MIRAGE RESORTS, INCORPORATED, Issuer


                                      AND


              FIRST SECURITY BANK, NATIONAL ASSOCIATION, Trustee


                                 $300,000,000

                            SUPPLEMENTAL INDENTURE

                                  DATED AS OF

                                August 1, 1997


                        6.75% NOTES DUE AUGUST 1, 2007
                      7.25% DEBENTURES DUE AUGUST 1, 2017


















                                   Exhibit 4.2
<PAGE>
 
     THIS SUPPLEMENTAL INDENTURE is dated and entered into as of August 1, 1997,
between Mirage Resorts, Incorporated, a Nevada corporation (hereinafter
sometimes referred to as the "Company"), and First Security Bank, National
Association, a corporation organized and existing as a national banking
association under the laws of the United States, as trustee (hereinafter
sometimes referred to as the "Trustee").

                               WITNESSETH THAT:

     WHEREAS, the Company filed on June 28, 1996 a Registration Statement on
Form S-3 (the "Shelf Registration Statement") with the Securities and Exchange
Commission with respect to certain securities of the Company, and the Shelf
Registration Statement was declared effective on July 12, 1996;

     WHEREAS, the form of Indenture attached as Exhibit 4 to the Shelf
Registration Statement (the "Indenture") sets forth certain terms and provisions
of certain debt securities of the Company;

     WHEREAS, for its lawful corporate purposes, the Company desires to create
and authorize the series of 6.75% Notes Due August 1, 2007, in an aggregate
principal amount of $200,000,000 (the "Notes") and the series of 7.25%
Debentures Due August 1, 2017, in an aggregate principal amount of $100,000,000
(the "Debentures") and to provide the terms and conditions upon which the Notes
and Debentures are to be executed, registered, authenticated, issued and
delivered;

     WHEREAS, the Company has duly authorized the execution and delivery of this
Supplemental Indenture;

     WHEREAS, the Notes and the certificate of authentication to be borne by the
Notes are to be substantially in the forms attached hereto as Exhibit A, and the
                                                              ---------         
Debentures and the certificate of authentication to be borne by the Debentures
are to be substantially in the forms attached hereto as Exhibit B; and
                                                        ---------     

     WHEREAS, all acts and things necessary to make the Notes and the
Debentures, when executed by the Company and authenticated and delivered by or
on behalf of the Trustee as in this Supplemental Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid indenture and agreement according to its terms, have been done and
performed;

     NOW, THEREFORE, in order to declare the terms and conditions upon which the
Notes and the Debentures are executed, registered, authenticated, issued and
delivered, and in consideration of the premises, of the purchase and acceptance
of such Notes and such Debentures by the Holders thereof and of the sum of one
dollar to it duly paid by the Trustee at the execution of these presents, the
receipt whereof is hereby acknowledged, the Company covenants and agrees with
the Trustee, for the equal and proportionate benefit of the respective Holders
from time to time of the Notes and Debentures, as follows:

                                       2
<PAGE>
 
                                  ARTICLE ONE

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

1.   Capitalized Terms.

          Capitalized terms used herein and not otherwise defined herein are
used with the respective meanings ascribed to such terms in the Indenture.

2.   Effectiveness.

          This Supplemental Indenture shall become effective, and shall bind the
parties hereto, upon its execution by the parties hereto.

3.   Incorporation of Supplemental Indenture into Indenture.

          This Supplemental Indenture is executed by the Company and the Trustee
pursuant to the provisions of Section 9.01 of the Indenture, and the terms and
conditions hereof shall be deemed to be part of the Indenture for all purposes
upon the effectiveness of this Supplemental Indenture.  The Indenture, as
amended and supplemented by this Supplemental Indenture, is in all respects
hereby adopted, ratified and confirmed.

4.   Effect of Headings.

          The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.

5.   Governing Law.

          The internal laws of the State of Nevada shall govern and be used to
construe this Supplemental Indenture, without regard to the conflicts of laws
provisions thereof.

