⁽¹⁾ Including: Securities on Loan, at Value:	$	18

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Insight Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	30
Interest from Securities of Unaffiliated Issuers		1
Income from Securities Loaned — Net		1
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		32
Expenses:
Professional Fees		94
Registration Fees		21
Advisory Fees (Note B)		17
Shareholder Reporting Fees		15
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Custodian Fees (Note F)		5
Pricing Fees		3
Administration Fees (Note C)		2
Shareholder Services Fees — Class A (Note D)		1
Distribution and Shareholder Services Fees — Class L (Note D)		1
Directors' Fees and Expenses		1
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class L		—	@
Other Expenses		3
Total Expenses		170
Expenses Reimbursed by Adviser (Note B)		(123	)
Waiver of Advisory Fees (Note B)		(17	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		24
Net Investment Income		8
Realized Gain:
Investments Sold		353
Foreign Currency Transactions		—	@
Net Realized Gain		353
Change in Unrealized Appreciation (Depreciation):
Investments		(220	)
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(220	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		133
Net Increase in Net Assets Resulting from Operations	$	141

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Insight Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	8		$	19
Net Realized Gain		353			270
Net Change in Unrealized Appreciation (Depreciation)		(220	)		284
Net Increase in Net Assets Resulting from Operations		141			573
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(5	)		(18	)
Net Realized Gain		(331	)		(113	)
*Class A:**
Net Investment Income		(—	@)		(1	)
Net Realized Gain		(38	)		(13	)
Class L:
Net Investment Income		(—	@)		(1	)
Net Realized Gain		(9	)		(7	)
Total Distributions		(383	)		(153	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		—			1,451
Distributions Reinvested		335			129
Redeemed		(11	)		(3	)
*Class A:**
Subscribed		25			43
Distributions Reinvested		35			13
Redeemed		(16	)		(1,131	)
Class L:
Subscribed		—			151
Distributions Reinvested		6			7
Redeemed		(70	)		(65	)
Net Increase in Net Assets Resulting from Capital Share Transactions		304			595
Total Increase in Net Assets		62			1,015
Net Assets:
Beginning of Period		2,183			1,168
End of Period (Including Accumulated Undistributed Net Investment Income of $3 and $132)	$	2,245		$	2,183
(1) Capital Share Transactions:
Class I:
Shares Subscribed		—			111
Shares Issued on Distributions Reinvested		24			9
Shares Redeemed		(1	)		(—	@@)
Net Increase in Class I Shares Outstanding		23			120
*Class A:**
Shares Subscribed		2			3
Shares Issued on Distributions Reinvested		2			1
Shares Redeemed		(1	)		(87	)
Net Increase (Decrease) in Class A Shares Outstanding		3			(83	)
Class L:
Shares Subscribed		—			11	@
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(4	)		(4	)
Net Increase (Decrease) in Class L Shares Outstanding		(4	)		7

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class H shares were renamed Class A shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Insight Portfolio

	Class I
	Year Ended December 31,									Period from December 28, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	15.40		$	11.86		$	10.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.06			0.18			0.17			(0.00	)‡
Net Realized and Unrealized Gain		0.87			4.52			2.59			0.06
Total from Investment Operations		0.93			4.70			2.76			0.06
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		(0.16	)		(0.14	)		—
Net Realized Gain		(2.64	)		(1.00	)		(0.82	)		—
Total Distributions		(2.68	)		(1.16	)		(0.96	)		—
Net Asset Value, End of Period	$	13.65		$	15.40		$	11.86		$	10.06
Total Return++		6.66	%		40.20	%		27.47	%		0.60	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,968		$	1,859		$	12		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.04	%+		1.04	%+		1.04	%+		1.05	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.44	%+		1.25	%+		1.47	%+		(0.94	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.01	%		N/A
Portfolio Turnover Rate		82	%		51	%		62	%		0	%#
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		7.69	%		10.83	%		11.61	%		380.17	%*
Net Investment Loss to Average Net Assets		(6.21	)%		(8.54	)%		(9.10	)%		(380.06	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Insight Portfolio

	Class A@
	Year Ended December 31,									Period from December 28, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	15.43		$	11.86		$	10.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.01			0.07			0.14			(0.00	)‡
Net Realized and Unrealized Gain		0.87			4.58			2.59			0.06
Total from Investment Operations		0.88			4.65			2.73			0.06
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.08	)		(0.11	)		—
Net Realized Gain		(2.64	)		(1.00	)		(0.82	)		—
Total Distributions		(2.65	)		(1.08	)		(0.93	)		—
Net Asset Value, End of Period	$	13.66		$	15.43		$	11.86		$	10.06
Total Return++		6.41	%		39.73	%		27.21	%		0.60	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	230		$	209		$	1,144		$	815
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.39	%+		1.30	%+^^		1.29	%+		1.30	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.09	%+		0.50	%+		1.22	%+		(1.19	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.01	%		N/A
Portfolio Turnover Rate		82	%		51	%		62	%		0	%#
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		8.91	%		13.79	%		11.86	%		380.42	%*
Net Investment Loss to Average Net Assets		(7.43	)%		(11.99	)%		(9.35	)%		(380.31	)%*

@ Effective September 9, 2013, Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.30% for Class A shares.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Insight Portfolio

	Class L
	Year Ended December 31,									Period from December 28, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	15.35		$	11.85		$	10.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.06	)		0.08			0.08			(0.00	)‡
Net Realized and Unrealized Gain		0.86			4.49			2.58			0.06
Total from Investment Operations		0.80			4.57			2.66			0.06
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.07	)		(0.05	)		—
Net Realized Gain		(2.64	)		(1.00	)		(0.82	)		—
Total Distributions		(2.65	)		(1.07	)		(0.87	)		—
Net Asset Value, End of Period	$	13.50		$	15.35		$	11.85		$	10.06
Total Return++		5.83	%		39.13	%		26.52	%		0.60	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	47		$	115		$	12		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.89	%+		1.84	%+^^		1.79	%+		1.80	%*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.41	)%+		0.54	%+		0.72	%+		(1.70	)%*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.01	%		N/A
Portfolio Turnover Rate		82	%		51	%		62	%		0	%#
⁽¹⁾Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		10.64	%		12.31	%		12.36	%		380.92	%*
Net Investment Loss to Average Net Assets		(9.16	)%		(9.93	)%		(9.85	)%		(380.82	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Insight Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established and cyclical franchise companies with market capitalizations within the range of companies included in the Russell 3000® Value Index. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which

valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) certain portfolio securities may be valued by an outside pricing service approved by the Directors. The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	44	$	—	$	—	$	44
Beverages		16		—		—		16
Chemicals		111		—		—		111
Diversified Financial Services		178		—		—		178
Electronic Equipment, Instruments & Components		45		—		—		45
Energy Equipment & Services		58		—		—		58
Food Products		133		—		—		133
Health Care Equipment & Supplies		230		—		—		230
Hotels, Restaurants & Leisure		12		—		—		12
Household Durables		46		—		—		46
Industrial Conglomerates		133		—		—		133
Information Technology Services		43		—		—		43
Insurance		382		—		—		382
Internet & Catalog Retail		102		—		—		102

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Internet Software & Services	$	135		$	—	$	—	$	135
Media		140			—		—		140
Software		87			—		—		87
Specialty Retail		98			—		—		98
Trading Companies & Distributors		47			—		—		47
Total Common Stocks		2,040			—		—		2,040
Warrants		—	@		—		—		—	@
Short-Term Investments
Investment Company		206			—		—		206
Repurchase Agreement		—			2		—		2
Total Short-Term Investments		206			2		—		208
Total Assets	$	2,246		$	2	$	—	$	2,248

@ Value is less than $500.

investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

— investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

— investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	18	(a)	$	—	$	(18	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Portfolio received cash collateral of approximately $18,000, of which approximately $17,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $1,000, which is not reflected in the Portfolio of Investments.

6. Structured Investments: The Portfolio invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Portfolio will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

7. Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

First $750 million				Next $750 million				Over $1.5 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.05% for Class I shares, 1.40% for Class A shares and 1.90% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $17,000 of advisory fees were waived and approximately $129,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $1,654,000 and $1,678,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	210			$	1,053			$	1,057			$	—	@		$	206

@ Amount is less than $500.

and are accrued based on the value of investments denominated in such currency.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	82	$	301	$	79	$	74

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	(1	)		$	1			$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	47			$	90

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $2,052,000. The aggregate gross unrealized appreciation is approximately $256,000 and the aggregate gross unrealized depreciation is approximately $60,000 resulting in net unrealized appreciation of approximately $196,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 19%, 82% and 71%, for Class I, Class A and Class L shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Insight Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Insight Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Insight Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 18.2% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $301,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIINSGTANN
1110106 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Insight Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					6
Statement of Assets and Liabilities					8
Statement of Operations					9
Statements of Changes in Net Assets					10
Financial Highlights					11
Notes to Financial Statements					14
Report of Independent Registered Public Accounting Firm					21
Federal Tax Notice					22
U.S. Privacy Policy					23
Director and Officer Information					26

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Insight Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Insight Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Insight Portfolio Class I	$	1,000.00	$	938.60	$	1,018.40	$	6.60	$	6.87		1.35	%
Global Insight Portfolio Class A		1,000.00		936.90		1,016.64		8.30		8.64		1.70
Global Insight Portfolio Class L		1,000.00		935.00		1,014.12		10.73		11.17		2.20

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Insight Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of -2.65%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI All Country World Index (the "Index"), which returned 4.16%.

Factors Affecting Performance

• The Portfolio's overall underperformance relative to the Index was driven by stock selection.

• Stock selection in the financials sector hurt relative performance. The overall Portfolio's second largest detractor was a holding in a Brazilian real estate developer.

• Both an underweight position and stock selection in the information technology (IT) sector dampened relative returns. The Portfolio's underperformance was driven by weak performance from a holding in a communications equipment maker and the Portfolio's lack of exposure to the technology hardware, storage and peripherals group, which performed well in the Index.

• The Portfolio's holding in the energy sector benefited relative performance, due to a significant underweight and good stock selection there. The Portfolio's third-largest contributor was an oil and gas equipment manufacturer.

• Stock selection in the health care sector boosted relative performance. The top contributor in the overall Portfolio was a surgical robotics systems maker, which performed well after it saw a surprising increase in procedure growth and shipments of a recently updated product. The Portfolio's second largest contributor was a developer of medicines and vaccines for companion animals and livestock.

• The telecommunication services sector added to relative gains, with an underweight allocation and stock selection both favorable during the period. Performance was led by a holding in a Dutch landline and mobile company.

Management Strategies

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Insight Portfolio

capacity or asset value. We typically favor companies with the ability to generate attractive free cash flow yields. We utilize a bottom-up stock selection process, seeking attractive investments on an individual company basis. Our emphasis is on secular growth, and as a result short-term market events are not as meaningful in the stock selection process.

* Minimum Investment for Class I shares

** Commenced Operations on December 28, 2011.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the MSCI All Country World Index⁽¹⁾ and the Lipper Global Small/Mid-Cap Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		–2.65	%		—		—		18.03	%
MSCI All Country World Index		4.16			—		—		14.49
Lipper Global Small/Mid-Cap Funds Index		–0.38			—		—		13.76
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		–2.97			—		—		17.70
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–8.09			—		—		15.63
MSCI All Country World Index		4.16			—		—		14.49
Lipper Global Small/Mid-Cap Funds Index		–0.38			—		—		13.76
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		–3.43			—		—		17.10
MSCI All Country World Index		4.16			—		—		14.49
Lipper Global Small/Mid-Cap Funds Index		–0.38			—		—		13.76

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Performance assumes that all dividends and distributions, if any, were reinvested. For the most recent month-end performance figures, please visit www.morganstanley.com/im. Investment return and principal value will fluctuate so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Total returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of Portfolio shares. Performance of share classes will vary due to difference in expenses.

⁽²⁾ The Lipper Global Small/MidCap Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Small/Mid-Cap Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Global Small/Mid-Cap Funds classification.

⁽⁴⁾ Commenced operations on December 28, 2011.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Insight Portfolio

	Shares		Value (000)
Common Stocks (96.7%)
Australia (2.0%)
DuluxGroup Ltd.		7,232	$	34
Brazil (2.9%)
JHSF Participacoes SA		27,643		24
Tegma Gestao Logistica		2,182		13
Vale SA (Preference)		1,674		12
				49
Canada (1.4%)
Second Cup Ltd. (The)		9,262		24
China (1.9%)
Jumei International Holding Ltd. ADR (a)		2,458		33
France (13.7%)
Accor SA		668		30
Christian Dior SA		722		123
Eurazeo SA		968		68
Hermes International		38		13
				234
Germany (4.0%)
ThyssenKrupp AG (a)		1,294		33
Zalando SE (a)(b)(c)		1,157		36
				69
Greece (0.9%)
Titan Cement Co., SA (Preference)		1,462		15
Ireland (0.8%)
Mincon Group PLC		17,505		13
Italy (8.0%)
Davide Campari-Milano SpA		4,319		27
Moncler SpA		2,400		32
Tamburi Investment Partners SpA		24,879		79
				138
Japan (2.9%)
MISUMI Group, Inc.		1,500		49
Netherlands (4.7%)
Koninklijke Philips N.V.		2,784		81
Nigeria (1.8%)
Guinness Nigeria PLC		33,319		31
Singapore (1.9%)
Mandarin Oriental International Ltd.		20,000		33
Spain (1.6%)
Baron de Ley (a)		303		28
Sweden (5.1%)
Byggmax Group AB		3,996		27
Investment AB Kinnevik		1,878		61
				88
Switzerland (4.5%)
Nestle SA (Registered)		1,044		77
United Kingdom (4.8%)
Daily Mail & General Trust PLC		3,901		50
Just Eat PLC (a)		6,905		33
				83

	Shares		Value (000)
United States (33.8%)
Amazon.com, Inc. (a)		103	$	32
Arch Capital Group Ltd. (a)		578		34
Dresser-Rand Group, Inc. (a)		582		48
eBay, Inc. (a)		628		35
Intuitive Surgical, Inc. (a)		262		139
Mosaic Co. (The)		657		30
News Corp., Class A (a)		1,745		27
Progressive Corp. (The)		4,116		111
Rayonier Advanced Materials		663		15
RenaissanceRe Holdings Ltd.		351		34
Solera Holdings, Inc.		668		34
Time Warner, Inc.		465		40
				579
Total Common Stocks (Cost $1,610)				1,658
Short-Term Investments (8.0%)
Securities held as Collateral on Loaned Securities (1.9%)
Investment Company (1.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		29,905		30
	Face Amount (000)
Repurchase Agreement (0.2%)
Merrill Lynch & Co., Inc., (0.03%, dated 12/31/14, due 1/2/15; proceeds $3; fully collateralized by various U.S. Government obligations; 2.13% — 4.25% due 1/31/21 — 11/15/40; valued at $3)	$	3		3
Total Securities held as Collateral on Loaned Securities (Cost $33)				33
	Shares
Investment Company (6.1%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $105)		104,770		105
Total Short-Term Investments (Cost $138)				138
Total Investments (104.7%) (Cost $1,748) Including $34 of Securities Loaned (d)				1,796
Liabilities in Excess of Other Assets (-4.7%)				(81	)
Net Assets (100.0%)			$	1,715

(a) Non-income producing security.

(b) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d) The approximate fair value and percentage of net assets, $978,000 and 57.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Global Insight Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		46.8	%
Insurance		10.2
Textiles, Apparel & Luxury Goods		9.5
Health Care Equipment & Supplies		7.9
Diversified Financial Services		7.3
Media		6.6
Short-Term Investment		6.0
Internet & Catalog Retail		5.7
Total Investments		100.0	%

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of December 31, 2014.

** Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Insight Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $1,613)	$	1,661
Investment in Security of Affiliated Issuer, at Value (Cost $135)		135
Total Investments in Securities, at Value (Cost $1,748)		1,796
Foreign Currency, at Value (Cost $1)		1
Cash		3
Receivable for Investments Sold		126
Due from Adviser		39
Dividends Receivable		1
Tax Reclaim Receivable		1
Receivable from Affiliate		—	@
Other Assets		26
Total Assets		1,993
Liabilities:
Payable for Investments Purchased		190
Payable for Professional Fees		42
Collateral on Securities Loaned, at Value		36
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Custodian Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Administration Fees		—	@
Other Liabilities		6
Total Liabilities		278
Net Assets	$	1,715
Net Assets Consist Of:
Paid-in-Capital	$	1,649
Distributions in Excess of Net Investment Income		(18	)
Accumulated Net Realized Gain		36
Unrealized Appreciation (Depreciation) on:
Investments		48
Foreign Currency Translations		(—	@)
Net Assets	$	1,715
CLASS I:
Net Assets	$	1,490
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		129,074
Net Asset Value, Offering and Redemption Price Per Share	$	11.55
CLASS A:
Net Assets	$	199
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		17,163
Net Asset Value, Redemption Price Per Share	$	11.58
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.64
Maximum Offering Price Per Share	$	12.22
CLASS L:
Net Assets	$	26
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		2,240
Net Asset Value, Offering and Redemption Price Per Share	$	11.49
⁽¹⁾ Including: Securities on Loan, at Value:	$	34

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Insight Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $3 of Foreign Taxes Withheld)	$	47
Interest from Securities of Unaffiliated Issuers		1
Income from Securities Loaned — Net		1
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		49
Expenses:
Professional Fees		100
Registration Fees		26
Advisory Fees (Note B)		17
Shareholder Reporting Fees		16
Custodian Fees (Note F)		8
Pricing Fees		6
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Directors' Fees and Expenses		2
Administration Fees (Note C)		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class L (Note D)		—	@
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Other Expenses		7
Total Expenses		189
Expenses Reimbursed by Adviser (Note B)		(143	)
Waiver of Advisory Fees (Note B)		(17	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		23
Net Investment Income		26
Realized Gain (Loss):
Investments Sold		167
Foreign Currency Transactions		(1	)
Net Realized Gain		166
Change in Unrealized Appreciation (Depreciation):
Investments		(240	)
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(240	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(74	)
Net Decrease in Net Assets Resulting from Operations	$	(48	)

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Insight Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	26		$	23
Net Realized Gain		166			240
Net Change in Unrealized Appreciation (Depreciation)		(240	)		110
Net Increase (Decrease) in Net Assets Resulting from Operations		(48	)		373
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(13	)		(40	)
Net Realized Gain		(164	)		(156	)
*Class A:**
Net Investment Income		(1	)		(4	)
Net Realized Gain		(22	)		(21	)
Class L:
Net Investment Income		(—	@)		(—	@)
Net Realized Gain		(2	)		(2	)
Total Distributions		(202	)		(223	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		155			1,100
Distributions Reinvested		175			194
Redeemed		(18	)		—
*Class A:**
Subscribed		29			9
Distributions Reinvested		21			23
Redeemed		(12	)		(1,052	)
Class L:
Subscribed		15			—
Distributions Reinvested		1			—
Net Increase in Net Assets Resulting from Capital Share Transactions		366			274
Total Increase in Net Assets		116			424
Net Assets:
Beginning of Period		1,599			1,175
End of Period (Including Distributions in Excess of Net Investment Income of $(18) and $(36))	$	1,715		$	1,599
(1) Capital Share Transactions:
Class I:
Shares Subscribed		11			88
Shares Issued on Distributions Reinvested		15			15
Shares Redeemed		(1	)		—
Net Increase in Class I Shares Outstanding		25			103
*Class A:**
Shares Subscribed		2			1
Shares Issued on Distributions Reinvested		2			2
Shares Redeemed		(1	)		(85	)
Net Increase (Decrease) in Class A Shares Outstanding		3			(82	)
Class L:
Shares Subscribed		1			—
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class L Shares Outstanding		1			—

* Effective September 9, 2013, Class H shares were renamed Class A shares.

@ Amount is less than $500.

@@ Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Insight Portfolio

	Class I
	Year Ended December 31,									Period from December 28, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	13.42		$	11.99		$	10.07		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.20			0.30			0.31			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		(0.56	)		3.32			2.53			0.07
Total from Investment Operations		(0.36	)		3.62			2.84			0.07
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.45	)		(0.49	)		—
Net Realized Gain		(1.40	)		(1.74	)		(0.43	)		—
Total Distributions		(1.51	)		(2.19	)		(0.92	)		—
Net Asset Value, End of Period	$	11.55		$	13.42		$	11.99		$	10.07
Total Return++		(2.65	)%		30.89	%		28.31	%		0.70	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,490		$	1,397		$	12		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.35	%+		1.35	%+		1.35	%+		1.35	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.49	%+		2.17	%+		2.74	%+		(1.27	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		67	%		59	%		41	%		0	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		10.82	%		14.22	%		16.10	%		381.10	%*
Net Investment Loss to Average Net Assets		(7.98	)%		(10.70	)%		(12.01	)%		(381.02	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Insight Portfolio

	Class A@
	Year Ended December 31,									Period from December 28, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	13.45		$	11.99		$	10.07		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.15			0.01			0.28			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		(0.55	)		3.56			2.53			0.07
Total from Investment Operations		(0.40	)		3.57			2.81			0.07
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.37	)		(0.46	)		—
Net Realized Gain		(1.40	)		(1.74	)		(0.43	)		—
Total Distributions		(1.47	)		(2.11	)		(0.89	)		—
Net Asset Value, End of Period	$	11.58		$	13.45		$	11.99		$	10.07
Total Return++		(2.97	)%		30.52	%		28.04	%		0.70	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	199		$	189		$	1,151		$	816
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.70	%+		1.60	%+^^		1.60	%+		1.60	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.14	%+		0.07	%+		2.49	%+		(1.52	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%		0.00	%§		N/A
Portfolio Turnover Rate		67	%		59	%		41	%		0	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		12.14	%		13.62	%		16.35	%		381.35	%*
Net Investment Loss to Average Net Assets		(9.30	)%		(11.95	)%		(12.26	)%		(381.27	)%*

@ Effective September 9, 2013, Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Insight Portfolio

	Class L
	Year Ended December 31,									Period from December 28, 2011^ to
Selected Per Share Data and Ratios	2014			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	13.39		$	11.98		$	10.07		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.08			0.12			0.23			(0.00	)‡
Net Realized and Unrealized Gain (Loss)		(0.54	)		3.37			2.51			0.07
Total from Investment Operations		(0.46	)		3.49			2.74			0.07
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		(0.34	)		(0.40	)		—
Net Realized Gain		(1.40	)		(1.74	)		(0.43	)		—
Total Distributions		(1.44	)		(2.08	)		(0.83	)		—
Net Asset Value, End of Period	$	11.49		$	13.39		$	11.98		$	10.07
Total Return++		(3.43	)%		29.82	%		27.36	%		0.70	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	26		$	13		$	12		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.20	%+		2.13	%+^^		2.10	%+		2.10	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.64	%+		0.93	%+		1.99	%+		(2.01	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.00	%§		N/A
Portfolio Turnover Rate		67	%		59	%		41	%		0	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		20.95	%		17.73	%		16.85	%		381.85	%*
Net Investment Loss to Average Net Assets		(18.11	)%		(14.67	)%		(12.76	)%		(381.76	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Insight Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in established and cyclical franchise companies located throughout the world with market capitalizations within the range of companies included in the MSCI All Country World Index. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (4) when market quotations are not readily

available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these pro-

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

cedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	31	$	55	$	—	$	86
Capital Markets		—		79		—		79
Chemicals		45		34		—		79
Construction Materials		—		15		—		15
Diversified Financial Services		—		129		—		129
Energy Equipment & Services		48		—		—		48
Food Products		—		77		—		77
Health Care Equipment & Supplies		139		—		—		139
Hotels, Restaurants & Leisure		24		63		—		87
Industrial Conglomerates		—		81		—		81
Insurance		179		—		—		179
Internet & Catalog Retail		65		36		—		101

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Internet Software & Services	$	35	$	33	$	—	$	68
Machinery		13		—		—		13
Media		67		50		—		117
Metals & Mining		—		45		—		45
Real Estate Management & Development		—		24		—		24
Road & Rail		—		13		—		13
Software		34		—		—		34
Specialty Retail		—		27		—		27
Textiles, Apparel & Luxury Goods		—		168		—		168
Trading Companies & Distributors		—		49		—		49
Total Common Stocks		680		978		—		1,658
Short-Term Investments
Investment Company		135		—		—		135
Repurchase Agreement		—		3		—		3
Total Short-Term Investments		135		3		—		138
Total Assets	$	815	$	981	$	—	$	1,796

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $647,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Portfolio, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	34	(a)	$	—	$	(34	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Portfolio received cash collateral of approximately $36,000, of which approximately $33,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of December 31, 2014, there was uninvested cash of approximately $3,000, which is not reflected in the Portfolio of Investments.

7. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semiannually. Net realized capital gains, if any, are distributed at least annually.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

First $1 billion				Over $1 billion
	1.00	%			0.95	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.35% for Class I shares, 1.70% for Class A shares and 2.20% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $17,000 of advisory fees were waived and approximately $149,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $1,284,000 and $1,099,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	11			$	842			$	718			$	—	@		$	135

@ Amount is less than $500.

FASB ASC 740-10 Income Taxes — Overall sets forth a minimum threshold for financial statement recognition of the benefit

of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	93	$	109	$	91	$	132

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Gain (000)				Paid-in- Capital (000)
$	6			$	(6	)		$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	34			$	17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $1,781,000. The aggregate gross unrealized appreciation is approximately $194,000 and the aggregate gross unrealized depreciation is approximately $179,000 resulting in net unrealized appreciation of approximately $15,000.

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 11% and 82%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Insight Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Insight Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Insight Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 5.1% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $109,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGIANN
1110935 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets External Debt Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					10
Statement of Operations					11
Statements of Changes in Net Assets					12
Financial Highlights					14
Notes to Financial Statements					18
Report of Independent Registered Public Accounting Firm					25
U.S. Privacy Policy					26
Director and Officer Information					29

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Emerging Markets External Debt Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Emerging Markets External Debt Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets External Debt Portfolio Class I	$	1,000.00	$	954.00	$	1,021.02	$	4.09	$	4.23		0.83	%
Emerging Markets External Debt Portfolio Class A		1,000.00		950.40		1,019.16		5.90		6.11		1.20
Emerging Markets External Debt Portfolio Class L		1,000.00		950.50		1,017.90		7.13		7.38		1.45
Emerging Markets External Debt Portfolio Class IS		1,000.00		953.10		1,021.07		4.04		4.18		0.82

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Emerging Markets External Debt Portfolio

The Portfolio seeks high total return.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 3.38%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the JP Morgan Emerging Markets Bond Global Index (the "Index"), which returned 5.53%.

