ADVISORY AGREEMENT
ALLIANCE INSTITUTIONAL RESERVES, INC.
1345 Avenue of the Americas
New York, New York 10105



							July 22, 1992 (as amended
							as of October 19, 2000 and
							February 1, 2001


Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105

Dear Sirs:

We herewith confirm our agreement with you as follows:

1. We are an open-end, diversified management investment company
registered under the Investment Company Act of 1940 (the "Act"). We are
currently authorized to issue separate classes of shares and our
Directors are authorized to reclassify and issue any unissued shares to
any number of additional classes or series (Portfolios) each having its
own investment objective, policies and restrictions, all as more fully
described in the Prospectus and the Statement of Additional Information
constituting parts of the Registration Statement filed on our behalf
under the Securities Act of 1933 and the Act. We are engaged in the
business of investing and reinvesting our assets in securities of the
type and in accordance with the limitations specified in our Articles
of Incorporation, By-Laws, Registration Statement filed with the
Securities and Exchange Commission under the Securities Act of 1933 and
the Act, and any representations made in our Prospectus and Statement
of Additional Information, all in such manner and to such extent as may
from time to time be authorized by our Directors. We enclose copies of
the documents listed above and will from time to time furnish you with
any amendments thereof.

40:   2. (a) We hereby employ you to manage the investment and
reinvestment of the assets in each of our Portfolios as above
specified, and, without limiting the generality of the foregoing, to
provide management and other services specified below.



(b) You will make decisions with respect to all purchases
and sales of securities in each of our Portfolios. To carry out such
decisions, you are hereby authorized, as our agent and
attorney-in-fact, for our account and at our risk and in our name, to
place orders for the investment and reinvestment of our assets. In all
purchases, sales and other transactions in securities in each of our
Portfolios you are authorized to exercise full discretion and act for
us in the same manner and with the same force and effect as we might or
could do with respect to such purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to
the furtherance or conduct of such purchases, sales or other
transactions.

(c) You will report to our Directors at each meeting thereof
all changes in each Portfolio since the prior report, and will also
keep us in touch with important developments affecting any Portfolio
and on your own initiative will furnish us from time to time with such
information as you may believe appropriate for this purpose, whether
concerning the individual companies whose securities are included in
our Portfolios, the industries in which they engage, or the conditions
prevailing in the economy generally. You will also furnish us with such
statistical and analytical information with respect to securities in
each of our Portfolios as you may believe appropriate or as we
reasonably may request. In making such purchases and sales of
securities in each of our Portfolios, you will bear in mind the
policies set from time to time by our Directors as well as the
limitations imposed by our Articles of Incorporation and in our
Registration Statements under the Act and the Securities Act of 1933,
the limitations in the Act and of the Internal Revenue Code in respect
of regulated investment companies and the investment objective,
policies and restrictions for each of our Portfolios.

(d) It is understood that you will from time to time employ
or associate with yourselves such persons as you believe to be
particularly fitted to assist you in the execution of your duties
hereunder, the cost of performance of such duties to be borne and paid
by you. No obligation may be incurred on our behalf in any such
respect. During the continuance of this agreement at our request you
will provide to us persons satisfactory to our Directors to serve as
our officers. You or your affiliates will also provide persons, who may
be our officers, to render such clerical, accounting and other services
to us as we may from time to time request of you. Such personnel may be
employees of you or your affiliates. We will pay to you or your
affiliates the cost of such personnel for rendering such services to us
at such rates as shall from time to time be agreed upon between us,
provided that all time devoted to the investment or reinvestment of
securities in each of our Portfolios shall be for your account. Nothing
contained herein shall be construed to restrict our right to hire our
own employees or to contract for services to be performed by third
parties. Furthermore, you or your affiliates (other than us) shall
furnish us without charge with such management supervision and
assistance and such office facilities as you may believe appropriate or
as we may reasonably request subject to the requirements of any
regulatory authority to which you may be subject. You or your
affiliates (other than us) shall also be responsible for the payment of
any expenses incurred in promoting the sale of our shares (other than
the portion of the promotional expenses to be borne by us in accordance
with an effective plan pursuant to Rule 12b-1 under the Act and the
costs of printing our prospectuses and other reports to stockholders
and fees related to registration with the Securities and Exchange
Commission and with state regulatory authorities).