6.   Counterparts.

          This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

7.   Recitals.

          The recitals contained herein shall be taken as the statements of the
Company and the Trustee assumes no responsibility for their correctness.  The
Trustee makes no representations as to the validity or sufficiency of this
Supplemental Indenture.

                                       3
<PAGE>
 
                                  ARTICLE TWO

                     CREATION AND AUTHORIZATION OF SERIES

1.   Designation of Series of Security.

          There is hereby created and authorized (i) the series of Securities
entitled the "6.75% Notes Due August 1, 2007," which shall be a closed series
limited to $200,000,000 aggregate Principal Amount (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes of this series pursuant to Sections 2.08, 2.09,
2.12 and 3.06 of the Indenture) and (ii) the series of Securities entitled
"7.25% Debentures Due August 1, 2017," which shall be a closed series limited to
$100,000,000 aggregate Principal Amount (except for Debentures authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Debentures of this series pursuant to Sections 2.08, 2.09, 2.12 and 3.06
of the Indenture).  The Notes and Debentures shall be substantially in the forms
set forth in the fifth recital of this Supplemental Indenture.

                                 ARTICLE THREE

                     AMENDMENTS TO PROVISIONS OF INDENTURE

1.   Definitions.

          Section 1.01 of the Indenture is hereby amended by adding the
following definitions in the appropriate alphabetical order:

          "Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.20% with respect to the Notes 
and 0.25% with respect to the Debentures.

          "Attributable Value" in respect of any sale and leaseback transaction
means, as of the time of determination, the total obligation (discounted to
present value at the average interest rate of the Notes and Debentures (weighted
in proportion to the aggregate principal amount of the Notes and Debentures
originally issued) compounded semiannually) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes as well as
maintenance, repairs, insurance, water rates and other items which do not
constitute payments for property rights) during the remaining portion of the
base term of the lease included in such sale and leaseback transaction.

          "Comparable Treasury Issue" means, with respect to the Notes or the
Debentures, as the case may be, the United States Treasury security selected by
a Quotation Agent as having a maturity comparable to the remaining term of such
Notes or Debentures, as the case may be, to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes or Debentures, as the case may be.

          "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such redemption date, as set forth in the 

                                       4
<PAGE>
 
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations or
(B) if the Company obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.

          "Consolidated Net Tangible Assets" of the Company means the aggregate
amount of assets (less applicable reserves and other properly deductible items)
after deducting therefrom (a) all current liabilities (excluding any
Indebtedness for money borrowed having a maturity of less than 12 months from
the date of the most recent consolidated balance sheet of the Company but which
by its terms is renewable or extendable beyond 12 months from such date at the
option of the borrower) and (b) all goodwill, trade names, patents, unamortized
debt discount and expense and any other like intangibles, all as set forth on
the most recent consolidated balance sheet of the Company and computed in
accordance with generally accepted accounting principles.

          "Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance or other security arrangement of any kind or nature whatsoever on or
with respect to such property or assets (including any conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing).

          "Principal Property" means any real property of the Company or any of
its subsidiaries, and any equipment located at or comprising a part of any such
real property, having a net book value, as of the date of determination, in
excess of the greater of $25 million and 5% of Consolidated Net Tangible Assets
of the Company.

          "Quotation Agent" means one of the Reference Treasury Dealers
appointed by the Company and certified to the Trustee by the Company.

          "Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Goldman, Sachs & Co. and BancAmerica Securities, Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer and certify same to the Trustee; and any other Primary
Treasury Dealer selected by the Company and certified to the Trustee by the
Company.

          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company and certified to the Trustee by the Company, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Company by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such redemption
date.