Factors Affecting Performance

• Despite the setbacks and spreads widening +77 basis points, EM external debt ended the year up +5.53%, as measured by the Index in U.S. dollars.⁽ⁱ⁾ Performance in the Index was driven by the investment grade segment, which returned +9.07%, while the high yield segment detracted -3.21% from the Index's returns. Contrary to the expectations of financial markets, 10-year U.S. Treasury yields fell 86 basis points in the year, aiding the performance of longer-dated assets. Ukrainian bonds were the worst-performing segment in the year, falling 29.8%, as the conflict in the Eastern region took its toll. Oil prices dropping more than 50% over the year sent the bonds of oil producing nations down in the period. Venezuela, Russia, and Ecuador were the hardest hit countries. The drop in oil revenues exacerbated Venezuela's tenuous fiscal situation as the Maduro government was unwilling or unable to enact serious reforms to alleviate the problems. Overall flows into EM external debt reached a total of +$16.3 billion in 2014 (according to JP Morgan data), well below the averages of the previous years, but a rebound from 2013. Given the widening performance differential between external and domestic debt over the past two years, investors have been increasingly passing the asset allocation decision to the professional investment manager, as evidenced by the growing fund flows to blended mandates that combine both external and domestic debt.

• In 2014, the Portfolio's underweight position and security selection in Ukraine, as well as security selection in Indonesia, Peru, and Mexico, contributed to relative performance. Also contributing to relative performance were the Portfolio's overweight positions in Honduras, Mozambique, and Hungary; its underweight positions in Serbia and Ecuador; and an opportunistic investment in Greece.

• With falling oil prices weighing on the markets of oil-producing nations, the Portfolio's overweight position in Venezuela (partially mitigated by security selection), Russia (overweight in the beginning of the year but then reduced to an underweight), and Kazakhstan detracted from relative performance in 2014. Also detracting from relative performance were the Portfolio's underweight positions in Argentina, Turkey,

⁽ⁱ⁾ Source for market data: Bloomberg L.P.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Emerging Markets External Debt Portfolio

Dominican Republic, its zero exposure to Lebanon, and security selection in Colombia and Brazil. The use of U.S. Treasury futures to reduce interest rate duration detracted from performance as U.S. Treasury yields fell in the year.

Management Strategies

U.S. dollar experienced over the past year, as the macroeconomic adjustment towards higher real rates and lower current account deficits has not reached its full conclusion. In this regard, we will be watching policy makers closely to ensure that they recommit to prudent policies during this adjustment process.

* Minimum Investment for Class I shares

** Commenced Operations on May 24, 2012.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Emerging Markets External Debt Portfolio

Performance Compared to the JP Morgan Emerging Markets Bond Global Index⁽¹⁾ and the Lipper Emerging Markets Hard Currency Debt Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		3.38	%		—		—		3.10	%
JP Morgan Emerging Markets Bond Global Index		5.53			—		—		4.59
Lipper Emerging Markets Hard Currency Debt Funds Index		1.40			—		—		3.55
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		2.90			—		—		2.74
Portfolio — Class A Shares with maximum 4.25% sales charges⁽⁴⁾		–1.50			—		—		1.06
JP Morgan Emerging Markets Bond Global Index		5.53			—		—		4.59
Lipper Emerging Markets Hard Currency Debt Funds Index		1.40			—		—		3.55
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		2.85			—		—		2.45
JP Morgan Emerging Markets Bond Global Index		5.53			—		—		4.59
Lipper Emerging Markets Hard Currency Debt Funds Index		1.40			—		—		3.55
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		3.39			—		—		4.11
JP Morgan Emerging Markets Bond Global Index		5.53			—		—		6.36
Lipper Emerging Markets Hard Currency Debt Funds Index		1.40			—		—		3.27

⁽¹⁾ The JP Morgan Emerging Markets Bond Global ("EMBG") Index tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady Bonds, loans, Eurobonds and local market instruments for emerging market countries. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Emerging Markets Hard Currency Debt Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets)

in the Lipper Emerging Markets Hard Currency Debt Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Emerging Markets Hard Currency Debt Funds classification.

⁽³⁾Total returns for the Portfolio reflect fees waived and expenses reimbursed, if applicable, by the Adviser. Without such waivers and reimbursements, total returns would have been lower. The fee waivers and/or expense reimbursements will continue for at least one year or until such time as the Fund's Board of Directors acts to discontinue all or a portion of such waivers and/or expense reimbursements when it deems that such action is appropriate.

⁽⁴⁾ Commenced operations on May 24, 2012.

⁽⁵⁾ Commenced offering on September 13, 2013.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Emerging Markets External Debt Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (97.9%)
Argentina (0.5%)
Sovereign (0.5%)
Republic of Argentina, 2.50%, 12/31/38 (a)(b)(c)	$	165	$	85
Brazil (6.7%)
Corporate Bonds (4.9%)
Banco Safra SA,
6.75%, 1/27/21		200		215
BRF SA,
4.75%, 5/22/24 (d)		200		195
CIMPOR Financial Operations BV,
5.75%, 7/17/24 (d)		200		176
Odebrecht Offshore Drilling Finance Ltd.,
6.75%, 10/1/22 (d)		377		346
				932
Sovereign (1.8%)
Brazil Minas SPE via State of Minas Gerais,
5.33%, 2/15/28 (d)		350		347
				1,279
Chile (5.1%)
Corporate Bonds (3.2%)
Colbun SA,
4.50%, 7/10/24 (d)		200		201
Corp. Nacional del Cobre de Chile,
4.88%, 11/4/44 (d)		200		204
Empresa Electrica Angamos SA,
4.88%, 5/25/29 (d)		200		197
				602
Sovereign (1.9%)
Empresa Nacional del Petroleo,
4.75%, 12/6/21		150		153
5.25%, 8/10/20		200		211
				364
				966
China (3.1%)
Sovereign (3.1%)
Sinopec Group Overseas Development 2013 Ltd.,
4.38%, 10/17/23		360		378
Sinopec Group Overseas Development 2014 Ltd.,
4.38%, 4/10/24		200		211
				589
Colombia (3.0%)
Corporate Bonds (1.3%)
Ecopetrol SA,
5.88%, 5/28/45		44		41
Pacific Rubiales Energy Corp.,
5.38%, 1/26/19 (d)		150		129
5.63%, 1/19/25 (d)		100		77
				247

	Face Amount (000)		Value (000)
Sovereign (1.7%)
Colombia Government International Bond,
11.75%, 2/25/20	$	220	$	313
				560
Croatia (2.7%)
Sovereign (2.7%)
Croatia Government International Bond,
5.50%, 4/4/23		200		208
6.00%, 1/26/24 (d)		280		303
				511
Dominican Republic (0.6%)
Sovereign (0.6%)
Dominican Republic International Bond,
7.45%, 4/30/44 (d)		100		110
El Salvador (0.4%)
Sovereign (0.4%)
El Salvador Government International Bond,
6.38%, 1/18/27 (d)		80		81
Ethiopia (1.1%)
Sovereign (1.1%)
Federal Democratic Republic of Ethiopia,
6.63%, 12/11/24 (d)		200		197
Honduras (1.2%)
Sovereign (1.2%)
Republic of Honduras,
8.75%, 12/16/20		200		222
Hungary (3.9%)
Sovereign (3.9%)
Hungary Government International Bond,
4.00%, 3/25/19		20		21
5.38%, 3/25/24		202		219
5.75%, 11/22/23		340		378
6.38%, 3/29/21		108		124
				742
Indonesia (9.2%)
Sovereign (9.2%)
Indonesia Government International Bond,
5.88%, 1/15/24 (d)		200		227
7.75%, 1/17/38		192		252
Majapahit Holding BV,
7.75%, 1/20/20		329		382
Pertamina Persero PT,
4.30%, 5/20/23		260		250
6.45%, 5/30/44 (d)		200		209
Perusahaan Listrik Negara PT,
5.50%, 11/22/21		400		419
				1,739
Iraq (1.1%)
Sovereign (1.1%)
Republic of Iraq,
5.80%, 1/15/28		250		211

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Emerging Markets External Debt Portfolio

	Face Amount (000)		Value (000)
Ivory Coast (1.0%)
Sovereign (1.0%)
Ivory Coast Government International Bond, 5.38%, 7/23/24 (d)	$	200	$	192
Jamaica (1.1%)
Sovereign (1.1%)
Jamaica Government International Bond,
7.63%, 7/9/25		200		210
Kazakhstan (3.9%)
Sovereign (3.9%)
Kazakhstan Government International Bond,
3.88%, 10/14/24 (d)		200		188
KazMunayGas National Co., JSC,
6.00%, 11/7/44 (d)		200		170
6.38%, 4/9/21		375		381
				739
Kenya (1.1%)
Sovereign (1.1%)
Kenya Government International Bond,
6.88%, 6/24/24 (d)		200		210
Lithuania (1.5%)
Sovereign (1.5%)
Lithuania Government International Bond,
6.63%, 2/1/22		240		291
Mexico (13.2%)
Corporate Bonds (4.3%)
Alfa SAB de CV,
5.25%, 3/25/24		200		208
Cemex SAB de CV,
5.70%, 1/11/25 (d)		200		195
Fermaca Enterprises S de RL de CV,
6.38%, 3/30/38 (d)		200		204
Tenedora Nemak SA de CV,
5.50%, 2/28/23		200		205
				812
Sovereign (8.9%)
Mexico Government International Bond,
3.63%, 3/15/22		150		153
6.05%, 1/11/40		244		300
Petroleos Mexicanos,
3.50%, 1/30/23		150		144
4.88%, 1/24/22		458		481
6.50%, 6/2/41		190		219
6.63%, 6/15/35		330		383
				1,680
				2,492
Mozambique (1.0%)
Sovereign (1.0%)
EMATUM Via Mozambique EMATUM Finance 2020 BV,
6.31%, 9/11/20		200		196

	Face Amount (000)		Value (000)
Panama (2.3%)
Sovereign (2.3%)
Panama Government International Bond,
4.00%, 9/22/24	$	200	$	206
5.20%, 1/30/20		104		115
8.88%, 9/30/27		76		111
				432
Paraguay (1.1%)
Sovereign (1.1%)
Republic of Paraguay,
6.10%, 8/11/44 (d)		200		214
Peru (2.7%)
Corporate Bonds (2.3%)
Banco de Credito del Peru,
6.13%, 4/24/27 (d)(e)		212		225
Union Andina de Cementos SAA,
5.88%, 10/30/21 (d)		200		203
				428
Sovereign (0.4%)
Peruvian Government International Bond,
6.55%, 3/14/37		55		72
				500
Philippines (4.6%)
Sovereign (4.6%)
Philippine Government International Bond,
4.00%, 1/15/21		515		560
9.50%, 2/2/30		193		314
				874
Poland (2.3%)
Sovereign (2.3%)
Poland Government International Bond,
3.00%, 3/17/23		385		384
4.00%, 1/22/24		40		43
				427
Romania (0.8%)
Sovereign (0.8%)
Romanian Government International Bond,
4.38%, 8/22/23 (d)		76		80
6.75%, 2/7/22		50		61
				141
Russia (7.8%)
Sovereign (7.8%)
Russian Foreign Bond — Eurobond,
5.63%, 4/4/42		400		337
7.50%, 3/31/30		1,099		1,142
				1,479
South Africa (3.0%)
Corporate Bond (1.1%)
MTN Mauritius Investments Ltd.,
4.76%, 11/11/24 (d)		200		197

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Emerging Markets External Debt Portfolio

	Face Amount (000)		Value (000)
Sovereign (1.9%)
South Africa Government International Bond,
4.67%, 1/17/24	$	130	$	135
5.88%, 9/16/25		200		226
				361
				558
Turkey (5.3%)
Sovereign (5.3%)
Export Credit Bank of Turkey,
5.88%, 4/24/19 (d)		200		214
Turkey Government International Bond,
3.25%, 3/23/23		400		381
5.63%, 3/30/21		250		276
6.88%, 3/17/36		100		124
				995
Venezuela (6.6%)
Sovereign (6.6%)
Petroleos de Venezuela SA,
6.00%, 11/15/26		1,756		650
8.50%, 11/2/17		358		206
9.00%, 11/17/21		240		106
Venezuela Government International Bond,
9.00%, 5/7/23		280		124
9.25%, 5/7/28		50		22
11.75%, 10/21/26		290		145
				1,253
Total Fixed Income Securities (Cost $19,239)				18,495

	Shares		Value (000)
Short-Term Investment (0.6%)
Investment Company (0.6%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $120)		119,572	$	120
Total Investments (98.5%) (Cost $19,359) (f)				18,615
Other Assets in Excess of Liabilities (1.5%)				276
Net Assets (100.0%)			$	18,891

(a) Multi-step — Coupon rate changes in predetermined increments to maturity. Rate disclosed is as of December 31, 2014. Maturity date disclosed is the ultimate maturity date.

(b) Issuer in bankruptcy.

(d) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(e) Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on December 31, 2014.

(f) Securities are available for collateral in connection with open futures contracts.

Futures Contract:

The Portfolio had the following futures contract open at December 31, 2014:

	Number of Contracts		Value (000)			Expiration Date	Unrealized Appreciation (000)
Short:
U.S. Treasury 5 yr. Note		17	$	(2,022	)	Mar-15	$	1

Portfolio Composition

Classification	Percentage of Total Investments
Sovereign		82.1	%
Corporate Bonds		17.3
Other*		0.6
Total Investments		100.0	%**

* Industries and/or investment types representing less than 5% of total investments.

** Does not include an open short futures contract with an underlying face amount of approximately $2,022,000 with total unrealized appreciation of approximately $1,000.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets External Debt Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $19,239)	$	18,495
Investment in Security of Affiliated Issuer, at Value (Cost $120)		120
Total Investments in Securities, at Value (Cost $19,359)		18,615
Foreign Currency, at Value (Cost $1)		1
Interest Receivable		293
Receivable for Variation Margin on Futures Contracts		34
Receivable for Portfolio Shares Sold		5
Receivable from Affiliate		—	@
Other Assets		19
Total Assets		18,967
Liabilities:
Payable for Professional Fees		58
Payable for Advisory Fees		6
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Custodian Fees		2
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Other Liabilities		6
Total Liabilities		76
Net Assets	$	18,891
Net Assets Consist Of:
Paid-in-Capital	$	20,595
Accumulated Undistributed Net Investment Income		23
Accumulated Net Realized Loss		(984	)
Unrealized Appreciation (Depreciation) on:
Investments		(744	)
Futures Contracts		1
Foreign Currency Translations		(—	@)
Net Assets	$	18,891
CLASS I:
Net Assets	$	18,492
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		2,006,402
Net Asset Value, Offering and Redemption Price Per Share	$	9.22
CLASS A:
Net Assets	$	291
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		31,609
Net Asset Value, Redemption Price Per Share	$	9.21
Maximum Sales Load		4.25	%
Maximum Sales Charge	$	0.41
Maximum Offering Price Per Share	$	9.62
CLASS L:
Net Assets	$	98
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		10,691
Net Asset Value, Offering and Redemption Price Per Share	$	9.22
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,036
Net Asset Value, Offering and Redemption Price Per Share	$	9.22

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets External Debt Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	1,223
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		1,223
Expenses:
Advisory Fees (Note B)		151
Professional Fees		117
Registration Fees		37
Shareholder Reporting Fees		18
Administration Fees (Note C)		16
Custodian Fees (Note F)		14
Pricing Fees		12
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		2
Shareholder Services Fees — Class A (Note D)		1
Distribution and Shareholder Services Fees — Class L (Note D)		1
Sub Transfer Agency Fees		—	@
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Other Expenses		14
Total Expenses		392
Waiver of Advisory Fees (Note B)		(151	)
Expenses Reimbursed by Adviser (Note B)		(65	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		170
Net Investment Income		1,053
Realized Loss:
Investments Sold		(336	)
Foreign Currency Forward Exchange Contracts		(4	)
Foreign Currency Transactions		(1	)
Futures Contracts		(33	)
Net Realized Loss		(374	)
Change in Unrealized Appreciation (Depreciation):
Investments		23
Foreign Currency Translations		(—	@)
Futures Contracts		(8	)
Net Change in Unrealized Appreciation (Depreciation)		15
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(359	)
Net Increase in Net Assets Resulting from Operations	$	694

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets External Debt Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,053		$	1,115
Net Realized Loss		(374	)		(314	)
Net Change in Unrealized Appreciation (Depreciation)		15			(2,871	)
Net Increase (Decrease) in Net Assets Resulting from Operations		694			(2,070	)
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(1,013	)		(1,072	)
Net Realized Gain		—			(471	)
*Class A:**
Net Investment Income		(13	)		(8	)
Net Realized Gain		—			(4	)
*Class H:**
Net Investment Income		—			(5	)**
Net Realized Gain		—			(1	)**
Class L:
Net Investment Income		(5	)		(5	)
Net Realized Gain		—			(2	)
Class IS:
Net Investment Income		(1	)		(—	@)***
Net Realized Gain		—			(—	@)***
Total Distributions		(1,032	)		(1,568	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		241			1,038
Distributions Reinvested		30			79
Redeemed		(852	)		(754	)
*Class A:**
Subscribed		181			—
Distributions Reinvested		3			—	@
Conversion from Class H		—			104
Redeemed		(80	)		(—	@)
*Class H:**
Subscribed		—			250	**
Distributions Reinvested		—			3	**
Conversion to Class A		—			(104	)**
Redeemed		—			(229	)**
Class L:
Subscribed		—			7
Distributions Reinvested		—	@		—	@
Class IS:
Subscribed		—			10	***
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(477	)		404
Redemption Fees		—			—	@
Total Decrease in Net Assets		(815	)		(3,234	)
Net Assets:
Beginning of Period		19,706			22,940
End of Period (Including Accumulated Undistributed Net Investment Income and Distributions in Excess of Net Investment Income of $23 and $(2), respectively.)	$	18,891		$	19,706

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Emerging Markets External Debt Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		25			97
Shares Issued on Distributions Reinvested		3			8
Shares Redeemed		(86	)		(75	)
Net Increase (Decrease) in Class I Shares Outstanding		(58	)		30
*Class A:**
Shares Subscribed		19			—
Shares Issued on Distributions Reinvested		—	@@		—	@@
Conversion from Class H		—			11
Shares Redeemed		(8	)		(—	@@)
Net Increase in Class A Shares Outstanding		11			11
*Class H:**
Shares Subscribed		—			23	**
Shares Issued on Distributions Reinvested		—			—	@@**
Conversion to Class A		—			(11	)**
Shares Redeemed		—			(23	)**
Net Decrease in Class H Shares Outstanding		—			(11	)
Class L:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		_—	@@
Net Increase in Class L Shares Outstanding		—	@@		1
Class IS:
Shares Subscribed		—			1	***

@ Amount is less than $500.

@@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

*** For the period September 13, 2013 through December 31, 2013.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets External Debt Portfolio

	Class I
	Year Ended December 31,						Period from May 24, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	9.40		$	11.11		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income†		0.51			0.53			0.30
Net Realized and Unrealized Gain (Loss)		(0.19	)		(1.50	)		1.18
Total from Investment Operations		0.32			(0.97	)		1.48
Distributions from and/or in Excess of:
Net Investment Income		(0.50	)		(0.48	)		(0.30	)
Net Realized Gain		—			(0.26	)		(0.07	)
Total Distributions		(0.50	)		(0.74	)		(0.37	)
Redemption Fees		—			0.00	‡		—
Net Asset Value, End of Period	$	9.22		$	9.40		$	11.11
Total Return++		3.38	%		(8.79	)%		14.83	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	18,492		$	19,400		$	22,597
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.83	%+		0.84	%+		0.84	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		5.23	%+		5.14	%+		4.63	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		95	%		94	%		29	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.91	%		2.15	%		2.02	%*
Net Investment Income to Average Net Assets		4.15	%		3.83	%		3.45	%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets External Debt Portfolio

	Class A@
	Year Ended December 31,						Period from May 24, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	9.40		$	11.11		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income†		0.47			0.49			0.29
Net Realized and Unrealized Gain (Loss)		(0.19	)		(1.49	)		1.17
Total from Investment Operations		0.28			(1.00	)		1.46
Distributions from and/or in Excess of:
Net Investment Income		(0.47	)		(0.45	)		(0.28	)
Net Realized Gain		—			(0.26	)		(0.07	)
Total Distributions		(0.47	)		(0.71	)		(0.35	)
Redemption Fees		—			0.00	‡		—
Net Asset Value, End of Period	$	9.21		$	9.40		$	11.11
Total Return++		2.90	%		(9.05	)%		14.66	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	291		$	196		$	111
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.20	%+		1.14	%+^^		1.09	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		4.88	%+		4.88	%+		4.38	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		95	%		94	%		29	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.85	%		2.76	%		2.27	%*
Net Investment Income to Average Net Assets		3.23	%		3.26	%		3.20	%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.10% for Class A shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets External Debt Portfolio

	Class L
	Year Ended December 31,						Period from May 24, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	9.39		$	11.11		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income†		0.45			0.47			0.25
Net Realized and Unrealized Gain (Loss)		(0.18	)		(1.51	)		1.18
Total from Investment Operations		0.27			(1.04	)		1.43
Distributions from and/or in Excess of:
Net Investment Income		(0.44	)		(0.42	)		(0.25	)
Net Realized Gain		—			(0.26	)		(0.07	)
Total Distributions		(0.44	)		(0.68	)		(0.32	)
Redemption Fees		—			0.00	‡		—
Net Asset Value, End of Period	$	9.22		$	9.39		$	11.11
Total Return++		2.85	%		(9.41	)%		14.33	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	98		$	100		$	111
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.45	%+		1.41	%+^^		1.59	%+*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		4.62	%+		4.57	%+		3.88	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§		0.01	%*
Portfolio Turnover Rate		95	%		94	%		29	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		4.10	%		3.07	%		2.77	%*
Net Investment Income to Average Net Assets		1.97	%		2.91	%		2.70	%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Emerging Markets External Debt Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	9.40		$	9.65
Income (Loss) from Investment Operations:
Net Investment Income†		0.51			0.15
Net Realized and Unrealized Gain (Loss)		(0.19	)		0.04
Total from Investment Operations		0.32			0.19
Distributions from and/or in Excess of:
Net Investment Income		(0.50	)		(0.24	)
Net Realized Gain		—			(0.20	)
Total Distributions		(0.50	)		(0.44	)
Redemption Fees		—			0.00	‡
Net Asset Value, End of Period	$	9.22		$	9.40
Total Return++		3.39	%		1.92	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	10		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		0.82	%+		0.81	%+^^*
Ratio of Net Investment Income to Average Net Assets ⁽¹⁾		5.25	%+		5.36	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		95	%		94	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		21.21	%		7.70	%*
Net Investment Loss to Average Net Assets		(15.14	)%		(1.53	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.82% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Emerging Markets External Debt Portfolio. The Portfolio seeks high total return by investing primarily in fixed income securities of government and government-related issuers and corporate issuers in emerging market countries. The securities in which the Portfolio may invest will primarily be denominated in U.S. dollars. The Portfolio may invest, to a lesser extent, in securities denominated in currencies other than U.S. dollars. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares. Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (2) futures are valued at the latest price published by the commodities exchange on which they trade; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good

faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

propriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	3,218	$	—	$	3,218
Sovereign		—		15,277		—		15,277
Total Fixed Income Securities		—		18,495		—		18,495
Short-Term Investment
Investment Company		120		—		—		120
Futures Contract		1		—		—		1
Total Assets	$	121	$	18,495	$	—	$	18,616

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

from changes in the market prices of securities held at period end. Similarly, the Portfolio does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

kets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of December 31, 2014, the Portfolio did not have any open foreign currency forward exchange contracts.

when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Portfolio's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has open positions in the futures contract.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Futures Contract

Variation Margin on
Futures Contract

Interest
Rate Risk

(a)

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(4	)
Interest Rate Risk	Futures Contracts		(33	)
Total		$	(37	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	(8	)

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	43,000
Futures Contracts:
Average monthly original value	$	1,620,000

5. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares and Class IS shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

7. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

allocated to each class of shares based upon their relative net assets.

First $500 million				Next $500 million				Over $1 billion
	0.75	%			0.70	%			0.65	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 1.45% for Class L shares and 0.82% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $151,000 of advisory fees were waived and approximately $70,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $19,214,000 and $18,257,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	1,497			$	10,020			$	11,397			$	—	@		$	120

@ Amount is less than $500.

FASB ASC 740-10 Income Taxes — Overall sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the three-year period ended December 31, 2014, remains subject to examination by taxing authorities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,031	$	—	$	1,545	$	22

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, gains (losses) on paydowns and tax adjustments on debt securities sold by the Portfolio, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	4			$	(4	)		$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	25			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $19,430,000. The aggregate gross unrealized appreciation is approximately $541,000 and the aggregate gross unrealized depreciation is approximately $1,356,000 resulting in net unrealized depreciation of approximately $815,000.

At December 31, 2014, the Portfolio had available unused short-term capital losses of approximately $339,000 and long-term capital losses of approximately $569,000 that do not have an expiration date.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets External Debt Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Emerging Markets External Debt Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, and the statements of changes in net assets and the financial highlights for the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Emerging Markets External Debt Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, and the changes in its net assets, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIEMEDANN
1112691 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Multi-Asset Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					9
Statement of Assets and Liabilities					23
Statement of Operations					25
Statements of Changes in Net Assets					26
Financial Highlights					28
Notes to Financial Statements					31
Report of Independent Registered Public Accounting Firm					42
Federal Tax Notice					43
U.S. Privacy Policy					44
Director and Officer Information					47

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Multi-Asset Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Multi-Asset Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Multi-Asset Portfolio Class I	$	1,000.00	$	1,013.80	$	1,020.21	$	5.03	$	5.04		0.99	%
Multi-Asset Portfolio Class A		1,000.00		1,013.30		1,018.70		6.55		6.56		1.29
Multi-Asset Portfolio Class L		1,000.00		1,010.80		1,016.33		8.92		8.94		1.76

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Multi-Asset Portfolio

The Portfolio seeks total return. The Portfolio's "Adviser," Morgan Stanley Investment Management Inc., seeks to achieve this objective with an emphasis on positive absolute return and controlling downside portfolio risk.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 0.77%, net of fees, for Class I shares. The Portfolio's Class I shares outperformed the Portfolio's primary benchmark, the Bank of America/Merrill Lynch U.S. Dollar 1-month LIBID Average Index (the "Index"), which returned 0.08%, but underperformed the secondary benchmark, the Customized MSIM Global Allocation Index (comprised of 60% MSCI All Country World Index, 30% Barclays Global Aggregate Bond Index, 5% S&P GSCI Light Energy Index, and 5% Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index), which returned 1.62%. (Portfolio and benchmark index performance in U.S. dollar ("USD") terms).