3. It is further agreed that you shall be responsible for the
portion of the net expenses of each of our Portfolios (except interest,
taxes, brokerage, fees paid in accordance with an effective plan
pursuant to Rule 12b-1 under the Act, expenditures which are
capitalized in accordance with generally accepted accounting principles
and extraordinary expenses, all to the extent permitted by applicable
state law and regulation) incurred by us during each of our fiscal
years or portion thereof that this agreement is in effect between us
which, as to a Portfolio, in any such year exceeds the limits
applicable to such Portfolio under the laws or regulations of any state
in which our shares are qualified for sale (reduced pro rata for any
portion of less than a year). We hereby confirm that, subject to the
foregoing, we shall be responsible and hereby assume the obligation for
payment of all our other expenses, including: (a) payment of the fee
payable to you under paragraph 5 hereof; (b) custody, transfer, and
dividend disbursing expenses; (c) fees of directors who are not your
affiliated persons; (d) legal and auditing expenses; (e) clerical,
accounting and other office costs; (f) the cost of personnel providing
services to us, as provided in subparagraph (d) of paragraph 2 above;
(g) costs of printing our prospectuses and stockholder reports; (h)
cost of maintenance of corporate existence; (i) interest charges,
taxes, brokerage fees and commissions; (j) costs of stationery and
supplies; (k) expenses and fees related to registration and filing with
the Securities and Exchange Commission and with state regulatory
authorities; and (1) such promotional expenses as may be contemplated
by an effective plan pursuant to Rule 12b-1 under the Act provided,
however, that our payment of such promotional expenses shall be in the
amounts, and in accordance with the procedures, set forth in such plan.

4. We shall expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and
we agree as an inducement to your undertaking these services that you
shall not be liable hereunder for any mistake of judgment or in any
event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, you against
any liability to us or to our security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder.

5. In consideration of the foregoing we will pay you a fee at
the annual percentage rate of .20 of 1% of the average daily value of
the net assets of each of our Prime, Government, Tax-Free, Treasury,
California Tax-Free and New York Tax-Free Portfolios, and .45 of 1% of
the average daily value of the net assets of our Trust Portfolio. Such
fee shall be accrued by us daily and shall be payable in arrears on the
last day of each calendar month for services performed hereunder during
such month. Your reimbursement, if any, of our expenses as provided in
paragraph 3 hereof, shall be estimated and paid to us monthly in
arrears, at the same time as our payment to you for such month. Payment
of the advisory fee will be reduced or postponed, if necessary, with
any adjustments made after the end of the year.

6. This agreement shall become effective on the date hereof and
shall remain in effect until December 31, 2001 and thereafter for
successive twelve-month periods (computed from each January 1) with
respect to each Portfolio provided that such continuance is
specifically approved at least annually by our Directors or by majority
vote of the holders of the outstanding voting securities (as defined in
the Act) of such Portfolio, and, in either case, by a majority of our
Directors who are not parties to this agreement or interested persons,
as defined in the Act, of any such party (other than as directors of
the Fund) provided further, however, that if the continuation of this
agreement is not approved as to a Portfolio, you may continue to render
to such Portfolio the services described herein in the manner and to
the extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this agreement, it shall
supersede all previous agreements between us covering the subject
matter hereof. This agreement may be terminated with respect to any
Portfolio at any time, without the payment of any penalty, by vote of a
majority of the outstanding voting securities (as so defined) of such
Portfolio, or by a vote of a majority of our Directors on sixty days'
written notice to you, or by you with respect to any Portfolio on sixty
days' written notice to us.

7.This agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this agreement shall
terminate automatically in the event of any such transfer, assignment,
sale, hypothecation or pledge by you. The terms "transfer",
"assignment" and "sale" as used in this paragraph shall have the
meanings ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the Securities
and Exchange Commission thereunder.

8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your employees, or any of
the Directors of Alliance Capital Management Corporation, general
partner, who may also be a trustee, officer or employee of ours, or
persons otherwise affiliated with us (within the meaning of the Act) to
engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar
or dissimilar nature, or to render services of any kind to any other
trust, corporation, firm, individual or association.

(b) You will notify us of any change in the general partners
of your partnership within a reasonable time after such change.

9. If you cease to act as our investment adviser, or, in any
event, if you so request in writing, we agree to take all necessary
action to change the name of our corporation to a name not including
the word "Alliance". You may from time to time make available without
charge to us for our use such marks or symbols owned by you, including
marks or symbols containing the name "Alliance" or any variation
thereof, as you may consider appropriate. Any such marks or symbols so
made available will remain your property and you will have the right,
upon notice in writing, to require us to cease the use of such mark or
symbol at any time.

If the foregoing is in accordance with your understanding, will
you kindly so indicate by signing and returning to us the enclosed copy
hereof.

Very truly yours,

Alliance Institutional Reserves, Inc.


By___________________________
Ronald M. Whitehill





Accepted as amended as of February 1, 2001

ALLIANCE CAPITAL MANAGEMENT L.P.


By Alliance Capital Management Corporation,
general partner


By_________________________________
  John D. Carifa
  President & Chief Operating Officer