2.   Redemption and Offer to Purchase.

          Section 3.05 of the Indenture is hereby amended and restated in its
entirety as follows:

                                       5
<PAGE>
 
Section 3.05.  Deposit of Redemption Price.
------------   --------------------------- 

               (a) Prior to or on the redemption date, the Company shall deposit
with the Paying Agent for the Notes being redeemed (or if the Company or a
subsidiary or an Affiliate of the Company is the Paying Agent, shall segregate
and hold in trust) money sufficient to pay the redemption price of, and (except
if the redemption date shall be an interest payment date) accrued interest on,
all Notes to be redeemed on that date other than Notes or portions of Notes
called for redemption which prior thereto have been delivered by the Company to
the Trustee for cancellation. If such money is then held by the Company or a
subsidiary or an Affiliate of the Company in trust and is not required for such
purpose, it shall be discharged from such trust.

               (b) Prior to or on the redemption date, the Company shall deposit
with the Paying Agent for the Debentures being redeemed (or if the Company or a
subsidiary or an Affiliate of the Company is the Paying Agent, shall segregate
and hold in trust) money sufficient to pay the redemption price of, and (except
if the redemption date shall be an interest payment date) accrued interest on,
all Debentures to be redeemed on that date other than Debentures or portions of
Debentures called for redemption which prior thereto have been delivered by the
Company to the Trustee for cancellation. If such money is then held by the
Company or a subsidiary or an Affiliate of the Company in trust and is not
required for such purpose, it shall be discharged from such trust.

3.   Optional Redemption.

               The Indenture is hereby amended by adding a new Section 3.08 as
follows:

Section 3.08.  Optional Redemption.
------------   ------------------- 

               (a) The Notes are redeemable, in whole or in part, at the option
of the Company at any time at a redemption price equal to the greater of (i)
100% of the Principal Amount of Notes so redeemed or (ii) as determined by a
Quotation Agent, the sum of the present values of the remaining scheduled
payments of Principal and interest thereon discounted to the redemption date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus, in each case, accrued interest thereon to
the redemption date.

               (b) The Debentures are redeemable, in whole or in part, at the
option of the Company at any time at a redemption price equal to the greater of
(i) 100% of the Principal Amount of Debentures so redeemed or (ii) as determined
by a Quotation Agent, the sum of the present values of the remaining scheduled
payments of Principal and interest thereon discounted to the redemption date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus, in each case, accrued interest thereon to
the redemption date.

4.   Limitation on Liens.

               The Indenture is hereby amended by adding a new Section 4.08 as
follows:

Section 4.08.  Limitation on Liens.
------------   ------------------- 

               The Company will not, and will not permit any subsidiary to,
create, incur, issue, assume or guarantee any Indebtedness of the Company or any
subsidiary secured by a Lien upon any Principal Property, or upon shares of
capital stock or evidences of Indebtedness issued by any subsidiary which owns
or leases a Principal Property and which are owned by the Company or any

                                       6
<PAGE>
subsidiary (whether such Principal Property, shares or evidences of Indebted-
ness are now owned or are hereafter acquired by the Company), without making 
effective provision to secure all of the Notes and the Debentures then out-
standing by such Lien, equally and ratably with (or prior to) any and all 
other Indebtedness thereby secured, so long as such Indebtedness shall be so 
secured.

               The foregoing restrictions shall not apply, however, to: (a)
Liens existing on the date of original issuance of the Notes and the Debentures;
(b) Liens affecting property of a corporation or other entity existing at the
time it becomes a subsidiary of the Company or at the time it is merged into or
consolidated with the Company or a subsidiary of the Company; (c) Liens on
property existing at the time of acquisition thereof or incurred to secure
payment of all or a part of the purchase price thereof or to secure Indebtedness
incurred prior to, at the time of, or within 24 months after the acquisition for
the purpose of financing all or part of the purchase price thereof; (d) Liens on
any property to secure all or part of the cost of improvements or construction
thereon or Indebtedness incurred to provide funds for such purpose in a
principal amount not exceeding the cost of such improvements or construction;
(e) Liens which secure Indebtedness owing by a subsidiary of the Company to the
Company or to another subsidiary of the Company; (f) purchase money security
Liens on personal property; (g) Liens to secure Indebtedness of joint ventures
in which the Company or a subsidiary has an interest, to the extent such Liens
are solely on property or assets of, or equity interests in, such joint
ventures; (h) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political subdivision
thereof, to secure partial, progress, advance or other payments; and (i) any
extension, renewal, replacement or refunding of any Lien referred to in the
foregoing clauses (a) through (h), provided, however, that the aggregate
principal amount of Indebtedness secured thereby and not otherwise authorized by
the foregoing clauses shall not exceed the aggregate principal amount of
Indebtedness, plus any premium or fee payable in connection with any such
extension, renewal, replacement or refunding, so secured at the time of such
extension, renewal, replacement or refunding.