Factors Affecting Performance⁽ⁱ⁾

• Global equities were up 9.3% in local currency terms in 2014 (+4.2% USD), outperforming bonds, which rose 8.5% in local currency terms (+0.7% USD), and commodities, which fell 33.1% in U.S. dollar terms.⁽ⁱⁱ⁾ During the year, the U.S. economic recovery gained momentum, and the U.S. Federal Reserve (Fed) completed the final taper of its quantitative easing program. Meanwhile slowing growth in China and Russia created a drag on global economic growth, while tumbling oil prices helped lower inflation expectations across developed markets.

• U.S. equities were the regional outperformer in 2014 (with the S&P 500 Index advancing 13.7%), benefiting from stronger employment data and ongoing strength in manufacturing, combined with lower inflation expectations and indications that the Fed would remain patient in raising rates. The U.S. added an average of 246,000 jobs per month during 2014, the highest year for job growth since 1999, bringing the unemployment rate to 5.6% in December.⁽ⁱⁱⁱ⁾

• Eurozone equities gained 4.0% in local currency terms in 2014^(iv), rallying early in the year on strengthening economic data. The European Central Bank (ECB) announced easing measures

aimed at combating deflation; however the market's reaction remained mixed through the end of the year as growth disappointed and central bankers disagreed about the scope and particulars of large-scale asset purchases. Toward the end of the year, the threat of a fresh Greek debt crisis led to risk-off sentiment in periphery equities, and the collapse of the Russian economy weighed on core equities. Greek bonds sold off sharply in the fourth quarter; however, yields across the rest of the periphery and the core fell to all-time lows amid ECB easing, with German 2-year bund yields moving into negative territory by year-end.

• Emerging market (EM) equities lagged those of developed markets in 2014, with the MSCI Emerging Markets Index gaining 5.2% in local currency terms (versus the MSCI World Index return of 9.8% in local currency). Brazil slipped into recession (the MSCI Brazil Index fell -3.2% local), and the Russian economy collapsed amid the Ukraine crisis and lower oil prices (the MSCI Russia Index fell -12.8% local). Despite relatively weaker economic data, China outperformed (the MSCI China Index rose +8.0% local) as the market speculated on incremental policy easing. The MSCI India Index was among the top performers, gaining 26.4% in local currency terms on expectations for reforms following the general election in May.

• Japanese equities performed in line with global equities, with the MSCI Japan Index up 9.5% in local currency terms. Japan had underperformed global equities through the third quarter, but caught up in the fourth quarter as the Bank of Japan (BoJ) surprised markets by expanding its asset purchase program.

⁽ⁱ⁾ Certain of the Portfolio's investment themes may, in whole or part, be implemented through the use of derivatives, including the purchase and sale of futures, options, swaps, structured investments (including commodity-linked notes) and other related instruments and techniques. The Portfolio may also invest in foreign currency forward exchange contracts, which are also derivatives, in connection with its investments in foreign securities. The Portfolio may use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. As a result, the use of derivatives had a material effect on the Portfolio's performance during the period.

⁽ⁱⁱ⁾ Data sources for index returns: Bloomberg L.P., FactSet. Global equities, bonds and commodities are represented by the MSCI All Country World Index, the JPMorgan Global Government Bond Index Unhedged, and the S&P GSCI Total Return Index, respectively.

⁽ⁱⁱⁱ⁾ Source: Bureau of Labor Statistics, data as of December 2014

^(iv) Eurozone equities are represented by the Eurostoxx 50 Total Return Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Multi-Asset Portfolio

• The Portfolio's strongest-performing positions in 2014 were related to our long U.S. dollar theme. In particular, the top contributors included short positions in the euro, a broad basket of 16 emerging market currencies, and the New Zealand dollar.

• The commodity slowdown theme contributed positively, including our short position in iron ore mining stocks relative to global equities, as iron ore spot prices declined almost 50% during 2014.^(v) Our short positions in copper and in mining equipment stocks relative to global equities contributed as well, as copper spot prices fell 17% during the year.^(vi)

• Positions related to our eurozone recovery theme contributed positively to performance in 2014, due to strong gains in the first half of the year from our long positions in Greek and Portuguese bonds, which were partially offset by losses from our short position in German bunds, as well as long positions in eurozone and periphery equities relative to U.S. equities.

• On balance, our China and emerging market slowdown themes had a neutral impact on performance. The Portfolio saw gains from our short position in emerging market relative to developed market consumer staples stocks, as well as our short positions in global machinery, Hong Kong equities, and luxury goods stocks, all relative to global equities. These were offset by losses toward the end of the year from our short positions in China A-shares and H-shares as well as bank stocks, as the market rallied on speculation that China is at the beginning of a policy easing cycle. Our short position in Indian banks relative to global equities detracted as well.

• Our higher U.S. interest rates theme detracted from performance during 2014. Rates rallied due to ongoing dovish rhetoric from the Fed, lower inflation expectations, and, later in the year, fears of knock-on effects from a global growth slowdown. Detractors included a short position in high dividend yielding U.S. equities relative to low dividend yielding U.S. equities, a short position in U.S. real estate investment trusts (REITs) relative to U.S. equities, and a short position in U.S. 2-year interest rate swaps.

• Some idiosyncratic themes detracted from the Portfolio on balance, including a premature call on the bottom in the oil price in November when OPEC (Organization of Petroleum Exporting Countries), in a move that marked a significant departure from its traditional role in balancing the market, failed to cut production. Our long position in Russia 5-year credit default swaps (CDS) also detracted as the plummeting oil price threatened the Russian economy. However, our short aerospace supply chain and short Japanese equities themes both contributed.

Management Strategies

• As of December 31, 2014, the Portfolio's net equity exposure was approximately -1%, net fixed income exposure was approximately -6%, and net commodities exposure was approximately -3%.^(vii)

• Heading into 2015, we remain cautious on risky assets globally. We continue to be more constructive on developed markets than on emerging markets, with a preference for Europe over the U.S., although in the near-term Russia poses a risk to the eurozone economy. We continue to believe many yield-sensitive assets are overvalued globally, and are likely to re-price as U.S. interest rates are gradually normalized.

• We are cautious on U.S. equities, despite increasing evidence of strong U.S. economic growth, as valuations remain high; earnings are at risk from margin contraction and softer non-U.S. growth; our sentiment composite indicates that U.S. equities have reached overbought levels; and the prospect of higher U.S. interest rates in the next six to nine months could cause increased volatility. U.S. stocks are trading at 16.8x estimated forward earnings, or 28% above their historic average, and analysts expect profits to keep growing at 10% to 12% for the next two years;^(viii) however, as many of the

^(v) Source: Bloomberg L.P.

^(vi) Source: Bloomberg L.P.

^(vii) The Portfolio seeks to achieve a consistent level of positive absolute returns while controlling downside portfolio risk. The Portfolio seeks to achieve this objective by taking long and short positions (often in the form of paired or hedged trades) in a range of equity and equity related securities of any market capitalization, bonds, currencies and commodities, which can result in negative net exposures. As the Portfolio's primary benchmark (the Bank of America Merrill Lynch U.S. Dollar 1-month LIBID Average Index) represents cash, the Portfolio will maintain, from time to time, significant exposure to a risk-free asset class.

^(viii) Source: Bloomberg L.P.; IBES

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Multi-Asset Portfolio

structural and cyclical factors which have benefited stocks are in the process of reversing or ending, we expect margin compression to offset revenue growth in 2015, resulting in flat earnings. If Fed tightening is attended by multiple compression in equities, the impact of an earnings miss could be compounded, resulting in a correction in U.S. equities in 2015.

• We are more positive on eurozone risk assets, and believe that 2015 will be the year that eurozone equities outperform. However, recent economic data and market performance have been discouraging and, as the Russian ruble has fallen precipitously, we are wary of Russia's impact on European growth via exports to and tourism from Russia. According to our estimates, declining Russian exports and tourism could detract as much as 0.5% from eurozone gross domestic product (GDP) growth over the next two quarters, perhaps helping to explain why eurozone data continues to miss expectations. However, at some point in 2015, a weaker currency, lower corporate borrowing rates, and lower oil prices should become tailwinds to growth, allowing eurozone equities to outperform.

• We are neutral on Japanese equities. We expect that the market will increasingly recognize that Abenomics' three components — monetary easing, fiscal stimulus, and structural reform — have largely failed. Aggressive monetary easing led yen depreciation and lifted exporter profits, but the weaker yen's positive effects are now waning. Exports have not picked up, and real wages remain significantly negative due to the recent increase in the national value added tax rate. We are skeptical that Abenomics' real growth targets are achievable. We estimate that Japan's trend GDP growth is approximately 0% to 0.5%, as its labor force is likely to shrink by 0.5% to 1% per year and productivity growth remains in line with its recent average of 1%. Thus far we have seen nothing in terms of structural reform to alter this fundamental reality, nor do we think it is easy to do so in the short term. Consensus estimates of GDP growth remain 1% above what we see as trend growth for

this and next year, suggesting room for disappointment. We are actively monitoring for opportunities to re-initiate bearish positions in this theme.

• We are short assets exposed to China's credit cycle and the commodity supply chain. China's slowdown continues to hit commodity exporters, and the rest of EM is growing more slowly than the U.S., with a couple of major countries either in recession (Brazil) or in deep contraction (Russia). We believe consensus expectations for acceleration in emerging market growth will likely have to be revised down. Few emerging markets will have the ability to ease policy in order to cushion the slowdown (India is an exception, as inflation is meaningfully improving there). In many, tightening is required to stabilize worrisome inflation, fiscal, credit or balance of payment trends. Monetary policy tightening will crimp credit growth which has fueled the consumer boom over the past cycle, and we believe this will be a prolonged headwind to growth. China will likely ease policy, but is constrained by the massive size of its outstanding credit.

• Strong growth in the U.S. would argue for June rate hikes (earlier than the market expects). Yet the market is pricing in minimal Fed tightening (fewer than two hikes in 2015), signaling that this may be the time to re-initiate short duration positions. The risk to this view remains that, similar to the late 1990s, global growth deceleration led by Asia, falling commodity prices, disinflation, and a strong U.S. dollar could prevent the Fed from tightening.

• In sum, our main themes continue to be centered around the ascent of the U.S. dollar, the unwinding of the yield bubble, the slowdown in China and the commodity supply chain, with potential for an Asian crisis scenario in 2015 as China's credit and investment bubbles deflate, as well as the eurozone recovery, following a potential trough around the first half of 2015, and a few idiosyncratic themes such as short Russia-exposed consumer stocks.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Multi-Asset Portfolio

* Minimum Investment for Class I shares

** Commenced Operations on June 22, 2012.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A and L shares will vary from the performance of Class I shares and will be impacted by additional fees assessed to those classes.

Performance Compared to the Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index⁽¹⁾ the Customized MSIM Global Allocation Index⁽²⁾ and the Lipper Alternative Global Macro Funds Index⁽³⁾

	Period Ended December 31, 2014 Total Returns⁽⁴⁾
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁵⁾		0.77	%		—		—		9.08	%
Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index		0.08			—		—		0.09
The Customized MSIM Global Allocation Index		1.62			—		—		8.93
Lipper Alternative Global Macro Funds Index		0.95			—		—		4.73
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		0.55			—		—		8.81
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–4.70			—		—		6.52
Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index		0.08			—		—		0.09
The Customized MSIM Global Allocation Index		1.62			—		—		8.93
Lipper Alternative Global Macro Funds Index		0.95			—		—		4.73
Portfolio — Class L Shares w/o sales charges⁽⁵⁾		0.02			—		—		8.23
Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index		0.08			—		—		0.09
The Customized MSIM Global Allocation Index		1.62			—		—		8.93
Lipper Alternative Global Macro Funds Index		0.95			—		—		4.73

⁽¹⁾ The Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index tracks the performance of a basket of synthetic assets paying LIBID to a stated maturity. The index purchases a new instrument each day, priced at par, having exactly its stated maturity and with a coupon equal to that day's fixing rate. All issues are held to maturity. Therefore, each day the index is comprised of a basket of securities. The index is not marked to market. The returns of the index represent the accrued income generated by the equally weighted average of all the coupons in the basket for a given day. It is not possible to invest directly in an index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Multi-Asset Portfolio

⁽²⁾ The Customized MSIM Global Allocation Index is comprised of 60% MSCI All Country World Index (benchmark that measures the equity market performance of developed and emerging markets), 30% Barclay Global Aggregate Bond Index (benchmark that provides a broadbased measure of the global investment grade fixed-rate debt markets), 5% S&P GSCI Light Energy Index (benchmark for investment performance in the energy commodity market), 5% Bank of America/Merrill Lynch U.S. Dollar 1-Month LIBID Average Index (benchmark that tracks the performance of a basket of synthetic assets paying LIBID to a stated maturity). The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽³⁾ The Lipper Alternative Global Macro Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Alternative Global Macro Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Alternative Global Macro Funds classification.

⁽⁵⁾ Commenced operations on June 22, 2012.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Multi-Asset Portfolio

	Shares		Value (000)
Common Stocks (16.4%)
Australia (0.1%)
AGL Energy Ltd.		473	$	5
ALS Ltd.		384		2
Alumina Ltd. (a)		2,302		3
Amcor Ltd.		900		10
AMP Ltd.		2,048		9
APA Group		1,025		6
Arrium Ltd.		1,334		—	@
Asciano Ltd.		1,125		6
ASX Ltd.		226		7
Aurizon Holding Ltd.		1,907		7
Australia & New Zealand Banking Group Ltd.		1,751		46
Bank of Queensland Ltd.		515		5
Bendigo and Adelaide Bank Ltd.		620		6
BHP Billiton Ltd.		1,945		46
BlueScope Steel Ltd. (a)		476		2
Boral Ltd.		759		3
Brambles Ltd.		1,026		9
carsales.com Ltd.		259		2
Coca-Cola Amatil Ltd.		566		4
Commonwealth Bank of Australia		939		65
Computershare Ltd.		434		4
Crown Resorts Ltd.		383		4
CSL Ltd.		301		21
Flight Centre Travel Group Ltd.		96		3
Fortescue Metals Group Ltd.		1,239		3
Goodman Group REIT		1,647		8
Iluka Resources Ltd.		391		2
Incitec Pivot Ltd.		1,483		4
Insurance Australia Group Ltd.		1,578		8
James Hardie Industries SE CDI		430		5
Lend Lease Group REIT		547		7
Macquarie Group Ltd.		225		11
Mirvac Group REIT		4,373		6
National Australia Bank Ltd.		1,482		40
Newcrest Mining Ltd. (a)		532		5
Oil Search Ltd.		1,105		7
Orica Ltd.		285		4
Origin Energy Ltd.		726		7
Qantas Airways Ltd. (a)		2,647		5
QBE Insurance Group Ltd.		793		7
Rio Tinto Ltd.		287		14
Santos Ltd.		771		5
Scentre Group REIT (a)		4,516		13
Seek Ltd.		315		4
Sonic Healthcare Ltd.		363		6
Stockland REIT		2,072		7
Suncorp Group Ltd.		832		10
Sydney Airport		1,573		6
Tatts Group Ltd.		2,508		7
Telstra Corp., Ltd.		7,362		36
Transurban Group		1,135		8

	Shares		Value (000)
Treasury Wine Estates Ltd.		648	$	3
Wesfarmers Ltd.		683		23
Westfield Corp. REIT		1,283		9
Westpac Banking Corp.		1,847		50
Woodside Petroleum Ltd.		431		13
Woolworths Ltd.		767		19
WorleyParsons Ltd.		295		2
				639
Belgium (0.2%)
Anheuser-Busch InBev N.V.		7,791		877
Colruyt SA		353		16
Delhaize Group SA		476		35
				928
Canada (0.1%)
Lululemon Athletica, Inc. (a)		6,800		379
Denmark (0.0%)
Carlsberg A/S Series B		504		39
Finland (0.0%)
Kesko Oyj, Class B		292		11
France (0.8%)
Air Liquide SA		2,580		318
Airbus Group N.V.		3,345		166
AXA SA		13,430		310
BNP Paribas SA		6,086		358
Carrefour SA		2,783		85
Casino Guichard Perrachon SA		260		24
Danone SA		6,477		426
GDF Suez		10,289		240
Hermes International		80		28
L'Oreal SA		2,733		459
LVMH Moet Hennessy Louis Vuitton SA		1,680		266
Pernod Ricard SA		997		110
Remy Cointreau SA		99		7
Sanofi		6,760		616
Schneider Electric SE		3,725		271
Societe Generale SA		4,547		191
Total SA		13,907		717
Vinci SA		3,453		189
Vivendi SA (a)		8,082		202
				4,983
Germany (0.7%)
Allianz SE (Registered)		3,161		525
BASF SE		5,116		433
Bayer AG (Registered)		4,518		618
Beiersdorf AG		464		38
Daimler AG (Registered)		6,127		511
Deutsche Bank AG (Registered)		8,442		255
Deutsche Post AG (Registered)		6,174		202
Deutsche Telekom AG (Registered)		17,577		282
E.ON SE		12,650		217
Henkel AG & Co., KGaA		606		59
Metro AG (a)		584		18

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
Germany (cont'd)
SAP SE		5,409	$	382
Siemens AG (Registered)		4,830		548
Suedzucker AG		376		5
Volkswagen AG (Preference)		949		212
				4,305
Ireland (0.0%)
Kerry Group PLC, Class A		686		47
Italy (0.2%)
Enel SpA		41,688		186
Eni SpA		17,473		305
Intesa Sanpaolo SpA		84,259		244
UniCredit SpA		31,078		198
				933
Japan (0.7%)
Advantest Corp.		2,000		25
Aeon Co., Ltd.		6,230		63
Ajinomoto Co., Inc.		1,000		19
Alps Electric Co., Ltd.		900		17
Asahi Group Holdings Ltd.		3,660		113
Astellas Pharma, Inc.		4,000		56
Bridgestone Corp.		900		31
Calbee, Inc.		100		3
Canon, Inc.		1,300		41
Casio Computer Co., Ltd.		1,000		15
Central Japan Railway Co.		200		30
Chiyoda Corp.		1,000		8
Chugai Pharmaceutical Co., Ltd.		900		22
Coca-Cola West Co., Ltd.		100		1
COMSYS Holdings Corp.		1,100		15
Credit Saison Co., Ltd.		1,100		20
Daiichi Sankyo Co., Ltd.		1,000		14
Daikin Industries Ltd.		800		52
Daiwa House Industry Co., Ltd.		1,000		19
Denso Corp.		800		37
Dentsu, Inc.		900		38
Dowa Holdings Co., Ltd.		1,000		8
Eisai Co., Ltd.		900		35
FamilyMart Co., Ltd.		100		4
FANUC Corp.		800		132
Fast Retailing Co., Ltd.		800		291
Fuji Heavy Industries Ltd.		900		32
FUJIFILM Holdings Corp.		1,000		30
Hino Motors Ltd.		1,000		13
Hitachi Construction Machinery Co., Ltd.		1,000		21
Honda Motor Co., Ltd.		1,700		49
Isetan Mitsukoshi Holdings Ltd.		1,100		13
ITOCHU Corp.		1,300		14
Japan Tobacco, Inc.		10,280		282
JGC Corp.		1,000		21
JTEKT Corp.		900		15
Kao Corp.		6,030		238

	Shares		Value (000)
KDDI Corp.		1,600	$	100
Kikkoman Corp.		1,000		25
Kirin Holdings Co., Ltd.		1,900		24
Komatsu Ltd.		1,000		22
Konami Corp.		900		17
Kubota Corp.		1,000		15
Kuraray Co., Ltd.		1,600		18
Kyocera Corp.		1,700		78
Lawson, Inc.		100		6
Marui Group Co., Ltd.		1,300		12
Matsui Securities Co., Ltd.		1,300		11
MEIJI Holdings Co., Ltd.		100		9
Minebea Co., Ltd.		1,000		15
Mitsubishi Corp.		1,100		20
Mitsubishi Electric Corp.		1,000		12
Mitsubishi Estate Co., Ltd.		1,000		21
Mitsubishi Logistics Corp.		1,000		14
Mitsui & Co., Ltd.		1,200		16
Mitsui Fudosan Co., Ltd.		1,000		27
Mitsui OSK Lines Ltd.		3,000		9
Mitsumi Electric Co., Ltd.		1,000		8
NGK Insulators Ltd.		1,000		21
NH Foods Ltd.		1,000		22
Nikon Corp.		900		12
Nippon Kayaku Co., Ltd.		1,000		12
Nissan Chemical Industries Ltd.		1,200		22
Nisshin Seifun Group, Inc.		1,400		14
Nisshinbo Holdings, Inc.		2,000		21
Nissin Foods Holdings Co., Ltd.		100		5
Nitto Denko Corp.		900		50
NSK Ltd.		1,000		12
NTT Data Corp.		900		34
Odakyu Electric Railway Co., Ltd.		2,000		18
OKUMA Corp.		1,000		8
Olympus Corp. (a)		800		28
Panasonic Corp.		900		11
Ricoh Co., Ltd.		1,000		10
Secom Co., Ltd.		900		52
Sekisui House Ltd.		1,100		14
Seven & I Holdings Co., Ltd.		7,020		253
Shin-Etsu Chemical Co., Ltd.		900		59
Shionogi & Co., Ltd.		900		23
Shiseido Co., Ltd.		3,760		53
Shizuoka Bank Ltd. (The)		3,000		27
Showa Shell Sekiyu KK		1,200		12
Softbank Corp.		2,400		143
Sony Corp.		900		18
Sumitomo Corp.		1,400		14
Sumitomo Dainippon Pharma Co., Ltd.		900		9
Sumitomo Electric Industries Ltd.		1,300		16
Sumitomo Metal Mining Co., Ltd.		1,000		15
Sumitomo Realty & Development Co., Ltd.		1,000		34
Suntory Beverage & Food Ltd.		790		27

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
Japan (cont'd)
Suzuki Motor Corp.		900	$	27
Taiyo Yuden Co., Ltd.		1,100		13
Takeda Pharmaceutical Co., Ltd.		800		33
TDK Corp.		900		53
Terumo Corp.		1,800		41
Tokio Marine Holdings, Inc.		900		29
Tokyo Electron Ltd.		800		61
Tokyo Gas Co., Ltd.		2,000		11
Tokyo Tatemono Co., Ltd.		1,000		7
TOTO Ltd.		1,000		12
Toyo Seikan Group Holdings Ltd.		1,300		16
Toyota Motor Corp.		800		50
Toyota Tsusho Corp.		1,000		23
Trend Micro, Inc.		900		25
Unicharm Corp.		2,300		55
Yakult Honsha Co., Ltd.		100		5
Yamaha Corp.		1,100		16
Yamato Holdings Co., Ltd.		1,000		20
Yaskawa Electric Corp.		1,000		13
Yokogawa Electric Corp.		1,000		11
Yokohama Rubber Co., Ltd. (The)		1,000		9
				3,915
Netherlands (0.3%)
ASML Holding N.V.		2,250		241
Heineken Holding N.V.		468		29
Heineken N.V.		1,065		76
ING Groep N.V. CVA (a)		22,176		287
Koninklijke Ahold N.V.		4,310		77
Koninklijke Philips N.V.		5,795		168
Unilever N.V. CVA		16,881		663
				1,541
Norway (0.0%)
Orkla ASA		3,526		24
Poland (0.0%)
Jeronimo Martins SGPS SA		1,161		12
Portugal (0.0%)
Banco Espirito Santo SA (Registered) (a)		570,338		5
South Africa (0.0%)
Mota-Engil Africa N.V. (a)		122		1
SABMiller PLC		5,686		294
				295
Spain (0.3%)
Banco Bilbao Vizcaya Argentaria SA		33,010		310
Banco Santander SA		64,341		538
Distribuidora Internacional de Alimentacion SA		2,793		19
Iberdrola SA		36,079		243
Inditex SA		6,850		196
International Consolidated Airlines Group SA (a)		3,776		28
Telefonica SA		24,945		357
				1,691

	Shares		Value (000)
Sweden (0.0%)
Svenska Cellulosa AB SCA, Class B		2,655	$	57
Swedish Match AB		933		29
				86
Switzerland (0.2%)
Aryzta AG (a)		401		31
Barry Callebaut AG (Registered) (a)		8		8
Chocoladefabriken Lindt & Sprungli AG		1		5
Coca-Cola HBC AG (a)		890		17
Nestle SA (Registered)		15,181		1,113
				1,174
United Kingdom (0.8%)
Anglo American PLC		1,696		31
ARM Holdings PLC		1,926		30
Associated British Foods PLC		2,071		101
AstraZeneca PLC		1,450		102
Aviva PLC		5,035		38
BAE Systems PLC		5,294		39
Barclays PLC		19,090		72
BG Group PLC		3,981		53
BHP Billiton PLC		2,734		58
BP PLC		21,549		137
British American Tobacco PLC		11,250		611
BT Group PLC		9,820		61
Burberry Group PLC		1,083		27
Centrica PLC		7,519		32
Compass Group PLC		3,291		56
Diageo PLC		14,967		429
Experian PLC		2,141		36
GKN PLC		4,999		27
GlaxoSmithKline PLC		5,632		121
Glencore PLC		11,482		53
HSBC Holdings PLC		21,071		199
Imperial Tobacco Group PLC		5,835		256
Indivior PLC (a)		3,823		9
J Sainsbury PLC		5,649		21
Legal & General Group PLC		9,937		38
Lloyds Banking Group PLC (a)		56,871		67
Marks & Spencer Group PLC		2,749		20
National Grid PLC		5,325		76
Next PLC		305		32
Pearson PLC		1,258		23
Prudential PLC		3,531		81
Reckitt Benckiser Group PLC		3,823		308
Reed Elsevier PLC		2,928		50
Rio Tinto PLC		1,475		68
Rolls-Royce Holdings PLC (a)		2,609		35
Royal Bank of Scotland Group PLC (a)		3,122		19
Royal Dutch Shell PLC, Class A		7,411		246
Shire PLC		747		53
Signet Jewelers Ltd.		3,078		405
SSE PLC		1,760		44

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
United Kingdom (cont'd)
Standard Chartered PLC		2,445	$	37
Tate & Lyle PLC		2,120		20
Tesco PLC		49,902		145
Tullow Oil PLC		1,439		9
Unilever PLC		7,618		309
Vodafone Group PLC		29,966		103
Whitbread PLC		346		26
WM Morrison Supermarkets PLC		10,096		29
Wolseley PLC		817		47
WPP PLC		2,179		45
				4,934
United States (12.0%)
3M Co.		1,100		181
Abbott Laboratories		11,851		534
AbbVie, Inc.		11,936		781
Accenture PLC, Class A		1,000		89
Actavis PLC (a)		2,025		521
Adobe Systems, Inc. (a)		1,200		87
AES Corp.		3,781		52
Aetna, Inc.		2,163		192
Agilent Technologies, Inc.		2,041		84
AGL Resources, Inc.		682		37
Air Products & Chemicals, Inc.		800		115
Alexion Pharmaceuticals, Inc. (a)		1,515		280
Allergan, Inc.		2,424		515
Altria Group, Inc.		12,186		600
Amazon.com, Inc. (a)		500		155
Ameren Corp.		1,385		64
American Electric Power Co., Inc.		2,790		169
American Express Co.		1,400		130
American International Group, Inc.		2,200		123
AmerisourceBergen Corp.		2,708		244
Amgen, Inc.		5,637		898
Anadarko Petroleum Corp.		1,100		91
Analog Devices, Inc.		2,700		150
Anthem, Inc.		2,568		323
Apple, Inc.		7,700		850
Applied Materials, Inc.		4,300		107
Archer-Daniels-Midland Co.		2,507		130
AT&T, Inc.		5,800		195
AutoZone, Inc. (a)		200		124
Avon Products, Inc.		1,620		15
Bank of America Corp.		13,500		242
Baxter International, Inc.		3,308		242
Becton Dickinson and Co.		1,169		163
Bed Bath & Beyond, Inc. (a)		8,400		640
Berkshire Hathaway, Inc., Class B (a)		2,100		315
Best Buy Co., Inc.		15,700		612
Biogen Idec, Inc. (a)		1,735		589
Blackhawk Network Holdings, Inc. (a)		114		4
Bloomin' Brands, Inc. (a)		5,500		136

	Shares		Value (000)
Boeing Co. (The)		1,000	$	130
Boston Properties, Inc. REIT		1,000		129
Boston Scientific Corp. (a)		8,144		108
Bristol-Myers Squibb Co.		12,439		734
Brown-Forman Corp., Class B		336		30
Bunge Ltd.		778		71
California Resources Corp. (a)		480		3
Campbell Soup Co.		902		40
Capital One Financial Corp.		1,100		91
Cardinal Health, Inc.		2,060		166
CareFusion Corp. (a)		1,246		74
Carter's, Inc.		2,500		218
Caterpillar, Inc.		1,100		101
CBS Corp., Class B		1,400		77
Celgene Corp. (a)		6,067		679
CenterPoint Energy, Inc.		2,450		57
Cerner Corp. (a)		1,865		121
Chevron Corp.		2,200		247
Chubb Corp. (The)		2,000		207
Church & Dwight Co., Inc.		464		37
Cigna Corp.		1,610		166
Cisco Systems, Inc.		6,600		184
Citigroup, Inc.		3,900		211
Clorox Co. (The)		2,149		224
CMS Energy Corp.		1,571		55
Coca-Cola Co.		21,252		897
Coca-Cola Enterprises, Inc.		1,021		45
Colgate-Palmolive Co.		3,768		261
Comcast Corp., Class A		3,300		191
ConAgra Foods, Inc.		1,594		58
ConocoPhillips		1,800		124
Consolidated Edison, Inc.		4,574		302
Constellation Brands, Inc., Class A (a)		812		80
Costco Wholesale Corp.		2,922		414
Covidien PLC		2,760		282
CR Bard, Inc.		456		76
Crown Castle International Corp.		1,000		79
CVS Health Corp.		6,841		659
Darden Restaurants, Inc.		5,005		293
DaVita HealthCare Partners, Inc. (a)		1,055		80
Deere & Co.		1,200		106
Delta Air Lines, Inc.		2,300		113
DENTSPLY International, Inc.		868		46
Dollar General Corp. (a)		12,209		863
Dollar Tree, Inc. (a)		9,500		669
Dominion Resources, Inc.		3,330		256
Dow Chemical Co. (The)		2,100		96
Dr. Pepper Snapple Group, Inc.		898		64
DTE Energy Co.		3,609		312
Duke Energy Corp.		4,038		337
eBay, Inc. (a)		1,600		90
Edison International		1,863		122
Edwards Lifesciences Corp. (a)		648		83

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
United States (cont'd)
EI du Pont de Nemours & Co.		1,800	$	133
Eli Lilly & Co.		5,986		413
EMC Corp.		3,900		116
Emerson Electric Co.		2,100		130
Energizer Holdings, Inc.		134		17
Ensco PLC, Class A		1,700		51
Entergy Corp.		1,026		90
EOG Resources, Inc.		1,200		110
Estee Lauder Cos., Inc. (The), Class A		973		74
Exelon Corp.		4,890		181
Express Scripts Holding Co. (a)		5,774		489
Exxon Mobil Corp.		5,100		472
Facebook, Inc., Class A (a)		2,000		156
Family Dollar Stores, Inc.		4,836		383
FedEx Corp.		800		139
FirstEnergy Corp.		2,397		93
Fiserv, Inc. (a)		2,100		149
Ford Motor Co.		6,200		96
Freeport-McMoRan, Inc.		2,200		51
G-III Apparel Group Ltd. (a)		1,100		111
Gap, Inc. (The)		19,100		804
General Electric Co.		12,300		311
General Mills, Inc.		4,913		262
General Motors Co.		2,300		80
Gilead Sciences, Inc. (a)		11,262		1,062
Goldman Sachs Group, Inc. (The)		800		155
Google, Inc., Class A (a)		300		159
Google, Inc., Class C (a)		300		158
H&R Block, Inc.		12,200		411
Halliburton Co.		2,200		87
Halyard Health, Inc. (a)		189		9
Hanesbrands, Inc.		3,193		356
Health Care REIT, Inc.		1,900		144
Herbalife Ltd.		192		7
Hershey Co. (The)		792		82
Hewlett-Packard Co.		2,600		104
Home Depot, Inc.		61,700		6,477
Honeywell International, Inc.		1,300		130
Hormel Foods Corp.		769		40
Hospira, Inc. (a)		1,030		63
Humana, Inc.		940		135
Ingersoll-Rand PLC		1,900		120
Integrys Energy Group, Inc.		458		36
Intel Corp.		6,200		225
International Business Machines Corp.		1,200		193
Intuitive Surgical, Inc. (a)		220		116
JM Smucker Co. (The)		237		24
Johnson & Johnson		20,446		2,138
Johnson Controls, Inc.		1,500		73
JPMorgan Chase & Co.		4,600		288
Kellogg Co.		1,020		67
Keurig Green Mountain, Inc.		533		71

	Shares		Value (000)
KeyCorp		9,200	$	128
Kimberly-Clark Corp.		1,516		175
Kohl's Corp.		9,300		568
Kraft Foods Group, Inc.		2,400		150
Kroger Co. (The)		2,147		138
L Brands, Inc.		8,327		721
Laboratory Corp. of America Holdings (a)		517		56
Lorillard, Inc.		1,382		87
Lowe's Cos., Inc.		32,653		2,247
Macy's, Inc.		15,600		1,026
Mallinckrodt PLC (a)		688		68
Marathon Petroleum Corp.		900		81
Marriott International, Inc., Class A		9,818		766
Mastercard, Inc., Class A		1,700		146
McCormick & Co., Inc.		328		24
McDonald's Corp.		1,500		141
McKesson Corp.		1,919		398
Mead Johnson Nutrition Co.		898		90
Medtronic, Inc.		8,165		590
Men's Wearhouse, Inc. (The)		1,800		79
Merck & Co., Inc.		21,156		1,201
MetLife, Inc.		2,400		130
Micron Technology, Inc. (a)		2,000		70
Microsoft Corp.		9,000		418
Molson Coors Brewing Co., Class B		781		58
Mondelez International, Inc., Class A		10,268		373
Monsanto Co.		800		96
Monster Beverage Corp. (a)		542		59
Mylan, Inc. (a)		2,297		129
Netflix, Inc. (a)		100		34
NextEra Energy, Inc.		2,489		265
NIKE, Inc., Class B		1,700		163
NiSource, Inc.		1,793		76
Noble Energy, Inc.		1,400		66
Nordstrom, Inc.		8,400		667
Northeast Utilities		1,808		97
NRG Energy, Inc.		1,937		52
Nucor Corp.		2,000		98
Occidental Petroleum Corp.		1,200		97
Oracle Corp.		4,300		193
Parker Hannifin Corp.		900		116
Patterson Cos., Inc.		529		25
Pepco Holdings, Inc.		1,441		39
PepsiCo, Inc.		8,356		790
PerkinElmer, Inc.		694		30
Perrigo Co., PLC		821		137
PetSmart, Inc.		4,600		374
Pfizer, Inc.		46,484		1,448
PG&E Corp.		2,691		143
Philip Morris International, Inc.		9,088		740
Phillips 66		1,200		86
Pinnacle West Capital Corp.		630		43
Pioneer Natural Resources Co.		400		60

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
United States (cont'd)
PPG Industries, Inc.		600	$	139
PPL Corp.		3,805		138
Priceline Group, Inc. (a)		100		114
Procter & Gamble Co. (The)		14,567		1,327
ProLogis, Inc. REIT		2,800		121
Prudential Financial, Inc.		1,400		127
Public Service Enterprise Group, Inc.		2,885		119
QUALCOMM, Inc.		2,100		156
Quest Diagnostics, Inc.		878		59
Raytheon Co.		1,000		108
Regeneron Pharmaceuticals, Inc. (a)		553		227
Republic Services, Inc.		2,900		117
Reynolds American, Inc.		1,340		86
Roper Industries, Inc.		800		125
Ross Stores, Inc.		7,980		752
Safeway, Inc.		977		34
Salesforce.com, Inc. (a)		1,100		65
SCANA Corp.		811		49
Schlumberger Ltd.		1,800		154
Sempra Energy		1,318		147
Southern Co. (The)		5,112		251
St. Jude Medical, Inc.		1,735		113
Starbucks Corp.		1,400		115
Starwood Hotels & Resorts Worldwide, Inc.		1,100		89
Steven Madden Ltd. (a)		2,317		74
Stryker Corp.		1,826		172
SunTrust Banks, Inc.		2,900		122
Sysco Corp.		2,350		93
T. Rowe Price Group, Inc.		1,600		137
Target Corp.		26,165		1,986
TECO Energy, Inc.		1,332		27
Tenet Healthcare Corp. (a)		604		31
Thermo Fisher Scientific, Inc.		2,443		306
Time Warner Cable, Inc.		600		91
Time Warner, Inc.		1,700		145
Time, Inc.		212		5
TJX Cos., Inc. (The)		21,867		1,500
Twenty-First Century Fox, Inc., Class A		3,400		131
Twenty-First Century Fox, Inc., Class B		161		6
Tyson Foods, Inc., Class A		1,132		45
Union Pacific Corp.		1,600		191
United Parcel Service, Inc., Class B		1,200		133
United Technologies Corp.		1,100		127
UnitedHealth Group, Inc.		7,528		761
Universal Health Services, Inc., Class B		555		62
Urban Outfitters, Inc. (a)		6,100		214
Valero Energy Corp.		1,500		74
Varian Medical Systems, Inc. (a)		632		55
Ventas, Inc. REIT		1,700		122

	Shares		Value (000)
Verizon Communications, Inc.		1,444	$	67
Verizon Communications, Inc.		3,400		159
Vertex Pharmaceuticals, Inc. (a)		1,455		173
Visa, Inc., Class A		700		184
Wal-Mart Stores, Inc.		8,364		718
Walgreens Boots Alliance, Inc.		5,125		391
Walt Disney Co. (The)		2,100		198
Waters Corp. (a)		514		58
Wells Fargo & Co.		5,600		307
Whole Foods Market, Inc.		1,477		74
Williams-Sonoma, Inc.		4,200		318
Wisconsin Energy Corp.		1,288		68
WW Grainger, Inc.		400		102
Xcel Energy, Inc.		8,982		323
Yahoo!, Inc. (a)		1,800		91
Zimmer Holdings, Inc.		2,335		265
Zoetis, Inc.		3,029		130
				70,798
Total Common Stocks (Cost $96,025)				96,739
	No. of Rights
Rights (0.0%)
Australia (0.0%)
APA Group (a) (Cost $—)		342		—	@
	Shares
Investment Companies (0.4%)
United Kingdom (0.4%)
ETFS Daily Short Copper (a)		70,400		2,377
United States (0.0%)
SPDR S&P 500 ETF Trust		303		62
Total Investment Companies (Cost $2,343)				2,439
	Face Amount (000)
Fixed Income Security (0.3%)
Brazil (0.3%)
Sovereign (0.3%)
Brazil Notas do Tesouro Nacional, Series F, 10.00%, 1/1/25 (Cost $1,797)	BRL	5,510		1,816
	Shares
Short-Term Investments (85.7%)
Investment Company (84.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $496,892)		496,891,723		496,892

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Face Amount (000)		Value (000)
U.S. Treasury Securities (1.7%)
U.S. Treasury Bills, 0.04%, 2/12/15 (b)(c)	$	3,085	$	3,085
0.05%, 2/12/15 (b)(c)		7,147		7,147
Total U.S. Treasury Securities (Cost $10,232)				10,232
Total Short-Term Investments (Cost $507,124)				507,124
Total Investments (102.8%) (Cost $607,289) (d)(e)				608,118
Liabilities in Excess of Other Assets (-2.8%)				(16,675	)
Net Assets (100.0%)			$	591,443

(a) Non-income producing security.

(b) Rate shown is the yield to maturity at December 31, 2014.

(d) The approximate fair value and percentage of net assets, $25,209,000 and 4.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) Securities are available for collateral in connection with open foreign currency forward exchange contracts, futures contracts and swap agreements.

@ Value is less than $500.

CDI CHESS Depositary Interest.

CVA Certificaten Van Aandelen.

REIT Real Estate Investment Trust.

SPDR Standard & Poor's Depository Receipt.

BRL — Brazillian Real

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at December 31, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
Bank of America NA	PLN	10,978	$	3,099	1/15/15	USD	3,251	$	3,251	$	152
Bank of America NA	USD	1,553		1,553	1/15/15	CHF	1,490		1,499		(54	)
Bank of America NA	USD	491		491	1/15/15	GBP	312		486		(5	)
Bank of Montreal	HUF	1,164,096		4,449	1/15/15	USD	4,637		4,637		188
Bank of Montreal	NZD	9,723		7,578	1/15/15	USD	7,545		7,545		(33	)
Bank of Montreal	TRY	11,752		5,018	1/15/15	USD	4,913		4,913		(105	)
Bank of Montreal	USD	1,067		1,067	1/15/15	NZD	1,366		1,065		(2	)
Bank of New York Mellon	USD	653		653	1/15/15	GBP	415		647		(6	)
Barclays Bank PLC	AUD	17,627		14,380	1/15/15	USD	14,452		14,452		72
Barclays Bank PLC	INR	303,847		4,803	1/15/15	USD	4,839		4,839		36
Barclays Bank PLC	KRW	3,317,272		3,017	1/15/15	USD	3,002		3,002		(15	)
Barclays Bank PLC	USD	2,448		2,448	1/15/15	AUD	2,993		2,442		(6	)
Barclays Bank PLC	USD	6,949		6,949	1/15/15	EUR	5,548		6,713		(236	)
Barclays Bank PLC	USD	914		914	1/15/15	GBP	581		906		(8	)
Citibank NA	CHF	589		593	1/15/15	USD	614		614		21
Citibank NA	IDR	71,814,354		5,788	1/15/15	USD	5,755		5,755		(33	)
Citibank NA	JPY	1,004,472		8,386	1/15/15	USD	8,575		8,575		189
Citibank NA	JPY	436,779		3,647	1/15/15	USD	3,643		3,643		(4	)
Citibank NA	KRW	770,582		700	1/15/15	USD	701		701		1
Citibank NA	USD	26,589		26,589	1/15/15	EUR	21,250		25,716		(873	)
Commonwealth Bank of Australia	NZD	26,523		20,671	1/15/15	USD	20,583		20,583		(88	)
Credit Suisse International	ILS	17,662		4,528	1/15/15	USD	4,521		4,521		(7	)
Deutsche Bank AG	CHF	2,394		2,409	1/15/15	USD	2,495		2,495		86
Deutsche Bank AG	CLP	3,341,004		5,498	1/15/15	USD	5,391		5,391		(107	)
Deutsche Bank AG	GBP	359		559	1/15/15	USD	564		564		5
Deutsche Bank AG	JPY	522,910		4,366	1/15/15	USD	4,464		4,464		98
Deutsche Bank AG	PLN	4,757		1,343	1/15/15	USD	1,409		1,409		66
Deutsche Bank AG	USD	549		549	1/15/15	EUR	439		531		(18	)
Deutsche Bank AG	USD	3,180		3,180	1/15/15	GBP	2,039		3,179		(1	)
Goldman Sachs International	AUD	22,451		18,316	1/15/15	USD	18,409		18,409		93
Goldman Sachs International	AUD	1,643		1,341	1/15/15	USD	1,340		1,340		(1	)
Goldman Sachs International	EUR	80,345		97,232	1/15/15	USD	100,532		100,532		3,300
Goldman Sachs International	EUR	2,189		2,649	1/15/15	USD	2,649		2,649		—	@
Goldman Sachs International	HKD	43,038		5,550	1/15/15	USD	5,549		5,549		(1	)
Goldman Sachs International	JPY	96,914		809	1/15/15	USD	827		827		18
Goldman Sachs International	TWD	137,923		4,365	1/15/15	USD	4,423		4,423		58
Goldman Sachs International	USD	13,996		13,996	1/15/15	EUR	11,182		13,532		(464	)
JPMorgan Chase Bank NA	MYR	20,632		5,896	1/15/15	USD	5,886		5,886		(10	)
JPMorgan Chase Bank NA	NZD	2,426		1,890	1/15/15	USD	1,882		1,882		(8	)
JPMorgan Chase Bank NA	RUB	150,489		2,474	1/15/15	USD	2,655		2,655		181
JPMorgan Chase Bank NA	RUB	34,311		564	1/15/15	USD	614		614		50

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Foreign Currency Forward Exchange Contracts (cont'd):

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
JPMorgan Chase Bank NA	USD	6,274	$	6,274	1/15/15	EUR	5,055	$	6,117	$	(157	)
JPMorgan Chase Bank NA	USD	386		386	1/15/15	ZAR	4,554		393		7
Northern Trust Company	SGD	6,078		4,587	1/15/15	USD	4,662		4,662		75
Royal Bank of Scotland PLC	BRL	2,996		1,124	1/15/15	USD	1,121		1,121		(3	)
Royal Bank of Scotland PLC	BRL	2,977		1,117	1/15/15	USD	1,097		1,097		(20	)
Royal Bank of Scotland PLC	BRL	1,081		406	1/15/15	USD	405		405		(1	)
Royal Bank of Scotland PLC	MXN	32,253		2,185	1/15/15	USD	2,174		2,174		(11	)
Royal Bank of Scotland PLC	USD	1,568		1,568	1/15/15	BRL	4,166		1,562		(6	)
Royal Bank of Scotland PLC	USD	4,295		4,295	1/15/15	EUR	3,433		4,154		(141	)
Royal Bank of Scotland PLC	USD	9,998		9,998	1/15/15	JPY	1,171,169		9,779		(219	)
State Street Bank and Trust Co.	MXN	41,165		2,789	1/15/15	USD	2,775		2,775		(14	)
State Street Bank and Trust Co.	THB	169,343		5,145	1/15/15	USD	5,082		5,082		(63	)
State Street Bank and Trust Co.	USD	331		331	1/15/15	SEK	2,524		323		(8	)
State Street Bank and Trust Co.	USD	1,111		1,111	1/15/15	SEK	8,696		1,116		5
UBS AG	NZD	10,978		8,555	1/15/15	USD	8,519		8,519		(36	)
UBS AG	USD	1,383		1,383	1/15/15	CHF	1,327		1,335		(48	)
UBS AG	USD	13,804		13,804	1/15/15	EUR	11,032		13,351		(453	)
UBS AG	USD	544		544	1/15/15	HKD	4,219		544		(—	@)
UBS AG	USD	545		545	1/15/15	MXN	8,079		548		3
UBS AG	USD	1,251		1,251	1/15/15	RUB	87,957		1,446		195
UBS AG	USD	2,820		2,820	1/15/15	RUB	186,908		3,073		253
UBS AG	ZAR	55,345		4,776	1/15/15	USD	4,692		4,692		(84	)
UBS AG	ZAR	7,814		674	1/15/15	USD	673		673		(1	)
			$	375,975				$	377,777	$	1,802

Futures Contracts:

The Portfolio had the following futures contracts open at December 31, 2014:

	Number of Contracts		Value (000)			Expiration Date	Unrealized Appreciation (Depreciation) (000)
Long:
CAC 40 Index (France)		2	$	104		Jan-15	$	7
Corn Futures (United States)		234		4,926		Dec-15		(135	)
Euro Stoxx 50 Index (Germany)		1,123		42,574		Mar-15		(209	)
FTSE 100 Index (United Kingdom)		79		8,031		Mar-15		349
Hang Seng Index (Hong Kong)		7		1,067		Jan-15		—	@
MSCI Emerging Market E Mini (United States)		595		28,492		Mar-15		299
NIKKEI 225 Index (Japan)		357		25,796		Mar-15		(673	)
S&P 500 E MINI Index (United States)		545		55,928		Mar-15		1,066
SPI 200 Index (Australia)		35		3,845		Mar-15		144
Short:
China H-Shares Index (Hong Kong)		204		(15,769	)	Jan-15		(314	)
FTSE China A50 Index (Singapore)		918		(10,695	)	Jan-15		(1,207	)
Soybean Futures (United States)		75		(3,771	)	Nov-15		24
Wheat Futures (United States)		39		(1,199	)	Dec-15		69
							$	(580	)

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Credit Default Swap Agreements:

The Portfolio had the following credit default swap agreements open at December 31, 2014:

Swap Counterparty and Reference Obligation	Buy/Sell Protection	Notional Amount (000)		Pay/Receive Fixed Rate			Termination Date	Upfront Payment Paid (Received) (000)			Unrealized Depreciation (000)			Value (000)			Credit Rating of Reference Obligation† (Unaudited)
Barclays Bank PLC Russian Federation	Sell	$	5,904		1.00	%	3/20/20	$	(815	)	$	(145	)	$	(960	)	BBB-
Barclays Bank PLC Russian Federation	Sell		3,270		1.00		3/20/20		(452	)		(80	)		(532	)	BBB-
Goldman Sachs International Australian Government	Buy		1,195		1.00		3/20/20		(35	)		(4	)		(39	)	AAA
Goldman Sachs International Australian Government	Buy		225		1.00		3/20/20		(7	)		(1	)		(8	)	AAA
Goldman Sachs International Australian Government	Buy		3,117		1.00		3/20/20		(91	)		(17	)		(108	)	AAA
JPMorgan Chase Bank NA People's Republic of China	Buy		7,212		1.00		3/20/20		12			(63	)		(51	)	BBB-
JPMorgan Chase Bank NA Australian Government	Buy		4,315		1.00		3/20/20		(126	)		(16	)		(142	)	AAA
JPMorgan Chase Bank NA Australian Government	Buy		3,661		1.00		3/20/20		(107	)		(14	)		(121	)	AAA
JPMorgan Chase Bank NA Australian Government	Buy		264		1.00		3/20/20		(8	)		(1	)		(9	)	AAA
JPMorgan Chase Bank NA People's Republic of China	Buy		2,132		1.00		3/20/20		4			(19	)		(15	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		1,178		1.00		3/20/20		(5	)		(3	)		(8	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		302		1.00		3/20/20		(1	)		(1	)		(2	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		3,210		1.00		3/20/20		(14	)		(9	)		(23	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		2,527		1.00		3/20/20		(11	)		(7	)		(18	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		1,528		1.00		3/20/20		(7	)		(4	)		(11	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		2,879		1.00		3/20/20		(12	)		(8	)		(20	)	BBB-
JPMorgan Chase Bank NA People's Republic of China	Buy		5,188		1.00		3/20/20		(22	)		(14	)		(36	)	BBB-
JPMorgan Chase Bank NA Australian Government	Buy		2,820		1.00		3/20/20		(88	)		(4	)		(92	)	AAA
JPMorgan Chase Bank NA Australian Government	Buy		4,901		1.00		3/20/20		(154	)		(8	)		(162	)	AAA
JPMorgan Chase Bank NA Australian Government	Buy		2,320		1.00		3/20/20		(73	)		(4	)		(77	)	AAA
JPMorgan Chase Bank NA Russian Federation	Sell		1,115		1.00		3/20/20		(152	)		(30	)		(182	)	BBB-
JPMorgan Chase Bank NA Russian Federation	Sell		1,362		1.00		3/20/20		(185	)		(36	)		(221	)	BBB-
JPMorgan Chase Bank NA Russian Federation	Sell		31		1.00		3/20/20		(4	)		(1	)		(5	)	BBB-
JPMorgan Chase Bank NA Russian Federation	Sell		1,331		1.00		3/20/20		(181	)		(35	)		(216	)	BBB-
JPMorgan Chase Bank NA Russian Federation	Sell		600		1.00		3/20/20		(82	)		(16	)		(98	)	BBB-
JPMorgan Chase Bank NA Russian Federation	Sell		417		1.00		3/20/20		(57	)		(11	)		(68	)	BBB-
		$	63,004					$	(2,673	)	$	(551	)	$	(3,224	)

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Interest Rate Swap Agreements:

The Portfolio had the following interest rate swap agreements open at December 31, 2014:

Swap Counterparty	Notional Amount (000)		Floating Rate Index	Pay/Receive Floating Rate	Fixed Rate			Termination Date	Unrealized Appreciation (Depreciation) (000)
Morgan Stanley & Co., LLC*	$	24,735	3 Month LIBOR	Receive		1.30	%	9/22/17	$	(159	)
Morgan Stanley & Co., LLC*		24,735	3 Month LIBOR	Receive		1.30		9/23/17		(155	)
JPMorgan Chase Bank NA	AUD	4,840	3 Month LIBOR	Pay		2.80		11/24/17		45
JPMorgan Chase Bank NA		7,460	3 Month LIBOR	Pay		2.82		10/13/17		70
JPMorgan Chase Bank NA		7,530	3 Month BBSW	Pay		2.82		10/30/17		70
JPMorgan Chase Bank NA		23,250	3 Month BBSW	Pay		3.04		9/22/17		318
JPMorgan Chase Bank NA		23,250	3 Month BBSW	Pay		3.05		9/19/17		323
									$	512

Total Return Swap Agreements:

The Portfolio had the following total return swap agreements open at December 31, 2014:

Swap Counterparty

Index

Notional
Amount
(000)

Floating
Rate

Pay/Receive
Total Return
of Referenced
Index

Maturity
Date

Unrealized
Appreciation
(Depreciation)
(000)

Bank of America NA

Bank of America Copper
Proxy Index††

5,074

3 Month USD LIBOR minus
0.38%

Pay

9/25/15

(68

)

Bank of America NA

Bank of America Copper
Proxy Index††

1,911

3 Month USD LIBOR minus
0.38%

Pay

9/25/15

(25

)

Bank of America NA

Bank of America Copper
Proxy Index††

4,877

3 Month USD LIBOR minus
0.38%

Pay

9/25/15

(17

)

Bank of America NA

Bank of America Copper
Proxy Index††

1,124

3 Month USD LIBOR minus
0.38%

Pay

9/25/15

(15

)

Deutsche Bank AG

DB Hong Kong ex RE
Index††

HKD

87,211

3 Month HKD HIBOR minus
0.40%

Pay

9/4/15

381

Barclays Bank PLC

Barclays EM Consumer
Staples Index††

1,906

3 Month USD LIBOR minus
0.65%

Pay

10/23/15

(130

)

Barclays Bank PLC

Barclays EM Consumer
Staples Index††

873

3 Month USD LIBOR minus
0.65%

Pay

10/23/15

Barclays Bank PLC

Barclays EM Consumer
Staples Index††

12,906

3 Month USD LIBOR minus
0.65%

Pay

10/23/15

673

Deutsche Bank AG

DB Hong Kong ex RE
Index††

HKD

16,302

3 Month HKD HIBOR minus
0.40%

Pay

9/4/15

(73

)

Deutsche Bank AG

DB Hong Kong ex RE
Index††

76,473

3 Month HKD HIBOR minus
0.40%

Pay

9/4/15

334

Deutsche Bank AG

DB Hong Kong ex RE
Index††

16,834

3 Month HKD HIBOR minus
0.40%

Pay

9/4/15

Deutsche Bank AG

DB Hong Kong ex RE
Index††

25,518

3 Month HKD HIBOR minus
0.40%

Pay

9/7/15

111

Deutsche Bank AG

DB Global Machinery
Index††

12,566

3 Month USD LIBOR minus
0.35%

Pay

11/10/15

314

Deutsche Bank AG

DB Global Machinery
Index††

1,359

3 Month USD LIBOR minus
0.35%

Pay

11/10/15

Goldman Sachs
International

GS US Aircraft Leasing
Index††

513

3 Month USD LIBOR minus
0.29%

Pay

9/25/15

Goldman Sachs
International

GS US Aircraft Leasing
Index††

3,095

3 Month USD LIBOR minus
0.29%

Pay

9/25/15

Goldman Sachs
International

GS Global Machinery
Index††

1,388

3 Month USD LIBOR minus
0.45%

Pay

11/11/15

(23

)

Goldman Sachs
International

GS Global Machinery
Index††

12,681

3 Month USD LIBOR minus
0.45%

Pay

11/11/15

192

Goldman Sachs
International

GS Global Iron
Index††

11,083

3 Month USD LIBOR minus
0.51%

Pay

11/16/15

1,474

The accompanying notes are an integral part of the financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Total Return Swap Agreements (cont'd):

Swap Counterparty

Index

Notional
Amount
(000)

Floating
Rate

Pay/Receive
Total Return
of Referenced
Index

Maturity
Date

Unrealized
Appreciation
(Depreciation)
(000)

Goldman Sachs
International

GS Auto Components
Index††

8,368

3 Month USD LIBOR minus
0.25%

Pay

12/17/15

(158

)

Goldman Sachs
International

GS Russian Exposed
Index††

17,558

3 Month USD LIBOR plus
0.02%

Pay

12/31/15

204

JPMorgan Chase
Bank NA

JPM MSCI China
Index††

HKD

12,705

3 Month HKD HIBOR minus
0.29%

Pay

8/26/15

(96

)

JPMorgan Chase
Bank NA

JPM MSCI China
Index††

79,762

3 Month HKD HIBOR minus
0.29%

Pay

8/26/15

(601

)

JPMorgan Chase
Bank NA

JPM MSCI China
Index††

9,556

3 Month HKD HIBOR minus
0.22%

Pay

8/26/15

(72

)

JPMorgan Chase
Bank NA

JPM Aerospace
Index††

3,258

3 Month USD LIBOR minus
0.26%

Pay

9/7/15

(126

)

JPMorgan Chase
Bank NA

JPM Aerospace
Index††

6,309

3 Month USD LIBOR minus
0.26%

Pay

9/7/15

140

JPMorgan Chase
Bank NA

JPM Aerospace
Index††

889

3 Month USD LIBOR minus
0.26%

Pay

9/7/15

JPMorgan Chase
Bank NA

JPM Aerospace
Index††

3,441

3 Month USD LIBOR minus
0.26%

Pay

9/7/15

JPMorgan Chase
Bank NA

JPM Aerospace
Index††

39,572

3 Month USD LIBOR minus
0.26%

Pay

9/8/15

875

JPMorgan Chase
Bank NA

JPM US Machinery
Index††

2,049

3 Month USD LIBOR minus
0.245%

Pay

11/9/15

(85

)

JPMorgan Chase
Bank NA

JPM US Machinery
Index††

890

3 Month USD LIBOR minus
0.245%

Pay

11/9/15

JPMorgan Chase
Bank NA

JPM US Machinery
Index††

27,356

3 Month USD LIBOR minus
0.245%

Pay

11/9/15

291

JPMorgan Chase
Bank NA

MSCI AU Banks

AUD

1,643

3 Month AUD BBSW minus
0.23%

Pay

11/17/15

(79

)

JPMorgan Chase
Bank NA

MSCI AU Banks

15,864

3 Month AUD BBSW minus
0.23%

Pay

11/17/15

(230

)

JPMorgan Chase
Bank NA

JPM Custom US Beverage &
Tobacco Index††

$ 19,640

3 Month USD LIBOR plus
0.08%

Pay

12/23/15

167

3,648

†† See tables below for details of the equity basket holdings underlying the swap.

The following table represents the equity basket holdings underlying the total return swap with Bank of America Copper Proxy Index as of Decemeber 31, 2014.

Security Description	Index Weight
Bank of America Copper Proxy Index
Antofagasta PLC		7.03	%
Aurubis AG		2.78
Boliden AB		6.80
Freeport-McMoRan, Inc		37.04
Glencore PLC		24.73
Jiangxi Copper Co, Ltd		3.37
KAZ Minerals PLC		1.68
KGHM Polska Miedz SA		6.49
MMG Ltd		0.75
OZ Minerals Ltd		1.28
PanAust Ltd		0.90
Southern Copper Corp		7.15
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with DB Hong Kong ex RE Index as of Decemeber 31, 2014.

Security Description	Index Weight
DB Hong Kong ex RE Index
AIA Group Ltd.		24.33	%
ASM Pacific Technology Ltd.		0.99
Bank of East Asia Ltd.		1.94
BOC Hong Kong Holdings Ltd.		4.44
Cathay Pacific Airways Ltd.		1.01
Cheung Kong Infrastructure Holdings Ltd.		1.66
CLP Holdings Ltd.		6.32
First Pacific Co. Ltd. (Hong Kong)		0.89
Galaxy Entertainment Group Ltd.		5.20
Hang Seng Bank Ltd.		4.90
HKT Trust and HKT Ltd.		1.24
Hong Kong & China Gas Co. Ltd.		5.41
Hong Kong Exchanges and Clearing		7.99
Hutchinson Whampoa Ltd.		9.98
Li & Fung Ltd.		2.54
MGM China Holdings Ltd.		0.92

The accompanying notes are an integral part of the financial statements.
19

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Index Weight
DB Hong Kong ex RE Index (cont'd)
MTR Corp. Ltd.		2.27	%
NWS Holdings Ltd.		0.53
PCCW Ltd.		0.95
Power Assets Holdings Ltd.		4.87
Sands China Ltd.		5.12
Shangri-La Asia Ltd.		0.76
SJM Holdings Ltd.		1.20
Techtronic Industries Co. Ltd.		1.72
Wynn Macau Ltd.		1.70
Yue Yuen Industrial Holdings Ltd.		1.12
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with Barclays EM Consumer Staples Index as of Decemeber 31, 2014.

Security Description	Index Weight
Barclays EM Consumer Staples Index
AMBEV SA		22.60	%
BRF SA		5.64
Fomento Economico Mexicano SAB de CV		19.53
Hengan International Group Co., Ltd.		9.35
Magnit PJSC		12.57
Uni-President Enterprises Corp.		8.30
Wal-Mart de Mexico SAB de CV		12.70
Want Want China Holdings, Ltd.		9.31
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with GS Global Machinery Index as of Decemeber 31, 2014.

Security Description	Index Weight
GS Global Machinery Index
Alfa Laval AB		2.68	%
Atlas Copco AB (ATCOA SS)		7.69
Atlas Copco AB (ATCOB SS)		4.12
CNH Industrial NV		3.40
Daewoo Shipbuilding & Marine		0.97
Doosan Infracore Co. Ltd.		0.58
GEA Group AG		3.21
Hino Motors Ltd.		1.41
Hitachi Construction Machinery Corp.		0.94
Hiwin Technologies Corp.		0.84
Hyundai Heavy Industries Co. Ltd.		2.61
Hyundai Mipo Dockyard Co. Ltd.		0.47
IMI PLC		2.51
JTEKT Corp.		1.50
Kawasaki Heavy Industries Ltd.		2.62
Komatsu Ltd.		8.37
Kone OYJ		5.71
Kubota Corp.		6.29
MAN SE		1.65
Melrose Industries PLC		2.04
Metso OYJ		1.67
NGK Insulators Ltd.		2.67

Security Description	Index Weight
GS Global Machinery Index (cont'd)
Samsung Heavy Industries Co. Ltd.		0.25	%
Sandvik AB		4.86
Schindler Holding AG (SCHN SE)		1.33
Schindler Holding AG (SCHP VX)		2.80
Sembcorp Marine Ltd.		0.90
SMC Corp. (Japan)		5.68
Sulzer AG		1.22
Sumitomo Heavy Industries Ltd.		1.17
United Tractors Tbk PT		1.17
Vallourec SA		1.45
Volvo AB		7.09
Wartsila OYJ Abp		2.96
Weichai Power Co. Ltd.		0.89
Weir Group PLC (The)		3.01
Yangzijiang Shipbuilding Holdings		0.74
Zoomlion Heavy Industry Science & Technology		0.53
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with GS US Aircraft Leasing Index as of Decemeber 31, 2014.

Security Description	Index Weight
GS US Aircraft Leasing Index
AerCap Holdings NV		62.67	%
Air Lease Corp		25.00
Aircastle Ltd		10.11
Fly Leasing Ltd		2.22
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with GS Global Iron Index as of Decemeber 31, 2014.

Security Description	Index Weight
GS Global Iron Index
African Rainbow Minerals Ltd.		0.56	%
Assore Ltd.		0.12
BHP Billiton Ltd.		42.03
Ferrexpo PLC		0.06
Fortescue Metals Group Ltd.		3.86
Kumba Iron Ore Ltd.		1.40
Rio Tinto PLC		36.99
Vale SA		14.98
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with GS Auto Components Index as of Decemeber 31, 2014.

Security Description	Index Weight
GS Auto Components Index
Aisin Seiki Co Ltd		2.37	%
Autoliv Inc		3.35
Borgwarner Inc		4.27
Bridgestone Corp		7.76
Cheng Shin Rubber Industry Co Ltd		1.30
Cie Generale des Etablissements Michelin		5.78

The accompanying notes are an integral part of the financial statements.
20

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Index Weight
GS Auto Components Index (cont'd)
Continental AG		7.96	%
Delphi Automotive PLC		7.42
Denso Corp		7.81
GKN PLC		3.00
Halla Visteon Climate Control Corp		0.56
Hankook Tire Co Ltd		1.22
Hyundai Mobis Co Ltd		5.01
Hyundai Wia Corp		0.89
Johnson Controls Inc		10.96
Koito Manufacturing Co Ltd		1.02
Magna International Inc		7.83
NGK Spark Plug Co Ltd		1.87
NHK Spring Co Ltd		0.48
NOK Corp		0.84
Nokian Renkaat OYJ		0.95
Pirelli & C SpA		1.10
Stanley Electric Co Ltd		1.06
Sumitomo Electric Industries Ltd		3.24
Sumitomo Rubber Industries Ltd		0.87
Toyoda Gosei Co Ltd		0.45
Toyota Industries Corp		2.87
TRW Automotive Holdings Corp		3.89
Valeo SA		3.22
Yokohama Rubber Co Ltd		0.65
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with GS Russian Exposed Index as of Decemeber 31, 2014.

Security Description	Index Weight
GS Russian Exposed Index
Avon Products, Inc.		0.46	%
Beiersdorf AG		2.30
Carlsberg A/S		1.35
Coca-Cola HBC AG		0.79
Danone SA		4.78
De' Longhi		0.30
Fortum OYJ		2.19
Heineken NV		4.61
Henkel AG & Co. KGaA		4.92
Imperial Tobacco Group PLC		4.72
Inchcape PLC		0.57
Inditex SA		10.07
Japan Tobacco, Inc.		6.27
Kia Motors Corp.		2.20
Mitsubishi Motors Corp.		1.03
Mondelez International, Inc.		6.75
Mondi PLC		0.89
Neste Oil OYJ		0.69
Nokian Renkaat OYJ		0.37
Procter & Gamble Co.		27.75
Telenor ASA		3.43
Unilever PLC		13.56
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM MSCI China Index as of Decemeber 31, 2014.

Security Description	Index Weight
JPM MSCI China Index
AAC Technologies Holdings Inc		0.61	%
Agricultural Bank of China Ltd		1.75
Bank of China Ltd		7.13
Bank of Communications Co Ltd		1.30
Beijing Enterprises Holdings Ltd		0.62
Brilliance China Automotive Holdings Ltd		0.77
Byd Co Ltd		0.40
China CITIC Bank Corp Ltd		1.05
China Communications Construction Co Ltd		0.86
China Construction Bank Corp		9.43
China Everbright International Ltd		0.57
China Gas Holdings Ltd		0.52
China Life Insurance Co Ltd		4.64
China Longyuan Power Group Corp Ltd		0.49
China Mengniu Dairy Co Ltd		0.94
China Merchants Bank Co Ltd		1.85
China Merchants Holdings International C		0.61
China Minsheng Banking Corp Ltd		1.35
China Mobile Ltd		10.64
China Oilfield Services Ltd		0.50
China Overseas Land & Investment Ltd		1.90
China Pacific Insurance Group Co Ltd		2.14
China Petroleum & Chemical Corp		3.29
China Resources Enterprise Ltd		0.39
China Resources Land Ltd		0.81
China Resources Power Holdings Co Ltd		0.76
China Shenhua Energy Co Ltd		1.62
China Telecom Corp Ltd		1.25
China Unicom Hong Kong Ltd		1.02
CITIC Ltd		0.45
CNOOC Ltd		3.73
Dongfeng Motor Group Co Ltd		0.60
ENN Energy Holdings Ltd		0.69
Great Wall Motor Co Ltd		0.94
Hengan International Group Co Ltd		1.24
Huaneng Power International Inc		0.67
ICBC		8.59
Kunlun Energy Co Ltd		0.49
Lenovo Group Ltd		1.28
PetroChina Co Ltd		3.72
PICC Property & Casualty Co Ltd		1.11
Ping An Insurance Group Co of China Ltd		3.37
Tencent Holdings Ltd		11.93
Tingyi Cayman Islands Holding Corp		0.73
Want Want China Holdings Ltd		1.25
		100.00	%

The accompanying notes are an integral part of the financial statements.
21

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Multi-Asset Portfolio

The following table represents the equity basket holdings underlying the total return swap with JPM Aerospace Index as of Decemeber 31, 2014.

Security Description	Index Weight
JPM Aerospace Index
Airbus Group NV		11.21	%
B/E Aerospace Inc		1.91
Boeing Co/The		31.71
Bombardier Inc		2.00
KLX, Inc		0.68
Precision Castparts Corp		12.36
Rolls-Royce Holdings PLC		7.47
Safran SA		7.47
Textron Inc		5.24
Thales SA		2.14
TransDigm Group Inc		3.29
United Technologies Corp		11.69
Zodiac Aerospace		2.83
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM US Machinery Index as of Decemeber 31, 2014.

Security Description	Index Weight
JPM US Machinery Index
AGCO Corp		1.53	%
Caterpillar Inc		22.67
Cummins Inc		9.81
Deere & Co		11.24
Dover Corp		4.63
Flowserve Corp		3.09
Illinois Tool Works Inc		13.82
Ingersoll-Rand PLC		6.61
Joy Global Inc		1.87
PACCAR Inc		9.19
Parker-Hannifin Corp		6.94
Pentair PLC		4.83
SPX Corp		1.24
Xylem Inc/NY		2.53
		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM Custom US Beverage & Tobacco Index as of Decemeber 31, 2014.

Security Description	Index Weight
JPM Custom US Beverage & Tobacco Index
Altria Group Inc		14.31	%
Brown-Forman Corp		2.73
Coca-Cola Co		26.76
Coca-Cola Enterprises Inc		1.54
Constellation Brands Inc		2.70
Dr Pepper Snapple Group Inc		2.05
Lorillard Inc		3.37
Molson Coors Brewing Co		1.97
PepsiCo Inc		20.93
Philip Morris International Inc		18.60
Reyonolds American Inc		5.04
		100.00	%

@ Value is less than $500.

† Credit rating as issued by Standard & Poor's.

* Cleared swap agreement, the broker is Morgan Stanley & Co., LLC.

BBSW Australia's Bank Bill Swap

LIBOR London Interbank Offered Rate.

HIBOR Hong Kong Interbank Offered Rate.

AUD — Australian Dollar

BRL — Brazilian Real

CHF — Swiss Franc

CLP — Chilean Peso

EUR — Euro

GBP — British Pound

HKD — Hong Kong Dollar

HUF — Hungarian Forint

IDR — Indonesian Rupiah

ILS — Israeli Shekel

INR — Indian Rupee

JPY — Japanese Yen

KRW — South Korean Won

MXN — Mexican Peso

MYR — Malaysian Ringgit

NZD — New Zealand Dollar

PLN — Polish Zloty

RUB — Russian Ruble

SEK — Swedish Krona

SGD — Singapore Dollar

THB — Thai Baht

TRY — Turkish Lira

TWD — Taiwan Dollar

USD — United States Dollar

ZAR — South African Rand

Portfolio Composition

Classification	Percentage of Total Investments
Short-Term Investments		83.4	%
Other*		16.6
Total Investments		100.0	%**

* Industries and/or investment types representing less than 5% of total investments.

** Does not include open long/short futures contracts with an underlying face amount of approximately $202,197,000 with net unrealized depreciation of approximately $580,000. Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $1,802,000 and does not include open swap agreements with net unrealized appreciation of approximately $3,609,000.

The accompanying notes are an integral part of the financial statements.
22

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Multi-Asset Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $110,397)	$	111,226
Investment in Security of Affiliated Issuer, at Value (Cost $496,892)		496,892
Total Investments in Securities, at Value (Cost $607,289)		608,118
Foreign Currency, at Value (Cost $171)		115
Cash		—	@
Receivable for Variation Margin on Futures Contracts		11,933
Unrealized Appreciation on Swap Agreements		6,272
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		5,152
Receivable for Portfolio Shares Sold		661
Dividends Receivable		88
Receivable from Affiliate		46
Tax Reclaim Receivable		20
Premium Paid on Open Swap Agreements		16
Receivable for Investments Sold		—	@
Other Assets		31
Total Assets		632,452
Liabilities:
Payable for Investments Purchased		25,345
Due to Broker		4,755
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		3,350
Premium Received on Open Swap Agreements		2,689
Unrealized Depreciation on Swap Agreements		2,349
Payable for Portfolio Shares Redeemed		1,316
Payable for Advisory Fees		913
Payable for Custodian Fees		108
Payable for Professional Fees		50
Payable for Shareholder Services Fees — Class A		11
Payable for Distribution and Shareholder Services Fees — Class L		27
Payable for Administration Fees		38
Payable for Sub Transfer Agency Fees — Class I		30
Payable for Sub Transfer Agency Fees — Class A		4
Payable for Sub Transfer Agency Fees — Class L		2
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class L		1
Payable for Variation Margin on Swap Agreements		1
Other Liabilities		19
Total Liabilities		41,009
Net Assets	$	591,443
Net Assets Consist Of:
Paid-in-Capital	$	602,232
Accumulated Undistributed Net Investment Income		2,825
Accumulated Net Realized Loss		(19,199	)
Unrealized Appreciation (Depreciation) on:
Investments		829
Futures Contracts		(580	)
Swap Agreements		3,609
Foreign Currency Forward Exchange Contracts		1,802
Foreign Currency Translations		(75	)
Net Assets	$	591,443

The accompanying notes are an integral part of the financial statements.
23

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Multi-Asset Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	495,419
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		42,883,418
Net Asset Value, Offering and Redemption Price Per Share	$	11.55
CLASS A:
Net Assets	$	54,771
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		4,764,021
Net Asset Value, Redemption Price Per Share	$	11.50
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.64
Maximum Offering Price Per Share	$	12.14
CLASS L:
Net Assets	$	41,253
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		3,622,011
Net Asset Value, Offering and Redemption Price Per Share	$	11.39

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
24

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Multi-Asset Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $142 of Foreign Taxes Withheld)	$	2,071
Interest from Securities of Unaffiliated Issuers		1,104
Dividends from Security of Affiliated Issuer (Note G)		175
Total Investment Income		3,350
Expenses:
Advisory Fees (Note B)		3,264
Custodian Fees (Note F)		624
Shareholder Services Fees — Class A (Note D)		94
Distribution and Shareholder Services Fees — Class L (Note D)		257
Administration Fees (Note C)		307
Sub Transfer Agency Fees		1
Sub Transfer Agency Fees — Class I		123
Sub Transfer Agency Fees — Class A		12
Sub Transfer Agency Fees — Class L		3
Professional Fees		119
Registration Fees		74
Pricing Fees		72
Shareholder Reporting Fees		26
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Directors' Fees and Expenses		7
Other Expenses		17
Total Expenses		5,008
Rebate from Morgan Stanley Affiliate (Note G)		(358	)
Waiver of Advisory Fees (Note B)		(287	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(126	)
Net Expenses		4,237
Net Investment Loss		(887	)
Realized Gain (Loss):
Investments Sold		(4,186	)
Foreign Currency Forward Exchange Contracts		16,545
Foreign Currency Transactions		(150	)
Futures Contracts		(13,882	)
Swap Agreements		(2,675	)
Net Realized Loss		(4,348	)
Change in Unrealized Appreciation (Depreciation):
Investments		(1,417	)
Foreign Currency Forward Exchange Contracts		1,764
Foreign Currency Translations		(82	)
Futures Contracts		(2,004	)
Swap Agreements		4,245
Net Change in Unrealized Appreciation (Depreciation)		2,506
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(1,842	)
Net Decrease in Net Assets Resulting from Operations	$	(2,729	)

The accompanying notes are an integral part of the financial statements.
25

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Multi-Asset Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(887	)	$	80
Net Realized Gain (Loss)		(4,348	)		2,929
Net Change in Unrealized Appreciation (Depreciation)		2,506			2,666
Net Increase (Decrease) in Net Assets Resulting from Operations		(2,729	)		5,675
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(8,445	)		—
Net Realized Gain		(180	)		(2,922	)
*Class A:**
Net Investment Income		(857	)		—
Net Realized Gain		(21	)		(486	)
Class L:
Net Investment Income		(498	)		—
Net Realized Gain		(16	)		(284	)
Total Distributions		(10,017	)		(3,692	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		497,148			87,746
Distributions Reinvested		8,613			2,198
Redeemed		(107,022	)		(5,089	)
*Class A:**
Subscribed		57,577			10,442
Distributions Reinvested		773			413
Conversion from Class H		—			3,779
Redeemed		(16,062	)		(1,164	)
*Class H:**
Subscribed		—			3,539	**
Conversion to Class A		—			(3,779	)**
Redeemed		—			(521	)**
Class L:
Subscribed		39,846			9,771
Distributions Reinvested		515			279
Redeemed		(7,612	)		(795	)
Net Increase in Net Assets Resulting from Capital Share Transactions		473,776			106,819
Total Increase in Net Assets		461,030			108,802
Net Assets:
Beginning of Period		130,413			21,611
End of Period (Including Accumulated Undistributed Net Investment Income of $2,825 and $604)	$	591,443		$	130,413

The accompanying notes are an integral part of the financial statements.
26

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Multi-Asset Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		42,063			7,456
Shares Issued on Distributions Reinvested		744			190
Shares Redeemed		(9,127	)		(433	)
Net Increase in Class I Shares Outstanding		33,680			7,213
*Class A:**
Shares Subscribed		4,919			883
Shares Issued on Distributions Reinvested		67			36
Conversion from Class H		—			326
Shares Redeemed		(1,378	)		(99	)
Net Increase in Class A Shares Outstanding		3,608			1,146
*Class H:**
Shares Subscribed		—			306	**
Conversion to Class A		—			(326	)**
Shares Redeemed		—			(46	)**
Net Decrease in Class H Shares Outstanding		—			(66	)
Class L:
Shares Subscribed		3,417			836
Shares Issued on Distributions Reinvested		45			24
Shares Redeemed		(665	)		(68	)
Net Increase in Class L Shares Outstanding		2,797			792