               Notwithstanding the foregoing, the Company and its subsidiaries
may create, incur, issue, assume or guarantee Indebtedness secured by Liens
without equally and ratably securing the Notes and the Debentures then
outstanding, provided, that at the time of such creation, incurrence, issuance,
assumption or guarantee, after giving effect thereto and to the retirement of
any Indebtedness which is concurrently being retired, the aggregate amount of
all outstanding Indebtedness secured by Liens so incurred (other than those
Liens permitted by the preceding paragraph), together with all outstanding
Attributable Value of all sale and leaseback transactions permitted by the last
paragraph of Section 4.09, does not exceed 15% of the Consolidated Net Tangible
Assets of the Company.

5.   Limitation on Sale and Leaseback Transactions.

               The Indenture is hereby amended by adding a new Section 4.09 as
follows:

Section 4.09.  Limitation on Sale and Leaseback Transactions.
------------   --------------------------------------------- 

               The Company will not, and will not permit any subsidiary to,
enter into any sale and leaseback transaction involving any Principal Property
unless the Company or such subsidiary shall apply, or cause to be applied, to
the retirement of its secured debt within 120 days after the effective date of
the sale and leaseback transaction, an amount not less than the greater of (i)
the net proceeds of the sale of the Principal Property leased pursuant to such
arrangement or (ii) the fair market value of the Principal Property so leased.
This restriction will not apply to a sale and leaseback transaction involving
the taking back of a lease for a period of less than three years.

                                       7
<PAGE>
 
               Notwithstanding the foregoing, the Company or any subsidiary may
enter into a sale and leaseback transaction, provided, that at the time of such
transaction, after giving effect thereto, the Attributable Value thereof,
together with all Indebtedness secured by Liens permitted pursuant to Section
4.08 (other than those Liens permitted by the second paragraph of Section 4.08,
and other than the Attributable Value of the sale and leaseback transactions
permitted by the preceding paragraph) does not exceed 15% of the Consolidated
Net Tangible Assets of the Company.

6.   Successor Corporation and Assignment.

               Section 5.01 of the Indenture is hereby amended and restated in
its entirety as follows:

Section 5.01.  When the Company May Merge, etc.
------------   --------------------------------

               The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets to,
another person unless:

                   (1)   the person formed by or surviving any such
     consolidation or merger (if other than the Company), or to which such
     disposition shall have been made, is a corporation organized and existing
     under the laws of the United States or any State thereof or the District of
     Columbia;

                   (2)   the person formed by or surviving any such
     consolidation or merger (if other than the Company), or to which such
     disposition shall have been made, assumes by supplemental indenture all of
     the obligations of the Company under the Notes, the Debentures and this
     Indenture;

                   (3)   immediately after the transaction no Default or Event
     of Default exists; and

                   (4)   if, as a result of the transaction, property of the
     Company would become subject to a Lien that would not be permitted under
     the limitation on Liens contained in Section 4.08, the Company takes such
     steps as shall be necessary to secure the Notes and the Debentures equally
     and ratably with (or prior to) the Indebtedness secured by such Lien.

The Company shall deliver to the Trustee for the Notes and the Debentures prior
to the consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture comply with the provisions of this Indenture
applicable to the Notes and the Debentures.