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
27

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Multi-Asset Portfolio

	Class I
	Year Ended December 31,						Period from June 22, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	11.68		$	10.30		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.02	)		0.03			(0.02	)
Net Realized and Unrealized Gain		0.11			1.84			0.47
Total from Investment Operations		0.09			1.87			0.45
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		—			—
Net Realized Gain		(0.00	)‡		(0.49	)		(0.15	)
Total Distributions		(0.22	)		(0.49	)		(0.15	)
Net Asset Value, End of Period	$	11.55		$	11.68		$	10.30
Total Return++		0.77	%		18.24	%		4.53	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	495,419		$	107,463		$	20,496
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.01	%+		1.03	%+		1.01	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.14	)%+		0.25	%+		(0.30	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.09	%		0.07	%		0.09	%*
Portfolio Turnover Rate		264	%		223	%		167	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.21	%		1.97	%		2.41	%*
Net Investment Loss to Average Net Assets		(0.34	)%		(0.69	)%		(1.70	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
28

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Multi-Asset Portfolio

	Class A@
	Year Ended December 31,						Period from June 22, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	11.63		$	10.29		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.05	)		0.01			(0.03	)
Net Realized and Unrealized Gain		0.11			1.82			0.47
Total from Investment Operations		0.06			1.83			0.44
Distributions from and/or in Excess of:
Net Investment Income		(0.19	)		—			—
Net Realized Gain		(0.00	)‡		(0.49	)		(0.15	)
Total Distributions		(0.19	)		(0.49	)		(0.15	)
Net Asset Value, End of Period	$	11.50		$	11.63		$	10.29
Total Return++		0.55	%		17.86	%		4.43	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	54,771		$	13,437		$	103
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.30	%+		1.30	%+^^		1.26	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		(0.43	)%+		0.07	%+		(0.55	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.09	%		0.07	%		0.09	%*
Portfolio Turnover Rate		264	%		223	%		167	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.46	%		2.24	%		2.66	%*
Net Investment Loss to Average Net Assets		(0.59	)%		(0.87	)%		(1.95	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.45% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.35% for Class A shares.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
29

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Multi-Asset Portfolio

	Class L
	Year Ended December 31,						Period from June 22, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012
Net Asset Value, Beginning of Period	$	11.53		$	10.26		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.10	)		(0.05	)		(0.06	)
Net Realized and Unrealized Gain		0.10			1.81			0.47
Total from Investment Operations		0.00	‡		1.76			0.41
Distributions from and/or in Excess of:
Net Investment Income		(0.14	)		—			—
Net Realized Gain		(0.00	)‡		(0.49	)		(0.15	)
Total Distributions		(0.14	)		(0.49	)		(0.15	)
Net Asset Value, End of Period	$	11.39		$	11.53		$	10.26
Total Return++		0.02	%		17.23	%		4.13	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	41,253		$	9,513		$	337
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.77	%+		1.79	%+^^		1.76	%+*
Ratio of Net Investment Loss to Average Net Assets ⁽¹⁾		(0.90	)%+		(0.46	)%+		(1.05	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.09	%		0.07	%		0.09	%*
Portfolio Turnover Rate		264	%		223	%		167	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.93	%		2.73	%		3.16	%*
Net Investment Loss to Average Net Assets		(1.06	)%		(1.40	)%		(2.45	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.95% for Class L shares. Prior to September 16, 2013, the maximum ratio was 1.85% for Class L shares.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
30

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Multi-Asset Portfolio. The Portfolio seeks total return. The Portfolio's ("Adviser"), Morgan Stanley Investment Management Inc., seeks to achieve this objective with an emphasis on positive absolute return and controlling downside portfolio risk. To implement this approach, the Adviser will take long and short positions in a range of securities, other instruments and asset classes to express its investment themes. The Adviser may implement these positions either directly by purchasing securities or (specifically in the case of short positions) through the use of derivatives. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (4) futures are valued at the latest price published by the commodities exchange on which they trade; (5) swaps are marked-to-market daily based upon quotations from market makers; (6) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (7) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (8) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (9) short-term taxable debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such price does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser. Other taxable short-term debt securities with maturities of more than 60 days will be valued on a mark-to-market basis until such time as they reach a maturity of 60 days, whereupon they will be valued at amortized cost using their value on the 61st day unless the Adviser determines such price does not reflect the securities' fair value, in which case these securities will be valued at their fair market value as determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	495	$	240	$	—	$	735
Air Freight & Logistics		272		222		—		494
Airlines		113		33		—		146
Auto Components		73		120		—		193
Automobiles		176		881		—		1,057
Banks		1,303		2,759		—		4,062

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Beverages	$	2,023	$	2,050	$	—	$	4,073
Biotechnology		3,908		21		—		3,929
Building Products		—		64		—		64
Capital Markets		292		277		—		569
Chemicals		579		920		—		1,499
Commercial Services & Supplies		117		61		—		178
Communications Equipment		340		—		—		340
Construction & Engineering		1		233		—		234
Construction Materials		—		8		—		8
Consumer Finance		221		20		—		241
Containers & Packaging		—		26		—		26
Diversified Consumer Services		411		—		—		411
Diversified Financial Services		315		7		—		322
Diversified Telecommunication Services		354		1,005		—		1,359
Electric Utilities		2,148		473		—		2,621
Electrical Equipment		130		283		—		413
Electronic Equipment, Instruments & Components		—		193		—		193
Energy Equipment & Services		292		2		—		294
Food & Staples Retailing		2,521		860		—		3,381
Food Products		1,527		2,854		—		4,381
Gas Utilities		37		17		—		54
Health Care Equipment & Supplies		2,928		69		—		2,997
Health Care Providers & Services		3,187		6		—		3,193
Health Care Technology		121		—		—		121
Hotels, Restaurants & Leisure		1,540		96		—		1,636
Household Durables		—		70		—		70
Household Products		2,041		479		—		2,520
Independent Power Producers & Energy Traders		104		—		—		104
Industrial Conglomerates		617		737		—		1,354
Information Technology Services		765		38		—		803
Insurance		587		1,055		—		1,642
Internet & Catalog Retail		303		—		—		303
Internet Software & Services		654		2		—		656
Leisure Products		—		16		—		16
Life Sciences Tools & Services		478		—		—		478
Machinery		443		274		—		717
Marine		—		9		—		9
Media		844		156		—		1,000
Metals & Mining		149		308		—		457
Multi-Utilities		1,711		570		—		2,281
Multi-line Retail		6,162		77		—		6,239
Oil, Gas & Consumable Fuels		1,511		1,511		—		3,022

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Personal Products	$	96		$	788		$	—	$	884
Pharmaceuticals		8,287			1,702			—		9,989
Professional Services		—			42			—		42
Real Estate Investment Trusts (REITs)		595			43			—		638
Real Estate Management & Development		—			115			—		115
Road & Rail		191			61			—		252
Semiconductors & Semiconductor Equipment		552			357			—		909
Software		763			424			—		1,187
Specialty Retail		15,267			487			—		15,754
Tech Hardware, Storage & Peripherals		1,070			81			—		1,151
Textiles, Apparel & Luxury Goods		1,301			321			—		1,622
Tobacco		1,513			1,178			—		2,691
Trading Companies & Distributors		102			134			—		236
Transportation Infrastructure		—			28			—		28
Wireless Telecommunication Services		—			346			—		346
Total Common Stocks		71,530			25,209			—		96,739
Rights		—			—	@		—		—	@
Investment Companies		62			2,377			—		2,439
Fixed Income Security — Sovereign		—			1,816			—		1,816
Short-Term Investments
Investment Company		496,892			—			—		496,892
U.S. Treasury Securities		—			10,232			—		10,232
Total Short-Term Investments		496,892			10,232			—		507,124
Foreign Currency Forward Exchange Contracts		—			5,152			—		5,152
Futures Contracts		1,958			—			—		1,958
Total Return Swap Agreements		—			5,446			—		5,446
Interest Rate Swap Agreements		—			826			—		826
Total Assets		570,442			51,058			—		621,500
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(3,350	)		—		(3,350	)
Futures Contracts		(2,538	)		—			—		(2,538	)
Total Return Swap Agreements		—			(1,798	)		—		(1,798	)
Credit Default Swap Agreements		—			(551	)		—		(551	)
Interest Rate Swap Agreements		—			(314	)		—		(314	)
Total Liabilities		(2,538	)		(6,013	)		—		(8,551	)
Total	$	567,904		$	45,045		$	—	$	612,949

@ Value is less than $500

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $9,875,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has open positions in the futures contract.

Swaps: The Portfolio may enter into OTC swap contracts or cleared swap transactions. A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Portfolio's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit risk. In a cleared swap, the Portfolio's ultimate counterparty is a clearinghouse rather than a bank, dealer or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for OTC swaps. These OTC swaps are often subject to credit risk or the risk of default or non-performance by the counterparty. Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Portfolio or if the reference index, security or investments do not perform as expected. During the period swap agreements are open, payments are received from or made to the clearinghouse or counterparty based upon changes in the value of the contract (variation margin). The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

The Portfolio's use of swaps during the period included those based on the credit of an underlying security commonly referred to as "credit default swaps." The Portfolio may be either the buyer or seller in a credit default swap. Where the Portfolio is the buyer of a credit default

swap contract, it would typically be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract only in the event of a default or similar event by the issuer of the debt obligation. If no default occurs, the Portfolio would have paid to the counterparty a periodic stream of payments over the term of the contract and received no benefit from the contract. When the Portfolio is the seller of a credit default swap contract, it typically receives the stream of payments but is obligated to pay an amount equal to the par (or other agreed-upon) value of a referenced debt obligation upon the default or similar event by the issuer of the referenced debt obligation. The use of credit default swaps could result in losses to the Portfolio if the Adviser fails to correctly evaluate the creditworthiness of the issuer of the referenced debt obligation.

The current credit rating of each individual issuer is listed in the table following the Portfolio of Investments and serves as an indicator of the current status of the payment/performance risk of the credit derivative. Alternatively, for credit default swaps on an index of credits, the quoted market prices and current values serve as an indicator of the current status of the payment/performance risk of the credit derivative. Generally, lower credit ratings and increasing market values, in absolute terms, represent a deterioration of the credit and a greater likelihood of an adverse credit event of the issuer.

When the Portfolio has an unrealized loss on a swap agreement, the Portfolio has instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Statement of Assets and Liabilities.

Upfront payments received or paid by the Portfolio will be reflected as an asset or liability, respectively, in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

The following tables set forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of December 31, 2014.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Appreciation on
Foreign Currency
Forward Exchange
Contracts

Currency Risk

5,152

Futures Contracts

Variation Margin on
Futures Contracts

Commodity Risk

(a)

Futures Contracts

Variation Margin on
Futures Contracts

Equity Risk

1,865

(a)

Swap Agreements

Unrealized Appreciation on
Swap Agreements

Equity Risk

5,446

Swap Agreements

Unrealized Appreciation on
Swap Agreements

Interest Rate Risk

826

Total

13,382

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency
Forward Exchange
Contracts

Unrealized Depreciation on
Foreign Currency
Forward Exchange
Contracts

Currency Risk

(3,350

)

Futures Contract

Variation Margin on
Futures Contract

Commodity Risk

(135

)(a)

Futures Contracts

Variation Margin on
Futures Contracts

Equity Risk

(2,403

)(a)

Swap Agreements

Unrealized Depreciation on
Swap Agreements

Credit Risk

(551

)

Swap Agreements

Unrealized Depreciation on
Swap Agreements

Equity Risk

(1,798

)

Swap Agreements

Variation Margin on
Swap Agreements

Interest Rate Risk

(314

)(a)

Total

(8,551

)

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	16,545
Commodity Risk	Futures Contracts		476
Equity Risk	Futures Contracts		(11,419	)
Interest Rate Risk	Futures Contracts		(2,939	)
Credit Risk	Swap Agreements		(1,910	)
Equity Risk	Swap Agreements		(298	)
Interest Rate Risk	Swap Agreements		(467	)
Total		$	(12	)

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	1,764
Commodity Risk	Futures Contracts		(42	)
Equity Risk	Futures Contracts		(2,090	)
Interest Rate Risk	Futures Contracts		128
Credit Risk	Swap Agreements		(551	)
Equity Risk	Swap Agreements		4,284
Interest Rate Risk	Swap Agreements		512
Total		$	4,005

At December 31, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	5,152	$	(3,350	)
Swap Agreements		6,272		(2,349	)
Total	$	11,424	$	(5,699	)

(b) Excludes exchange traded derivatives.

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received(d) (000)			Net Amount (not less than $0) (000)
Bank of America NA	$	152	$	(59	)	$	—		$	93
Bank of Montreal		188		(140	)		—			48
Barclays Bank PLC		1,224		(463	)		—			761
Citibank NA		211		(211	)		—			0
Deutsche Bank AG		1,113		(199	)		(914	)		0
Goldman Sachs International		5,345		(669	)		(3,780	)		896
JPMorgan Chase Bank NA		2,660		(1,768	)		—			892
Northern Trust Company		75		—			—			75
State Street Bank and Trust Co.		5		(5	)		—			0
UBS AG		451		(451	)		—			0
Total	$	11,424	$	(3,965	)	$	(4,694	)	$	2,765

(d) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged(e) (000)			Net Amount (not less than $0) (000)
Bank of America NA	$	184	$	(59	)	$	—		$	125
Bank of Montreal		140		(140	)		—			0
Bank of New York Mellon		6		—			—			6
Barclays Bank PLC		620		(463	)		(157	)		0
Citibank NA		910		(211	)		(559	)		140
Commonwealth Bank of Australia		88		—			—			88
Credit Suisse International		7		—			—			7
Deutsche Bank AG		199		(199	)		—			0
Goldman Sachs International		669		(669	)		—			0
JPMorgan Chase Bank NA		1,768		(1,768	)		—			0
Royal Bank of Scotland PLC		401		—			—			401
State Street Bank and Trust Co.		85		(5	)		—			80
UBS AG		622		(451	)		—			171
Total	$	5,699	$	(3,965	)	$	(716	)	$	1,018

(e) In some instances, the actual collateral pledged may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	321,344,000
Futures Contracts:
Average monthly original value	$	311,774,000
Swap Agreements:
Average monthly notional amount	$	759,882,000

6. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

First $750 million				Next $750 million				Over $1.5 billion
	0.85	%			0.80	%			0.75	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.68% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares, 1.45% for Class A shares and 1.95% for Class L shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014, approximately $287,000 of advisory fees were waived and approximately $126,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $342,720,000 and $277,613,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by approximately $358,000 relating to the Portfolio's investment in the Liquidity Funds.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	82,396			$	786,474			$	371,978			$	175			$	496,892

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	9,800	$	217	$	2,465	$	1,227

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, swap income reclass, a nondeductible expense and equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Undistributed Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	12,908			$	(13,538	)		$	630

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	8,076			$	—

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $608,035,000. The aggregate gross unrealized appreciation is approximately $15,387,000 and the aggregate gross unrealized depreciation is approximately $15,304,000, resulting in net unrealized appreciation of approximately $83,000.

At December 31, 2014, the Portfolio had available unused short-term capital losses of approximately $16,140,000 and long-term capital losses of approximately $2,068,000 that do not have an expiration date.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Multi-Asset Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Multi-Asset Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Multi-Asset Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during the taxable year ended December 31, 2014. For corporate shareholders, 3.0% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $217,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIMAANN
1112669 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Frontier Emerging Markets Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					9
Statement of Operations					10
Statements of Changes in Net Assets					11
Financial Highlights					13
Notes to Financial Statements					16
Report of Independent Registered Public Accounting Firm					22
Federal Tax Notice					23
U.S. Privacy Policy					24
Director and Officer Information					27

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Frontier Emerging Markets Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Frontier Emerging Markets Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Frontier Emerging Markets Portfolio Class I	$	1,000.00	$	940.80	$	1,016.43	$	8.51	$	8.84		1.74	%
Frontier Emerging Markets Portfolio Class A		1,000.00		938.90		1,014.52		10.36		10.76		2.12
Frontier Emerging Markets Portfolio Class L		1,000.00		936.60		1,011.49		13.28		13.79		2.72

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Frontier Emerging Markets Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

For the year ended December 31, 2014, the Portfolio had a total return based on net asset value and reinvestment of distributions per share of 2.66%, net of fees, for Class I shares. The Portfolio's Class I shares underperformed against the Portfolio's benchmark, the MSCI Frontier Markets Index (the "Index"), which returned 6.84%.

Factors Affecting Performance

• Frontier markets were up by double-digits for most of the year, but suffered along with the oil price decline in the final months of the year, falling 12.46% in the fourth quarter, as measured by the Index. This brought the Index's full-year return down to a modest 6.84%. The frontier markets did outperform the mainstream emerging markets, which were down 2.19% for the year, as reflected by the MSCI Emerging Markets Index.

• Stock selection detracted from performance, while country allocation was a positive contributor to returns.

• Positive performance in the Portfolio was led by stock selection in and an underweight to Kuwait, followed by stock selection in and an overweight allocation to Pakistan. Stock selection in Qatar and an allocation to Saudi Arabia also added to returns.

• On a sector basis, stock selection in and an overweight allocation to the telecommunications sector, and stock selection in and an underweight allocation to consumer staples led results.

• The main detractors from performance were stock selection in the United Arab Emirates (U.A.E.), followed by stock selection in Vietnam and Nigeria.

• The primary sector-level detractors were stock selection within the industrials sector and stock selection in and an underweight to financials.

Management Strategies

• Despite such well-known challenges such as lower liquidity, the frontier markets offer investors an opportunity to access early equity market development with characteristics that include the potential for lower correlations to traditional asset classes and lower volatility than the larger, mainstream emerging markets. Frontier markets differ widely

from one another, but there are several factors which in aggregate make the asset class compelling in our opinion. These include strong economic growth relative to developed countries, new and effective leadership in many countries, and relatively low credit growth. Our country allocation decisions in the Portfolio are based on distinguishing differences in projected gross domestic product (GDP) growth, reform potential, investment levels, current account situations, inflation and central bank policy. We build the Portfolio by selecting companies based on our assessment of strong earnings visibility, sensible management and solid balance sheets. During our team's travel and analysis, we seek oversold opportunities where we believe valuations do not reflect underlying fundamentals.

• We believe that oil prices are likely to remain low throughout 2015, with an estimated range of $60 to $65. If this does occur, it could translate to a significant fall in the average oil price from 2014 and will have a very material impact on nominal GDP across the Gulf Cooperation Council (GCC), a political and economic alliance of six Middle Eastern countries. Oil as a percentage of GDP varies across the Gulf, so the direct impact on GDP will also vary. Although we do believe non-oil GDP may be positive, growth will be slower as it is negatively impacted by the indirect impact of lower oil prices, i.e., lower petrol liquidity in the economy diminishing asset values (wealth) and discretionary spending. We believe Dubai could be particularly hurt, as it has benefited most from high oil-driven liquidity. Additionally, a stabilizing macro outlook for Egypt and a weaker Egyptian pound will likely attract tourists away from the more expensive, dollar-linked dirham destination of Dubai.

• Despite oil's recent downward move, we remain constructive on Saudi Arabia. Positive factors include favorable demographics, as roughly 50% of the population is under the age of 30, and the monarchy's development programs, such as "Saudization," which is focused on integrating locals into the workforce. We believe higher Saudi employment may benefit the economy, particularly in the consumer discretionary spending and financials sectors. We maintain our positive view of Kuwait, as we think non-oil GDP growth could potentially turn positive, we see more stability in the political environment, and the non-performing loan cycle appears to have passed its peak.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Frontier Emerging Markets Portfolio

• Lower oil prices may benefit several frontier countries, such as Pakistan, Kenya, Egypt and Sri Lanka. These countries are net energy importers, where oil is a meaningful component of inflation and fuel subsidies are still used.

• We have increasingly become negative on Nigeria. During the years of high oil prices, Nigeria consistently ran budget deficits and did not save anything. As a result, its foreign exchange reserves and its sovereign wealth fund are a combined $40 billion, which would cover budget deficits at the $65 oil price for just over a year by our estimates. Its currency has been constantly under pressure and the central bank has had to tighten monetary policy in an effort to maintain the currency. We believe the currency will eventually devalue materially in 2015, leading to higher inflation and asset quality deterioration in the banking system. 2015 is setting up to be a very challenging year for Nigeria; it is one of our largest underweight country positions in the Portfolio.

• Frontier markets do not share some of the same vulnerabilities as the broader emerging markets. Investors continue to react negatively to slowing macro data out of China, but the frontier markets in aggregate have less direct trade interaction with China than emerging markets overall have with China. With the prospect of eventual rising rates in the U.S. weighing on emerging market equities, we believe the overall frontier markets are less vulnerable from an external financing perspective, as they have smaller aggregate current account deficits than emerging markets.

• Although MSCI upgraded the U.A.E. and Qatar to its emerging markets index in June 2014, we will continue to include select companies based in these countries in our frontier markets investment universe. Their index weights in the MSCI Emerging Markets Index remain small and many investors have not yet determined whether they are appropriate in an emerging markets portfolio. The Portfolio's largest country exposures as of the end of the period include Pakistan, Saudi Arabia, Kuwait and Argentina. Conversely, we remain zero weight in Kazakhstan, Oman, Slovenia and Lebanon.

* Minimum Investment for Class I shares

** Commenced Operations on August 25, 2008. Performance shown for the Portfolio's Class I shares reflects the performance of the common shares of the Predecessor Fund (see footnote (4)) for periods prior to September 17, 2012.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Frontier Emerging Markets Portfolio

Performance Compared to the MSCI Frontier Markets Index⁽¹⁾ and the Lipper Emerging Markets Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		2.66	%		10.29	%		—		1.45	%
MSCI Frontier Markets Index		6.84			8.05			—		–2.67
Lipper Emerging Markets Funds Index		–2.66			2.51			—		2.28
Portfolio — Class A Shares w/o sales charges⁽⁵⁾		2.39			—			—		16.92
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–2.99			—			—		14.21
MSCI Frontier Markets Index		6.84			—			—		16.22
Lipper Emerging Markets Funds Index		–2.66			—			—		0.35
Portfolio — Class L Shares w/o sales charges⁽⁵⁾		1.77			—			—		16.26
MSCI Frontier Markets Index		6.84			—			—		16.22
Lipper Emerging Markets Funds Index		–2.66			—			—		0.35

⁽¹⁾ The MSCI Frontier Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of frontier markets. The MSCI Frontier Markets Index currently consists of 24 frontier market country indices. The performance of the Index is calculated in U.S. dollars and assumes reinvestment of net dividends. "Net dividends" reflects a reduction in dividends after taking into account withholding of taxes by certain foreign countries represented in the Index. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Emerging Market Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Emerging Market Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Portfolio is in the Lipper Emerging Market Funds classification.

⁽⁴⁾ On September 17, 2012, all assets of Morgan Stanley Frontier Emerging Markets Fund, Inc. (the "Predecessor Fund") were reorganized into Class I shares of Morgan Stanley Institutional Fund, Inc. Frontier Emerging Markets Portfolio ("the Portfolio"). Performance shown for Class I shares reflects the performance of the shares of the Predecessor Fund for periods prior to September 17, 2012.

The Predecessor Fund may have performed differently if it were an open-end fund since closed-end funds are generally not subject to the cash flow fluctuations of an open-end fund. In addition, Class I shares' returns of the Portfolio will differ from the Predecessor Fund as they have different expenses. The Predecessor Fund commenced operations on August 25, 2008.

⁽⁵⁾ Commenced operations on September 14, 2012.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Frontier Emerging Markets Portfolio

	Shares		Value (000)
Common Stocks (81.1%)
Argentina (8.7%)
Banco Macro SA ADR		357,350	$	15,627
BBVA Banco Frances SA ADR		655,856		9,044
Telecom Argentina SA ADR		581,354		11,249
YPF SA ADR		712,235		18,853
				54,773
Bangladesh (3.9%)
GrameenPhone Ltd.		3,895,672		18,156
Olympic Industries Ltd.		2,239,783		6,533
				24,689
Colombia (0.5%)
Cemex Latam Holdings SA (a)		503,584		3,373
Egypt (4.3%)
Arabian Cement Co.		4,620,414		10,921
Commercial International Bank Egypt SAE		2,334,861		16,034
				26,955
Kenya (7.3%)
East African Breweries Ltd.		3,537,363		12,101
Kenya Commercial Bank Ltd.		26,080,509		16,276
Safaricom Ltd.		114,978,019		17,882
				46,259
Kuwait (11.9%)
Burgan Bank SAK		10,771,684		17,671
Kuwait Projects Co. Holding KSC		2,972,768		7,057
National Bank of Kuwait		16,344,374		50,789
				75,517
Morocco (2.1%)
Attijariwafa Bank		352,187		13,318
Nigeria (7.8%)
FBN Holdings PLC		48,927,387		2,353
Guaranty Trust Bank PLC		134,320,749		18,482
Nigerian Breweries PLC		25,104,733		22,676
Zenith Bank PLC		60,056,453		6,042
				49,553
Pakistan (12.3%)
Lucky Cement Ltd.		6,000,455		29,853
MCB Bank Ltd.		5,244,271		16,000
Oil & Gas Development Co., Ltd.		5,596,437		11,467
United Bank Ltd.		11,739,078		20,429
				77,749
Qatar (4.3%)
Ooredoo QSC		421,894		14,176
Qatar Islamic Bank		478,621		13,156
				27,332
Romania (5.2%)
Banca Transilvania (a)		31,687,391		16,285
BRD-Groupe Societe Generale (a)		3,068,185		7,246
Societatea Nationala de Gaze Naturale ROMGAZ SA		689,307		6,579

	Shares		Value (000)
Societatea Nationala de Gaze Naturale ROMGAZ SA GDR (b)		302,095	$	2,766
				32,876
Sri Lanka (4.9%)
Commercial Bank of Ceylon PLC		13,091,269		17,031
John Keells Holdings PLC		7,233,262		13,774
				30,805
United Arab Emirates (2.8%)
First Gulf Bank PJSC		3,807,060		17,403
United Kingdom (1.8%)
Genel Energy PLC (a)		1,080,887		11,570
Vietnam (3.3%)
Viet Nam Dairy Products JSC		1,877,080		8,324
Vingroup JSC		5,700,742		12,655
				20,979
Total Common Stocks (Cost $495,723)				513,151
Participation Notes (13.1%)
Saudi Arabia (12.8%)
Al Hammadi Development and Investment Co., Equity Linked Notes, expires 12/20/18 (a)		258,008		5,793
Al Hammadi Development and Investment Co. Series 000A, Equity Linked Notes, expires 8/21/17 (a)		454,871		10,212
Alinma Bank, Equity Linked Notes, expires 9/27/16 (a)		832,545		4,504
Almina Bank Series 0001, Equity Linked Notes, expires 5/9/16 (a)		2,024,473		10,952
Jarir Marketing Co. Series 0005, Equity Linked Notes, expires 12/12/16 (a)(b)		281,615		13,884
Saudi Airlines Catering Co., Equity Linked Notes, expires 5/23/17 (a)		362,907		17,964
Saudi Hollandi Bank Series 0001, Equity Linked Notes, expires 1/23/17 (a)		64,317		768
Saudi Hollandi Bank Series 0002, Equity Linked Notes, expires 3/7/16 (a)		1,417,464		16,923
				81,000
Vietnam (0.3%)
Viet Nam Dairy Products JSC, Equity Linked Notes, expires 10/23/17 (a)		111,108		493
Viet Nam Dairy Products JSC, Equity Linked Notes, expires 7/22/19 (a)		169,596		752
				1,245
Total Participation Notes (Cost $75,857)				82,245
Short-Term Investment (8.1%)
Investment Company (8.1%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note G) (Cost $51,451)		51,450,849		51,451
Total Investments (102.3%) (Cost $623,031) (c)				646,847
Liabilities in Excess of Other Assets (-2.3%)				(14,470	)
Net Assets (100.0%)			$	632,377

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments (cont'd)

Frontier Emerging Markets Portfolio

(a) Non-income producing security.

(b) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(c) The approximate fair value and percentage of net assets, $409,318,000 and 64.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

PJSC Public Joint Stock Company.

Portfolio Composition

Classification	Percentage of Total Investments
Banks		47.4	%
Other*		18.9
Short-Term Investment		8.0
Oil, Gas & Consumable Fuels		7.9
Construction Materials		6.8
Wireless Telecommunication Services		5.6
Beverages		5.4
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Frontier Emerging Markets Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $571,580)	$	595,396
Investment in Security of Affiliated Issuer, at Value (Cost $51,451)		51,451
Total Investments in Securities, at Value (Cost $623,031)		646,847
Foreign Currency, at Value (Cost $8,659)		8,642
Receivable for Portfolio Shares Sold		2,576
Receivable for Investments Sold		1,031
Dividends Receivable		245
Receivable from Affiliate		5
Tax Reclaim Receivable		3
Other Assets		61
Total Assets		659,410
Liabilities:
Payable for Investments Purchased		20,432
Payable for Portfolio Shares Redeemed		2,432
Payable for Advisory Fees		1,978
Deferred Capital Gain Country Tax		1,726
Payable for Custodian Fees		262
Payable for Sub Transfer Agency Fees — Class I		58
Payable for Sub Transfer Agency Fees — Class A		16
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Professional Fees		45
Payable for Administration Fees		42
Payable for Shareholder Services Fees — Class A		16
Payable for Distribution and Shareholder Services Fees — Class L		5
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		4
Other Liabilities		10
Total Liabilities		27,033
Net Assets	$	632,377
Net Assets Consist Of:
Paid-in-Capital	$	654,547
Distributions in Excess of Net Investment Income		(307	)
Accumulated Net Realized Loss		(43,907	)
Unrealized Appreciation (Depreciation) on:
Investments (Net of $1,723 of Deferred Capital Gain Country Tax)		22,093
Foreign Currency Translations		(49	)
Net Assets	$	632,377
CLASS I:
Net Assets	$	547,535
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		28,593,629
Net Asset Value, Offering and Redemption Price Per Share	$	19.15
CLASS A:
Net Assets	$	76,839
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		4,031,571
Net Asset Value, Redemption Price Per Share	$	19.06
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.06
Maximum Offering Price Per Share	$	20.12
CLASS L:
Net Assets	$	8,003
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		422,071
Net Asset Value, Offering and Redemption Price Per Share	$	18.96

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Frontier Emerging Markets Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $880 of Foreign Taxes Withheld)	$	14,767
Dividends from Security of Affiliated Issuer (Note G)		17
Total Investment Income		14,784
Expenses:
Advisory Fees (Note B)		6,328
Custodian Fees (Note F)		1,376
Administration Fees (Note C)		405
Sub Transfer Agency Fees		33
Sub Transfer Agency Fees — Class I		205
Sub Transfer Agency Fees — Class A		77
Sub Transfer Agency Fees — Class L		3
Shareholder Services Fees — Class A (Note D)		152
Distribution and Shareholder Services Fees — Class L (Note D)		46
Professional Fees		172
Registration Fees		72
Shareholder Reporting Fees		43
Transfer Agency Fees — Class I (Note E)		14
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		13
Directors' Fees and Expenses		10
Pricing Fees		7
Other Expenses		9
Expenses Before Non Operating Expenses		8,968
Bank Overdraft Expense		2
Reorganization Expense		(109	)*
Total Expenses		8,861
Rebate from Morgan Stanley Affiliate (Note G)		(35	)
Net Expenses		8,826
Net Investment Income		5,958
Realized Loss:
Investments Sold (Net of $8 of Capital Gain Country Tax)		(6,594	)
Foreign Currency Transactions		(1,033	)
Net Realized Loss		(7,627	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $1,505)		(12,157	)
Foreign Currency Translations		(37	)
Net Change in Unrealized Appreciation (Depreciation)		(12,194	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(19,821	)
Net Decrease in Net Assets Resulting from Operations	$	(13,863	)

* Over accrual of prior year expenses.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Frontier Emerging Markets Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	5,958		$	546
Net Realized Gain (Loss)		(7,627	)		2,663
Net Change in Unrealized Appreciation (Depreciation)		(12,194	)		28,714
Net Increase (Decrease) in Net Assets Resulting from Operations		(13,863	)		31,923
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(4,928	)		(854	)
Paid-in-capital		(215	)		—
*Class A:**
Net Investment Income		(524	)		(60	)
Paid-in-capital		(32	)		—
Class L:
Net Investment Income		(21	)		(1	)
Paid-in-capital		(3	)		—
Total Distributions		(5,723	)		(915	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		436,382			178,020
Distributions Reinvested		3,342			537
Redeemed		(115,877	)		(20,156	)
*Class A:**
Subscribed		89,841			24,432
Distributions Reinvested		549			60
Conversion from Class H		—			780
Redeemed		(33,970	)		(2,709	)
*Class H:**
Subscribed		—			720	**
Conversion to Class A		—			(780	)**
Redeemed		—			(43	)**
Class L:
Subscribed		7,270			5,119
Distributions Reinvested		24			1
Redeemed		(2,050	)		(2,171	)
Net Increase in Net Assets Resulting from Capital Share Transactions		385,511			183,810
Redemption Fees		100			12
Total Increase in Net Assets		366,025			214,830
Net Assets:
Beginning of Period		266,352			51,522
End of Period (Including Distributions in Excess of Net Investment Income of $(307) and $(602))	$	632,377		$	266,352

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Frontier Emerging Markets Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Year Ended December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		21,506			10,282
Shares Issued on Distributions Reinvested		185			29
Shares Redeemed		(5,792	)		(1,228	)
Net Increase in Class I Shares Outstanding		15,899			9,083
*Class A:**
Shares Subscribed		4,403			1,368
Shares Issued on Distributions Reinvested		30			3
Conversion from Class H		—			47
Shares Redeemed		(1,667	)		(153	)
Net Increase in Class A Shares Outstanding		2,766			1,265
*Class H:**
Shares Subscribed		—			43	**
Conversion to Class A		—			(47	)**
Shares Redeemed		—			(2	)**
Net Decrease in Class H Shares Outstanding		—			(6	)
Class L:
Shares Subscribed		355			296
Shares Issued on Distributions Reinvested		1			—	@
Shares Redeemed		(106	)		(125	)
Net Increase in Class L Shares Outstanding		250			171

@ Amount is less than 500 shares.

* Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

** For the period January 1, 2013 through September 6, 2013.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Frontier Emerging Markets Portfolio

	Class I@
	Year Ended December 31,						Period from November 1, 2012 to December 31,			Year Ended October 31,
Selected Per Share Data and Ratios	2014			2013			2012			2012			2011			2010
Net Asset Value, Beginning of Period	$	18.86		$	14.24		$	14.00		$	12.75		$	15.26		$	13.19
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.25			0.09			(0.03	)		0.19			0.34			0.13
Net Realized and Unrealized Gain (Loss)		0.23			4.60			0.56			1.26			(2.65	)		2.06
Total from Investment Operations		0.48			4.69			0.53			1.45			(2.31	)		2.19
Distributions from and/or in Excess of:
Net Investment Income		(0.18	)		(0.07	)		(0.30	)		(0.22	)		(0.20	)		(0.21	)
Paid-in-Capital		(0.01	)		—			—			—			—			—
Total Distributions		(0.19	)		(0.07	)		(0.30	)		(0.22	)		(0.20	)		(0.21	)
Anti-Dilutive Effect of Share Repurchase Program		—			—			—			—			—			0.09
Redemption Fees		0.00	‡		0.00	‡		0.01			0.02			—			—
Net Asset Value, End of Period	$	19.15		$	18.86		$	14.24		$	14.00		$	12.75		$	15.26
Total Return++		2.66	%		32.95	%		3.94	%#		12.03	%		(15.35	)%		17.95	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	547,535		$	239,378		$	51,415		$	58,729		$	84,962		$	101,662
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.69	%+		1.77	%+		1.85	%+*		2.38	%+		2.03	%+		2.13	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.71	%+		N/A			N/A			2.38	%+		N/A			N/A
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.23	%+		0.54	%+		(1.23	)%+*		1.47	%+		2.32	%+		1.00	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%*§		0.01	%		0.00	%§		0.00	%§
Portfolio Turnover Rate		52	%		34	%		13	%#		59	%		60	%		42	%
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.72	%		1.89	%		3.31	%*		2.47	%		N/A			N/A
Net Investment Income (Loss) to Average Net Assets		1.20	%		0.42	%		(2.69	)%*		1.38	%		N/A			N/A

@ On September 17, 2012, all assets of Morgan Stanley Frontier Emerging Markets Fund, Inc. (the "Predecessor Fund") were reorganized into Class I shares of Morgan Stanley Institutional Fund, Inc. Frontier Emerging Markets Portfolio ("the Portfolio"). Per share data and ratios shown for Class I shares reflects the historical per share data and performance of the Predecessor Fund for periods prior to September 17, 2012.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Frontier Emerging Markets Portfolio

	Class A@
	Year Ended December 31,						Period from November 1, 2012 to			Period from September 14, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012			October 31, 2012
Net Asset Value, Beginning of Period	$	18.78		$	14.20		$	13.97		$	13.76
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.18			(0.15	)		(0.03	)		(0.02	)
Net Realized and Unrealized Gain		0.24			4.79			0.56			0.23
Total from Investment Operations		0.42			4.64			0.53			0.21
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		(0.06	)		(0.30	)		—
Paid-in-Capital		(0.01	)		—			—			—
Total Distributions		(0.14	)		(0.06	)		(0.30	)		—
Redemption Fees		0.00	‡		0.00	‡		—			—
Net Asset Value, End of Period	$	19.06		$	18.78		$	14.20		$	13.97
Total Return++		2.39	%		32.53	%		3.77	%#		1.67	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	76,839		$	23,762		$	10		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.02	%+		1.95	%+^^		2.10	%+*		2.10	%*+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		2.04	%+		N/A			N/A			2.09	%*+
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.90	%+		(0.81	)%+		(1.48	)%+*		(0.88	)%*+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.01	%		0.00	%*§		0.01	%*
Portfolio Turnover Rate		52	%		34	%		13	%#		59	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.05	%		N/A			3.56	%*		2.92	%*
Net Investment Income (Loss) to Average Net Assets		0.87	%		N/A			(2.94	)%*		(1.70	)%*

@ Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.20% for Class A shares. Prior to September 16, 2013, the maximum ratio was 2.10% for Class A shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Frontier Emerging Markets Portfolio

	Class L
	Year Ended December 31,						Period from November 1, 2012 to			Period from September 14, 2012^ to
Selected Per Share Data and Ratios	2014			2013			December 31, 2012			October 31, 2012
Net Asset Value, Beginning of Period	$	18.71		$	14.19		$	13.96		$	13.76
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.06			(0.16	)		(0.05	)		(0.02	)
Net Realized and Unrealized Gain		0.25			4.69			0.57			0.22
Total from Investment Operations		0.31			4.53			0.52			0.20
Distributions from and/or in Excess of:
Net Investment Income		(0.05	)		(0.01	)		(0.29	)		—
Paid-in-Capital		(0.01	)		—			—			—
Total Distributions		(0.06	)		(0.01	)		(0.29	)		—
Redemption Fees		0.00	‡		0.00	‡		—			—
Net Asset Value, End of Period	$	18.96		$	18.71		$	14.19		$	13.96
Total Return++		1.77	%		31.81	%		3.71	%#		1.60	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,003		$	3,212		$	10		$	10
Ratio of Expenses to Average Net Assets ⁽¹⁾		2.65	%+		2.53	%+^^		2.60	%+*		2.60	%*+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		2.67	%+		N/A			N/A			2.59	%*+
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.27	%+		(0.92	)%⁺		(1.98	)%+*		(1.37	)%*+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%		0.00	%§		0.00	%*§		0.01	%*
Portfolio Turnover Rate		52	%		34	%		13	%#		59	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.68	%		N/A			4.08	%*		3.49	%*
Net Investment Income (Loss) to Average Net Assets		0.24	%		N/A			(3.46	)%*		(2.26	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective September 16, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.70% for Class L shares. Prior to September 16, 2013, the maximum ratio was 2.60% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Frontier Emerging Markets Portfolio. The Portfolio seeks long-term capital appreciation. The Portfolio offers three classes of shares — Class I, Class A and Class L.

Effective September 9, 2013, Class P and Class H shares were renamed Class A shares.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a

security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including the Fund's own assumptions in determining

the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	51,548	$	221,638	$	—	$	273,186
Beverages		22,676		12,101		—		34,777
Construction Materials		—		44,147		—		44,147
Diversified Financial Services		—		7,057		—		7,057
Diversified Telecommunication Services		11,249		14,176		—		25,425
Food Products		—		14,857		—		14,857
Industrial Conglomerates		—		13,774		—		13,774
Oil, Gas & Consumable Fuels		18,853		32,382		—		51,235
Real Estate Management & Development		—		12,655		—		12,655
Wireless Telecommunication Services		—		36,038		—		36,038
Total Common Stocks		104,326		408,825		—		513,151
Participation Notes		—		82,245		—		82,245
Short-Term Investment
Investment Company		51,451		—		—		51,451
Total Assets	$	155,777	$	491,070	$	—	$	646,847

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

value of approximately $232,905,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

(losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

A significant portion of the Portfolio's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than U.S. securities. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

5. Redemption Fees: The Portfolio will assess a 2% redemption fee, on Class I shares, Class A shares and Class L shares, which is paid directly to the Portfolio, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Portfolio and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the average daily net assets of the Portfolio.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

and paid monthly, at an annual rate of 0.25% of the Portfolio's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $605,635,000 and $245,061,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by

approximately $35,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	16,542			$	366,958			$	332,049			$	17			$	51,451

During the year ended December 31, 2014, the Portfolio incurred approximately $348,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax periods from the tax period ended October 31, 2012 through the tax period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:						2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Paid-in- Capital (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	5,473	$	—	$	250	$	915	$	—

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, basis adjustments on certain equity securities designated as passive foreign investment companies, a nondeductible expense, and foreign taxes paid on capital gains, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Distributions in Excess of Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	(190	)		$	196			$	(6	)

At December 31, 2014, the Portfolio had no distributable earnings on a tax basis.

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $623,456,000. The aggregate gross unrealized appreciation is approximately $50,407,000 and the aggregate gross unrealized depreciation is approxi-

mately $27,016,000, resulting in net unrealized appreciation of approximately $23,391,000.

At December 31, 2014, the Portfolio had available for Federal income tax purposes unused capital losses which will expire on the indicated dates:

Amount (000)		Expiration
$	20,010	December 31, 2017
	4,191	December 31, 2018

Post-October Currency and Specified Ordinary Losses (000)				Post-October Capital Losses (000)
$	302			$	19,282

I. Other (unaudited): At December 31, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 61% and 57%, for Class I and Class A shares, respectively.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Frontier Emerging Markets Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Frontier Emerging Markets Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Frontier Emerging Markets Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

The Portfolio intends to pass through foreign tax credits of approximately $889,000 and has derived net income from sources within foreign countries amounting to approximately $15,676,000.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. —
Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(This Page has been left blank intentionally.)

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIFEMANN
1112668 Exp. 02.29.16

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Quality Portfolio

Annual Report

December 31, 2014

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Table of Contents

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					8
Statement of Operations					10
Statements of Changes in Net Assets					11
Financial Highlights					13
Notes to Financial Statements					17
Report of Independent Registered Public Accounting Firm					23
Federal Tax Notice					24
U.S. Privacy Policy					25
Director and Officer Information					28

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Annual report, in which you will learn how your investment in Global Quality Portfolio (the "Portfolio") performed during the latest twelve-month period.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

January 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Expense Example (unaudited)

Global Quality Portfolio

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2014 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/14		Actual Ending Account Value 12/31/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Quality Portfolio Class I	$	1,000.00	$	970.60	$	1,019.86	$	5.27	$	5.40		1.06	%
Global Quality Portfolio Class A		1,000.00		970.00		1,018.35		6.75		6.92		1.36
Global Quality Portfolio Class L		1,000.00		966.70		1,015.78		9.27		9.50		1.87
Global Quality Portfolio Class IS		1,000.00		970.70		1,019.91		5.22		5.35		1.05

** Annualized.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited)

Global Quality Portfolio

The Portfolio seeks long-term capital appreciation.

Performance

Factors Affecting Performance

• 2014 was something of a rollercoaster year. As in 2013, markets continued to be broadly hopeful of continuing low interest rates, the expectation of economic growth and well-behaved low inflation, but there was much to distract investors. Questions over ending quantitative easing (QE) in the U.S., growth in China, politics in the Ukraine, Ebola, growth in Europe and more recently the decline in oil prices, all added to volatility.

• World equities' performance in 2014 was dominated by the performance of the U.S. market and the strengthening of the U.S. dollar. For non-U.S. equities, the re-rating (the market changing its view of a company, causing a stock's price to move) story of the previous two years faded and earnings fell. However, in the U.S., the re-rating story continued, probably largely driven by continuing earnings growth — albeit considerably aided by share buybacks. The key question for the U.S. market is whether such a sustained re-rating can continue if strong earnings growth does not come through, especially as the U.S. market comes to terms with the impact of recent dollar strength on earnings growth and/or questions the underlying strength of the U.S. recovery. For non-U.S. equities, the question is whether dollar earnings continue to fall, given a mixture of further dollar strength and the underlying difficulties of growing earnings in weak economies, particularly Europe and Japan.

• The Portfolio's underperformance for the year occurred entirely in the fourth quarter. Performance was hurt by weak stock selection in health care, primarily due to reduced growth forecasts for one of the Portfolio's U.S. diabetes franchises. Some profit taking in the consumer staples sector in the broad market during the fourth quarter and weakness in one of the Portfolio's spirits companies earlier in the

year on concerns about Chinese demand also detracted. In the technology sector, weak stock selection was primarily driven by not owning hardware names, which performed well during the period, as well as owning software and services stocks, which declined.

• The Portfolio's zero weighting in energy and underweight allocation to materials, together with its overweight to the strongly performing defensive sectors of consumer staples and health care all worked well for both the quarter and year. Stock selection in consumer discretionary and financials was also strong for both periods, helping to offset some of the losses.

Management Strategies

• Finding stocks with strong potential absolute returns in these markets is difficult. Attractive opportunities are few and far between. This time last year, consumer staples looked good, especially after their de-rating in the second half of 2013. Tobacco in particular had endured its own private bear market. However, consumer staples have now re-rated and tobacco has so far emerged from the worries of e-cigarettes and plain packaging pretty much intact. Some of our higher-quality consumer staples companies are now testing or exceeding 20x forward price-to-earnings ratios. In other higher-quality sectors such as health care, the re-rating opportunity we spotted has largely played out.

• Well aware of both consumer staples and health care's re-rating, we think valuations are still reasonable considering their generally continuing compounding characteristics: long-term pricing power, high return on capital employed (ROCE) and stable margins. We are also well aware of the scope for further emerging market currency depreciation against the U.S. dollar. We are still prepared to look beyond this, however, because we believe the long-term structural growth scenario for consumer staples companies with high ROCE in the emerging markets looks intact. We are also concerned about the potential for further yen and euro depreciation against the U.S. dollar, as both regions are seemingly determined to depreciate their currencies. The declining growth outlook for the foreseeable future for Europe and Japan leaves an environment fraught with scope for both further

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Quality Portfolio

earnings disappointments as well as pervasive political risk. Getting earnings growth in U.S. dollars outside the U.S. is likely to be as tough in 2015 as it was in 2014, and we continue to prefer the earnings resilience of the quality sectors at still acceptable valuations compared to the broader alternative.

• In such an environment, the biggest challenge is not to shoot the lights out but just to keep the lights burning. In our view, the best way of doing this is to stick to reasonably priced quality companies which have the potential to continue compounding their earnings over the long term.

* Minimum Investment for Class I shares

** Commenced Operations on August 30, 2013.

In accordance with SEC regulations, Portfolio's performance shown assumes that all recurring fees (including management fees) were deducted and all dividends and distributions were reinvested. The performance of Class A, L and IS shares will vary from the performance of Class I shares based upon their different inception dates and will be impacted by additional fees assessed to those classes (if applicable).

Performance Compared to the MSCI World Index⁽¹⁾ and the Lipper Global Large-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2014 Total Returns⁽³⁾
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Portfolio — Class I Shares w/o sales charges⁽⁴⁾		2.66	%		—		—		11.59	%
MSCI World Index		4.94			—		—		13.89
Lipper Global Large-Cap Growth Funds Index		3.83			—		—		12.80
Portfolio — Class A Shares w/o sales charges⁽⁴⁾		2.34			—		—		11.26
Portfolio — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–3.00			—		—		6.90
MSCI World Index		4.94			—		—		13.89
Lipper Global Large-Cap Growth Funds Index		3.83			—		—		12.80
Portfolio — Class L Shares w/o sales charges⁽⁴⁾		1.74			—		—		10.62
MSCI World Index		4.94			—		—		13.89
Lipper Global Large-Cap Growth Funds Index		3.83			—		—		12.80
Portfolio — Class IS Shares w/o sales charges⁽⁵⁾		2.67			—		—		9.61
MSCI World Index		4.94			—		—		10.75
Lipper Global Large-Cap Growth Funds Index		3.83			—		—		9.45

⁽¹⁾ The MSCI World Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Index currently consists of 23 developed market country indices. The performance of the Index is listed in US dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Investment Overview (unaudited) (cont'd)

Global Quality Portfolio

⁽⁴⁾ Commenced operations on August 30, 2013.

⁽⁵⁾ Commenced offering on September 13, 2013.