7.   Events of Default.

               Section 6.01 of the Indenture is hereby amended and restated in
its entirety as follows:

Section 6.01.  Events of Default.
------------   ----------------- 

               (a) An "Event of Default" occurs with respect to the Notes in the
event of any one of the following:

               (1) failure of the Company to pay (whether or not prohibited by
applicable subordination provisions, if any), interest for 30 days on, or the
Principal when due of, any Notes;

                                       8
<PAGE>
 
               (2) failure of the Company to comply with any of its other
agreements or covenants contained in the Notes or in this Indenture and
applicable to the Notes, and continuance of such Default for the period and
after the notice specified below;

               (3) failure to pay when due (after applicable grace periods as
provided in any applicable instrument governing such Indebtedness) the principal
of, or acceleration of, any Indebtedness for money borrowed by the Company
having an aggregate principal amount outstanding equal to at least $25,000,000,
if such Indebtedness is not discharged, or such acceleration is not annulled,
and the Default continues for the period and after the notice specified below;

               (4) entry of final judgments against the Company or any
subsidiary or subsidiaries of the Company which remain undischarged for a period
of 60 days, provided that the aggregate of all such judgments exceeds
$25,000,000 and the Default continues for the period and after the notice
specified below;

               (5) the Company, pursuant to or within the meaning of any
Bankruptcy Law:

                   (A)   commences a voluntary case,

                   (B)   consents to the entry of an order for relief against it
     in an involuntary case,

                   (C)   consents to the appointment of a Custodian of it or for
     all or substantially all of its property,

                   (D)   makes a general assignment for the benefit of its
     creditors, or

                   (E)   admits in writing its inability generally to pay
     its debts as the same become due;

               (6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

                   (A)   is for relief against the Company or any Material
     Subsidiary of the Company in an involuntary case,

                   (B)   appoints a Custodian of the Company for all or
     substantially all of the property of the Company or any Material Subsidiary
     of the Company, or

                   (C)   orders the liquidation of the Company, and the order or
     decree remains unstayed and in effect for 60 days; or

               (7) a revocation, suspension or involuntary loss of any Gaming
License by the Company or a subsidiary of the Company (after the same shall have
been obtained) which results in the cessation of operation of the business at a
Principal Property for a period of more than 90 consecutive days.

               The term "Bankruptcy Law" means any Federal or State bankruptcy,
insolvency, reorganization or other similar law.  The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

                                       9
<PAGE>
 
               A Default under clause (2) (other than a Default under Section
4.05, 4.07 or 5.01, each of which Default shall be an Event of Default without
the notice or passage of time specified in this paragraph) is not an Event of
Default until the Trustee or the Holders of at least 25% in Principal Amount of
the Notes then outstanding notify the Company of the Default and the Company
does not cure the Default or cause the Default to be cured within 30 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default."

               A Default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in Principal Amount of the Notes then
outstanding notify the Company of the Default and the Company has not caused
such Default to be cured or waived or such acceleration to be rescinded or
annulled within 30 days after receipt of the notice. The notice must specify the
Default, demand that it be rescinded or annulled and state that the notice is a
"Notice of Default."

               A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in Principal Amount of the Notes then
outstanding notify the Company of the Default and the Company does not cure the
Default or cause the Default to be cured within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."

               In the case of any Event of Default pursuant to the provisions of
this Section 6.01 occurring with respect to the Notes by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium which the Company would have
had to pay if the Company then had elected optionally to redeem the Notes, an
equivalent premium (or, in the event that the Company would not be permitted to
redeem the Notes optionally on such date, the premium payable on the first date
thereafter on which such redemption would be permissible) shall also become and
be immediately due and payable with respect to the Notes to the extent permitted
by law, anything in this Indenture, in the Notes contained to the contrary
notwithstanding.