⁽⁶⁾ For comparative purposes, since inception returns listed for the Indexes refer to the inception date or initial offering of the respective share class of the Portfolio, not the inception of the Index.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Portfolio of Investments

Global Quality Portfolio

	Shares		Value (000)
Common Stocks (97.6%)
France (7.5%)
Hermes International		68	$	24
LVMH Moet Hennessy Louis Vuitton SA		1,465		232
Pernod Ricard SA		2,793		310
Publicis Groupe SA		4,113		294
Sanofi		8,370		763
				1,623
Germany (4.2%)
Bayer AG (Registered)		3,387		463
SAP SE		6,204		438
				901
Japan (0.8%)
Japan Tobacco, Inc.		6,000		165
Netherlands (0.5%)
Reed Elsevier N.V.		4,823		115
Switzerland (14.7%)
Nestle SA (Registered)		19,572		1,435
Novartis AG (Registered)		11,216		1,031
Roche Holding AG (Genusschein)		2,675		725
				3,191
United Kingdom (27.0%)
Aggreko PLC		3,283		76
British American Tobacco PLC		24,924		1,354
Diageo PLC		29,769		854
Experian PLC		15,339		259
GlaxoSmithKline PLC		15,221		326
Indivior PLC (a)		13,285		31
Prudential PLC		10,217		235
Reckitt Benckiser Group PLC		13,285		1,072
Reed Elsevier PLC		6,804		116
Smiths Group PLC		10,207		173
Unilever PLC		25,864		1,050
Weir Group PLC (The)		10,236		293
				5,839
United States (42.9%)
3M Co.		2,717		446
Accenture PLC, Class A		8,108		724
Danaher Corp.		4,462		382
Google, Inc., Class A (a)		1,624		862
Intuit, Inc.		1,833		169
Johnson & Johnson		8,193		857
Microsoft Corp.		15,414		716
Mondelez International, Inc., Class A		14,589		530
Moody's Corp.		1,230		118
Nielsen N.V.		9,898		443
NIKE, Inc., Class B		4,163		400
Philip Morris International, Inc.		8,020		653
Procter & Gamble Co. (The)		8,182		745
Time Warner, Inc.		9,364		800
Twenty-First Century Fox, Inc., Class B		13,025		481

	Shares		Value (000)
Visa, Inc., Class A		2,302	$	604
Walt Disney Co. (The)		3,718		350
				9,280
Total Common Stocks (Cost $20,436)				21,114
Short-Term Investment (2.4%)
Investment Company (2.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $523)		522,683		523
Total Investments (100.0%) (Cost $20,959) (b)				21,637
Other Assets in Excess of Liabilities (0.0%) (c)				7
Net Assets (100.0%)			$	21,644

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $11,803,000 and 54.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		20.7	%
Pharmaceuticals		19.4
Food Products		13.9
Tobacco		10.0
Media		10.0
Household Products		8.4
Information Technology Services		6.1
Software		6.1
Beverages		5.4
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Quality Portfolio

Statement of Assets and Liabilities	December 31, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $20,436)	$	21,114
Investment in Security of Affiliated Issuer, at Value (Cost $523)		523
Total Investments in Securities, at Value (Cost $20,959)		21,637
Foreign Currency, at Value (Cost $1)		1
Receivable for Portfolio Shares Sold		31
Dividends Receivable		23
Tax Reclaim Receivable		21
Due from Adviser		15
Receivable from Affiliate		—	@
Other Assets		26
Total Assets		21,754
Liabilities:
Payable for Professional Fees		38
Payable for Offering Costs		30
Payable for Portfolio Shares Redeemed		26
Payable for Custodian Fees		5
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		2
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		1
Payable for Administration Fees		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		4
Total Liabilities		110
Net Assets	$	21,644
Net Assets Consist Of:
Paid-in-Capital	$	20,980
Accumulated Undistributed Net Investment Income		25
Distribution in Excess of Net Realized Gain		(36	)
Unrealized Appreciation (Depreciation) on:
Investments		678
Foreign Currency Translations		(3	)
Net Assets	$	21,644

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Quality Portfolio

Statement of Assets and Liabilities (cont'd)	December 31, 2014 (000)
CLASS I:
Net Assets	$	14,579
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		1,285,342
Net Asset Value, Offering and Redemption Price Per Share	$	11.34
CLASS A:
Net Assets	$	4,331
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		382,625
Net Asset Value, Redemption Price Per Share	$	11.32
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.63
Maximum Offering Price Per Share	$	11.95
CLASS L:
Net Assets	$	2,723
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		241,298
Net Asset Value, Offering and Redemption Price Per Share	$	11.29
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (500,000,000 shares authorized) (not in 000's)		973
Net Asset Value, Offering and Redemption Price Per Share	$	11.34

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Quality Portfolio

Statement of Operations	Year Ended December 31, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $27 of Foreign Taxes Withheld)	$	479
Income from Securities Loaned — Net		1
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		480
Expenses:
Advisory Fees (Note B)		150
Professional Fees		97
Offering Costs		81
Custodian Fees (Note F)		30
Registration Fees		28
Shareholder Services Fees — Class A (Note D)		8
Distribution and Shareholder Services Fees — Class L (Note D)		15
Shareholder Reporting Fees		18
Administration Fees (Note C)		15
Transfer Agency Fees (Note E)		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		4
Directors' Fees and Expenses		1
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		—	@
Other Expenses		9
Total Expenses		466
Waiver of Advisory Fees (Note B)		(150	)
Expenses Reimbursed by Adviser (Note B)		(80	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		234
Net Investment Income		246
Realized Gain (Loss):
Investments Sold		164
Foreign Currency Transactions		(11	)
Net Realized Gain		153
Change in Unrealized Appreciation (Depreciation):
Investments		6
Foreign Currency Translations		(3	)
Net Change in Unrealized Appreciation (Depreciation)		3
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		156
Net Increase in Net Assets Resulting from Operations	$	402

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Quality Portfolio

Statements of Changes in Net Assets	Year Ended December 31, 2014 (000)			Period from August 30, 2013^ to December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	246		$	(4	)
Net Realized Gain		153			6
Net Change in Unrealized Appreciation (Depreciation)		3			672
Net Increase in Net Assets Resulting from Operations		402			674
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(160	)		—
Net Realized Gain		(137	)		—
Class A:
Net Investment Income		(37	)		—
Net Realized Gain		(40	)		—
Class L:
Net Investment Income		(13	)		—
Net Realized Gain		(25	)		—
Class IS:
Net Investment Income		(—	@)		—
Net Realized Gain		(—	@)		—
Total Distributions		(412	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		8,825			7,025
Distributions Reinvested		255			—
Redeemed		(1,983	)		(137	)
Class A:
Subscribed		2,990			1,548
Distributions Reinvested		75			—
Redeemed		(300	)		(24	)
Class L:
Subscribed		1,787			929
Distributions Reinvested		36			—
Redeemed		(56	)		—
Class IS:
Subscribed		—			10	*
Net Increase in Net Assets Resulting from Capital Share Transactions		11,629			9,351
Total Increase in Net Assets		11,619			10,025
Net Assets:
Beginning of Period		10,025			—
End of Period (Including Accumulated Undistributed Net Investment Income of $25 and $—@)	$	21,644		$	10,025

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Global Quality Portfolio

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2014 (000)			Period from August 30, 2013^ to December 31, 2013 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		779			671
Shares Issued on Distributions Reinvested		23			—
Shares Redeemed		(176	)		(12	)
Net Increase in Class I Shares Outstanding		626			659
Class A:
Shares Subscribed		259			145
Shares Issued on Distributions Reinvested		7			—
Shares Redeemed		(26	)		(2	)
Net Increase in Class A Shares Outstanding		240			143
Class L:
Shares Subscribed		158			86
Shares Issued on Distributions Reinvested		3			—
Shares Redeemed		(5	)		—
Net Increase in Class L Shares Outstanding		156			86
Class IS:
Shares Subscribed		—			1	*

^ Commencement of Operations.

* For the period September 13, 2013 through December 31, 2013.

@ Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Quality Portfolio

	Class I
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from August 30, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	11.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.17			(0.00	)‡
Net Realized and Unrealized Gain		0.13			1.28
Total from Investment Operations		0.30			1.28
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		—
Net Realized Gain		(0.11	)		—
Total Distributions		(0.24	)		—
Net Asset Value, End of Period	$	11.34		$	11.28
Total Return++		2.66	%		12.80	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14,579		$	7,440
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.11	%+^^		1.19	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.49	%+		(0.12	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		31	%		8	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.34	%		4.86	%*
Net Investment Income (Loss) to Average Net Assets		0.26	%		(3.79	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to October 1, 2014, the maximum ratio was 1.20% for Class I shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Quality Portfolio

	Class A
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from August 30, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	11.27		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.12			(0.02	)
Net Realized and Unrealized Gain		0.14			1.29
Total from Investment Operations		0.26			1.27
Distributions from and/or in Excess of:
Net Investment Income		(0.10	)		—
Net Realized Gain		(0.11	)		—
Total Distributions		(0.21	)		—
Net Asset Value, End of Period	$	11.32		$	11.27
Total Return++		2.34	%		12.70	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,331		$	1,612
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.40	%+^^		1.54	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.03	%+		(0.45	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		31	%		8	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.62	%		5.00	%*
Net Investment Loss to Average Net Assets		(0.19	)%		(3.91	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

^^ Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to October 1, 2014, the maximum ratio was 1.55% for Class A shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Quality Portfolio

	Class L
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from August 30, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	11.25		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.06			(0.03	)
Net Realized and Unrealized Gain		0.14			1.28
Total from Investment Operations		0.20			1.25
Distributions from and/or in Excess of:
Net Investment Income		(0.05	)		—
Net Realized Gain		(0.11	)		—
Total Distributions		(0.16	)		—
Net Asset Value, End of Period	$	11.29		$	11.25
Total Return++		1.74	%		12.50	%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,723		$	962
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.93	%+^^		2.04	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		0.55	%+		(0.80	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.01	%*
Portfolio Turnover Rate		31	%		8	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		3.15	%		6.27	%*
Net Investment Loss to Average Net Assets		(0.67	)%		(5.03	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to October 1, 2014, the maximum ratio was 2.05% for Class L shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Financial Highlights

Global Quality Portfolio

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2014			Period from September 13, 2013^ to December 31, 2013
Net Asset Value, Beginning of Period	$	11.28		$	10.28
Income (Loss) from Investment Operations:
Net Investment Income Gain (Loss)†		0.17			(0.00	)‡
Net Realized and Unrealized Gain		0.13			1.00
Total from Investment Operations		0.30			1.00
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		—
Net Realized Gain		(0.11	)		—
Total Distributions		(0.24	)		—
Net Asset Value, End of Period	$	11.34		$	11.28
Total Return++		2.67	%		9.73	%#
Ratios and Supplemental Data:
Net Assets, End of Period, in (Thousands)	$	11		$	11
Ratio of Expenses to Average Net Assets ⁽¹⁾		1.10	%+^^		1.15	%+*
Ratio of Net Investment Income (Loss) to Average Net Assets ⁽¹⁾		1.51	%+		(0.10	)%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§		0.00	%§*
Portfolio Turnover Rate		31	%		8	%#
⁽¹⁾ Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		19.72	%		9.57	%*
Net Investment Loss to Average Net Assets		(17.11	)%		(8.52	)%*

^ Commencement of Operations.

† Per share amount is based on average shares outstanding.

‡ Amount is less than $0.005 per share.

++ Calculated based on the net asset value as of the last business day of the period.

^^ Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to October 1, 2014, the maximum ratio was 1.15% for Class IS shares.

§ Amount is less than 0.005%.

# Not Annualized.

* Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements

The accompanying financial statements relate to the Global Quality Portfolio. The Portfolio's "Sub-Advisers," Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek long-term capital appreciation by investing primarily in equity securities of high quality companies located throughout the world, including developed and emerging market countries. In seeking to identify high quality companies, the Sub-Advisers look for companies that they believe have the returns profile that can underpin compounding, that is, they are able to consistently compound shareholder wealth at attractive rates of return over the long-term. In the Sub-Advisers' view, such companies are typically businesses built on dominant market positions, underpinned by powerful, hard to replicate intangible assets and that can generate resilient high cross cycle returns on capital. In addition, the Sub-Advisers consider high quality companies to have some or all of the following characteristics: strong managements, resilient revenue streams, pricing power (high gross margins), typically low capital intensity and the opportunity for organic growth. The Portfolio offers four classes of shares — Class I, Class A, Class L and Class IS.

On September 16, 2013, the Portfolio commenced offering Class IS shares.

over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

quotations from securities and financial instrument dealers, and other market sources to determine fair value.

inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Portfolio's investments as of December 31, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	—	$	1,164	$	—	$	1,164
Commercial Services & Supplies		—		76		—		76
Diversified Financial Services		118		—		—		118
Food Products		530		2,485		—		3,015
Household Products		745		1,072		—		1,817
Industrial Conglomerates		828		173		—		1,001
Information Technology Services		1,328		—		—		1,328
Insurance		—		235		—		235
Internet Software & Services		862		—		—		862
Machinery		—		293		—		293
Media		1,631		525		—		2,156

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Pharmaceuticals	$	888	$	3,308	$	—	$	4,196
Professional Services		443		259		—		702
Software		885		438		—		1,323
Textiles, Apparel & Luxury Goods		400		256		—		656
Tobacco		653		1,519		—		2,172
Total Common Stocks		9,311		11,803		—		21,114
Short-Term Investment Investment Company		523		—		—		523
Total Assets	$	9,834	$	11,803	$	—	$	21,637

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of December 31, 2014, securities with a total value of approximately $10,687,000 transferred from Level 1 to Level 2. At December 31, 2014, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4. Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

At December 31, 2014, the Portfolio did not have any outstanding securities on loan.

6. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually.

First $500 million				Next $500 million				Over $1 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.20% for Class I shares, 1.55% for Class A shares, 2.05% for Class L shares and 1.15% for Class IS shares. Effective October 1, 2014, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2014,

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

approximately $150,000 of advisory fees were waived and approximately $82,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $16,764,000 and $5,571,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the year ended December 31, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the year ended December 31, 2014 is as follows:

Value December 31, 2013 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value December 31, 2014 (000)
$	251			$	13,384			$	13,112			$	—	@		$	523

@ Amount is less than $500.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Notes to Financial Statements (cont'd)

FASB ASC 740-10 Income Taxes — Overall sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the two-year period ended December 31, 2014, remains subject to examination by taxing authorities.

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	339	$	73	$	—	$	—

Accumulated Undistributed Net Investment Income (000)				Distributions in Excess of Net Realized Gain (000)				Paid-in-Capital (000)
$	(11	)		$	11			$	—

At December 31, 2014, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	25			$	38

At December 31, 2014, the aggregate cost for Federal income tax purposes is approximately $21,034,000. The aggregate gross unrealized appreciation is approximately $1,280,000 and the aggregate gross unrealized depreciation is approximately $677,000 resulting in net unrealized appreciation of approximately $603,000.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Quality Portfolio

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Global Quality Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) (the "Portfolio") as of December 31, 2014, the related statement of operations for the year then ended, and the statements of changes in net assets and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Global Quality Portfolio (one of the portfolios constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2014, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
February 26, 2015

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Federal Tax Notice (unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Portfolio during its taxable year ended December 31, 2014. For corporate shareholders, 35.1% of the dividends qualified for the dividends received deduction.

The Portfolio designated and paid approximately $73,000 as a long-term capital gain distribution.

In January, the Portfolio provides tax information to shareholders for the preceding calendar year.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited)

AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

WE RESPECT YOUR PRIVACY

1. WHAT PERSONAL INFORMATION DO WE COLLECT FROM YOU?

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

a. Information We Disclose to Affiliated Companies.

b. Information We Disclose to Third Parties.

3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU?

4. HOW CAN YOU LIMIT OUR SHARING CERTAIN PERSONAL INFORMATION ABOUT YOU WITH OUR AFFILIATED COMPANIES FOR ELIGIBILITY DETERMINATION?

5. HOW CAN YOU LIMIT THE USE OF CERTAIN PERSONAL INFORMATION ABOUT YOU BY OUR AFFILIATED COMPANIES FOR MARKETING?

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

U.S. Privacy Policy (unaudited) (cont'd)

6. HOW CAN YOU SEND US AN OPT-OUT INSTRUCTION?

• Calling us at (800) 548-7786
Monday–Friday between 8a.m. and 6p.m. (EST)

• Writing to us at the following address:

Boston Financial Data Services, Inc.
c/o Privacy Coordinator
P.O. Box 219804
Kansas City, Missouri 64121

7. WHAT IF AN AFFILIATED COMPANY BECOMES A NONAFFILIATED THIRD PARTY?

SPECIAL NOTICE TO RESIDENTS OF VERMONT

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited)

Independent Directors:

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman (70)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Michael Bozic (74)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
April
1994

Trustee and member of the Hillsdale College Board of Trustees.

Kathleen A. Dennis (61)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of various nonprofit organizations.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Nancy C. Everett (60)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Jakki L. Haussler (57)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
January
2015

Dr. Manuel H. Johnson (66)
c/o Johnson Smick
International, Inc.
220 I Street, N.E. — Suite 200
Washington, D.C. 20002

Director

Since
July
1991

Director of NVR, Inc. (home construction).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Independent Directors: (cont'd)

Name, Age and Address of
Independent Director

Positions(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns (72)
c/o Kearns & Associates LLC
23823 Malibu Road
S-50-440
Malibu, CA 90265

Director

Since
August
1994

Director of Electro Rent Corporation (equipment leasing). Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein (56)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Michael E. Nugent (78)
522 Fifth Avenue
New York, NY 10036

Chairperson of the Board and Director

Chairperson of the Boards since July 2006 and Director since July 1991

None.

W. Allen Reed (67)
c/o Kramer Levin Naftalis & Frankel LLP
Counsel to the Independent Directors
1177 Avenue of the Americas
New York, NY 10036

Director

Since
August
2006

Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.

Fergus Reid (82)
c/o Joe Pietryka, Inc.
85 Charles Colman Blvd.
Pawling, NY 12564

Director

Since
June
1992

Chairman, Joe Pietryka, Inc.; Chairperson of the Governance Committee and Director or Trustee of various Morgan Stanley Funds (since June 1992).

Through December 31, 2012, Trustee and Director of certain investment companies in the JP Morgan Fund Complex managed by JP Morgan Investment Management Inc. (1987-December 2012).

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Director and Officer Information (unaudited) (cont'd)

Interested Director:

Name, Age and Address of
Interested Director

Positions(s) Held
with Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Interested
Director**

Other Directorships
Held by Interested
Director***

James F. Higgins (67)
One New York Plaza,
New York, NY 10004

Director

Since
June
2000

Director or Trustee of various Morgan Stanley Funds (since June 2000); Senior Advisor of Morgan Stanley (since August 2000).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Age and Address of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon (51)
522 Fifth Avenue
New York, NY 10036

President and Principal Executive Officer

Since
September
2013

Stefanie V. Chang Yu (48)
522 Fifth Avenue
New York, NY 10036

Chief Compliance Officer

Since
December
1997

Joseph C. Benedetti (49)
522 Fifth Avenue
New York, NY 10036

Vice President

Since
January
2014

Francis J. Smith (49)
522 Fifth Avenue
New York, NY 10036

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin (47)
522 Fifth Avenue
New York, NY 10036

Secretary

Since
June
1999

Executive Director of the Adviser and various entities affiliated with the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is chosen and qualifies.

Morgan Stanley Institutional Fund, Inc.

Annual Report — December 31, 2014

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

IFIGQANN
1110123 Exp. 02.29.16

Item 2. Code of Ethics.

(a) The Fund has adopted a code of ethics (the “Code of Ethics”) that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Fund or a third party.

(b) No information need be disclosed pursuant to this paragraph.

(d) Not applicable.

(e) Not applicable.

(f)

(1) The Fund’s Code of Ethics is attached hereto as Exhibit 12 A.

(2) Not applicable.

(3) Not applicable.

Item 3. Audit Committee Financial Expert.

The Fund’s Board of Directors has determined that Joseph J. Kearns, an “independent” Director, is an “audit committee financial expert” serving on its audit committee. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification

Item 4. Principal Accountant Fees and Services.

(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:

2014

	Registrant			Covered Entities(1)
Audit Fees	$	1,053,918		N/A

Non-Audit Fees
Audit-Related Fees	$		(2)	$		(2)
Tax Fees	$	103,120	(3)	$	8,655,656	(4)
All Other Fees	$			$	285,341	(5)
Total Non-Audit Fees	$	103,120		$	8,940,997

Total	$	1,157,038		$	8,940,997

2013

	Registrant			Covered Entities(1)
Audit Fees	$	1,012,742		N/A

Non-Audit Fees
Audit-Related Fees	$		(2)	$		(2)
Tax Fees	$	103,801	(3)	$	7,772,493	(4)
All Other Fees	$			$	101,000	(5)
Total Non-Audit Fees	$	103,801		$	7,873,493

Total	$	1,116,543		$	7,873,493

N/A- Not applicable, as not required by Item 4.

(1) Covered Entities include the Adviser (excluding sub-advisors) and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Registrant.

(2) Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Covered Entities’ and funds advised by the Adviser or its affiliates, specifically data verification and agreed-upon procedures related to asset securitizations and agreed-upon procedures engagements.

(3) Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the preparation and review of the Registrant’s tax returns.

(4) Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the review of Covered Entities’ tax returns.

(5) All other fees represent project management for future business applications and improving business and operational processes.

(e)(1) The audit committee’s pre-approval policies and procedures are as follows:

APPENDIX A

AUDIT COMMITTEE

AUDIT AND NON-AUDIT SERVICES

PRE-APPROVAL POLICY AND PROCEDURES

OF THE

MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS

AS ADOPTED AND AMENDED JULY 23, 2004,(1)

1. Statement of Principles

The Audit Committee of the Board is required to review and, in its sole discretion, pre-approve all Covered Services to be provided by the Independent Auditors to the Fund and Covered Entities in order to assure that services performed by the Independent Auditors do not impair the auditor’s independence from the Fund.

The SEC has issued rules specifying the types of services that an independent auditor may not provide to its audit client, as well as the audit committee’s administration of the engagement of the independent auditor. The SEC’s rules establish two different approaches to pre-approving services, which the SEC considers to be equally valid. Proposed services either: may be pre-approved without consideration of specific case-by-case services by the Audit Committee (“general pre-approval”); or require the specific pre-approval of the Audit Committee or its delegate (“specific pre-approval”). The Audit Committee believes that the combination of these two approaches in this Policy will result in an effective and efficient procedure to pre-approve services performed by the Independent Auditors. As set forth in this Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee (or by any member of the Audit Committee to which pre-approval authority has been delegated) if it is to be provided by the Independent Auditors. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval by the Audit Committee.

The appendices to this Policy describe the Audit, Audit-related, Tax and All Other services that have the general pre-approval of the Audit Committee. The term of any general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee considers and provides a different period and states otherwise. The Audit Committee will annually review and pre-approve the services that may be provided by the Independent Auditors without obtaining specific pre-approval from the Audit Committee. The Audit Committee will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

(1) This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and Procedures (the “Policy”), adopted as of the date above, supersedes and replaces all prior versions that may have been adopted from time to time.

The purpose of this Policy is to set forth the policy and procedures by which the Audit Committee intends to fulfill its responsibilities. It does not delegate the Audit Committee’s responsibilities to pre-approve services performed by the Independent Auditors to management.

The Fund’s Independent Auditors have reviewed this Policy and believes that implementation of the Policy will not adversely affect the Independent Auditors’ independence.

2. Delegation

As provided in the Act and the SEC’s rules, the Audit Committee may delegate either type of pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

3. Audit Services

The annual Audit services engagement terms and fees are subject to the specific pre-approval of the Audit Committee. Audit services include the annual financial statement audit and other procedures required to be performed by the Independent Auditors to be able to form an opinion on the Fund’s financial statements. These other procedures include information systems and procedural reviews and testing performed in order to understand and place reliance on the systems of internal control, and consultations relating to the audit. The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Fund structure or other items.

In addition to the annual Audit services engagement approved by the Audit Committee, the Audit Committee may grant general pre-approval to other Audit services, which are those services that only the Independent Auditors reasonably can provide. Other Audit services may include statutory audits and services associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

The Audit Committee has pre-approved the Audit services in Appendix B.1. All other Audit services not listed in Appendix B.1 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

4. Audit-related Services

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements and, to the extent they are Covered Services, the Covered Entities or that are traditionally performed by the Independent Auditors. Because the Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor and is consistent with the SEC’s rules on auditor independence, the Audit Committee may grant general pre-approval to Audit-related services. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters

not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Forms N-SAR and/or N-CSR.

The Audit Committee has pre-approved the Audit-related services in Appendix B.2. All other Audit-related services not listed in Appendix B.2 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

5. Tax Services

The Audit Committee believes that the Independent Auditors can provide Tax services to the Fund and, to the extent they are Covered Services, the Covered Entities, such as tax compliance, tax planning and tax advice without impairing the auditor’s independence, and the SEC has stated that the Independent Auditors may provide such services.

Pursuant to the preceding paragraph, the Audit Committee has pre-approved the Tax Services in Appendix B.3. All Tax services in Appendix B.3 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

6. All Other Services

The Audit Committee believes, based on the SEC’s rules prohibiting the Independent Auditors from providing specific non-audit services, that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, would not impair the independence of the auditor and are consistent with the SEC’s rules on auditor independence.

The Audit Committee has pre-approved the All Other services in Appendix B.4. Permissible All Other services not listed in Appendix B.4 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

7. Pre-Approval Fee Levels or Budgeted Amounts

Pre-approval fee levels or budgeted amounts for all services to be provided by the Independent Auditors will be established annually by the Audit Committee. Any proposed services exceeding these levels or amounts will require specific pre-approval by the Audit Committee. The Audit Committee is mindful of the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services.

8. Procedures

All requests or applications for services to be provided by the Independent Auditors that do not require specific approval by the Audit Committee will be submitted to the Fund’s Chief Financial Officer and must include a detailed description of the services to be

rendered. The Fund’s Chief Financial Officer will determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the Independent Auditors. Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the Independent Auditors and the Fund’s Chief Financial Officer, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.

The Audit Committee has designated the Fund’s Chief Financial Officer to monitor the performance of all services provided by the Independent Auditors and to determine whether such services are in compliance with this Policy. The Fund’s Chief Financial Officer will report to the Audit Committee on a periodic basis on the results of its monitoring. Both the Fund’s Chief Financial Officer and management will immediately report to the chairman of the Audit Committee any breach of this Policy that comes to the attention of the Fund’s Chief Financial Officer or any member of management.

9. Additional Requirements

The Audit Committee has determined to take additional measures on an annual basis to meet its responsibility to oversee the work of the Independent Auditors and to assure the auditor’s independence from the Fund, such as reviewing a formal written statement from the Independent Auditors delineating all relationships between the Independent Auditors and the Fund, consistent with Independence Standards Board No. 1, and discussing with the Independent Auditors its methods and procedures for ensuring independence.

10. Covered Entities

Covered Entities include the Fund’s investment adviser(s) and any entity controlling, controlled by or under common control with the Fund’s investment adviser(s) that provides ongoing services to the Fund(s). Beginning with non-audit service contracts entered into on or after May 6, 2003, the Fund’s audit committee must pre-approve non-audit services provided not only to the Fund but also to the Covered Entities if the engagements relate directly to the operations and financial reporting of the Fund. This list of Covered Entities would include:

Morgan Stanley Retail Funds

Morgan Stanley Investment Advisors Inc.

Morgan Stanley & Co. Incorporated

Morgan Stanley DW Inc.

Morgan Stanley Investment Management Inc.

Morgan Stanley Investment Management Limited

Morgan Stanley Investment Management Private Limited

Morgan Stanley Asset & Investment Trust Management Co., Limited

Morgan Stanley Investment Management Company

Morgan Stanley Services Company, Inc.

Morgan Stanley Distributors Inc.

Morgan Stanley Trust FSB

Morgan Stanley Institutional Funds

Morgan Stanley Investment Management Inc.

Morgan Stanley Investment Advisors Inc.

Morgan Stanley Investment Management Limited

Morgan Stanley Investment Management Private Limited

Morgan Stanley Asset & Investment Trust Management Co., Limited

Morgan Stanley Investment Management Company

Morgan Stanley & Co. Incorporated

Morgan Stanley Distribution, Inc.

Morgan Stanley AIP GP LP

Morgan Stanley Alternative Investment Partners LP

(e)(2) Beginning with non-audit service contracts entered into on or after May 6, 2003, the audit committee also is required to pre-approve services to Covered Entities to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Registrant. 100% of such services were pre-approved by the audit committee pursuant to the Audit Committee’s pre-approval policies and procedures (attached hereto).

(f) Not applicable.

(g) See table above.

(h) The audit committee of the Board of Directors has considered whether the provision of services other than audit services performed by the auditors to the Registrant and Covered Entities is compatible with maintaining the auditors’ independence in performing audit services.

Item 5. Audit Committee of Listed Registrants.

(a) The Fund has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:

Joseph Kearns, Michael Nugent, Allen Reed and Michael Klein.

(b) Not applicable.

Item 6. Schedule of Investments

(a) Refer to Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Applicable only to reports filed by closed-end funds.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable only to reports filed by closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

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

(b) There were no changes in the registrant’s internal control over financial reporting 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 registrant’s internal control over financial reporting.

Item 12. Exhibits

(a) The Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.

SIGNATURES

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

Morgan Stanley Institutional Fund, Inc.

/s/ John H. Gernon
John H. Gernon
Principal Executive Officer
February 18, 2015

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

/s/ John H. Gernon
John H. Gernon
Principal Executive Officer
February 18, 2015

/s/ Francis Smith
Francis Smith
Principal Financial Officer
February 18, 2015