               (b) An "Event of Default" occurs with respect to the Debentures
in the event of any one of the following:

               (1) failure of the Company to pay (whether or not prohibited by
applicable subordination provisions, if any), interest for 30 days on, or the
Principal when due of, any Debentures;

               (2) failure of the Company to comply with any of its other
agreements or covenants contained in the Debentures or in this Indenture and
applicable to the Debentures, and continuance of such Default for the period and
after the notice specified below;

               (3) failure to pay when due (after applicable grace periods as
provided in any applicable instrument governing such Indebtedness) the principal
of, or acceleration of, any Indebtedness for money borrowed by the Company
having an aggregate principal amount outstanding equal to at least $25,000,000,
if such Indebtedness is not discharged, or such acceleration is not annulled,
and the Default continues for the period and after the notice specified below;

               (4) entry of final judgments against the Company or any
subsidiary or subsidiaries of the Company which remain undischarged for a 
period of 60 days, provided that the aggregate of all such judgments exceeds 

                                      10
<PAGE>
$25,000,000 and the Default continues for the period and after the notice 
specified below;
                
               (5) the Company, pursuant to or within the meaning of any
Bankruptcy Law:

                   (A) commences a voluntary case,

                   (B) consents to the entry of an order for relief against it
     in an involuntary case,

                   (C) consents to the appointment of a Custodian of it or for
     all or substantially all of its property,

                   (D) makes a general assignment for the benefit of its
     creditors, or

                   (E) admits in writing its inability generally to pay its
     debts as the same become due;

               (6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

                   (A) is for relief against the Company or any Material
     Subsidiary of the Company in an involuntary case,

                   (B) appoints a Custodian of the Company for all or
     substantially all of the property of the Company or any Material Subsidiary
     of the Company, or

                   (C) orders the liquidation of the Company, and the order or
     decree remains unstayed and in effect for 60 days; or

               (7) a revocation, suspension or involuntary loss of any Gaming
License by the Company or a subsidiary of the Company (after the same shall have
been obtained) which results in the cessation of operation of the business at a
Principal Property for a period of more than 90 consecutive days.

               The term "Bankruptcy Law" means any Federal or State bankruptcy,
insolvency, reorganization or other similar law.  The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

               A Default under clause (2) (other than a Default under Section
4.05, 4.07 or 5.01, each of which Default shall be an Event of Default without
the notice or passage of time specified in this paragraph) is not an Event of
Default until the Trustee or the Holders of at least 25% in Principal Amount of
the Debentures then outstanding notify the Company of the Default and the
Company does not cure the Default or cause the Default to be cured within 30
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default."

               A Default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in Principal Amount of the Debentures
then outstanding notify the Company of the Default and the Company has not
caused such Default to be cured or waived or such acceleration 

                                       11
<PAGE>
 
to be rescinded or annulled within 30 days after receipt of the notice. The
notice must specify the Default, demand that it be rescinded or annulled and
state that the notice is a "Notice of Default."

               A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in Principal Amount of the Debentures
then outstanding notify the Company of the Default and the Company does not cure
the Default or cause the Default to be cured within 60 days after receipt
of the notice.  The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default."

               In the case of any Event of Default pursuant to the provisions of
this Section 6.01 occurring with respect to the Debentures by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium which the Company would
have had to pay if the Company then had elected optionally to redeem the
Debentures, an equivalent premium (or, in the event that the Company would not
be permitted to redeem the Debentures optionally on such date, the premium
payable on the first date thereafter on which such redemption would be
permissible) shall also become and be immediately due and payable with respect
to the Debentures to the extent permitted by law, anything in this Indenture, in
the Debentures contained to the contrary notwithstanding.

                          [Signature page to follow]

                                       12
<PAGE>
 
          IN WITNESS WHEREOF, the Company and the Trustee have executed this
Supplemental Indenture and have caused their names to be signed hereto by their
respective officers thereunto duly authorized, all as of the day and year first
above written.


Dated:  As of August 1, 1997    MIRAGE RESORTS, INCORPORATED



Attest:                                By: STEPHEN A. WYNN 
                                           ------------------------------     
                                           Stephen A. Wynn                    
                                           Chairman of the Board, President and
                                           Chief Executive Officer
BRUCE A. LEVIN
---------------------------                            
Bruce A. Levin                                                                
Secretary                              By: DANIEL R. LEE
                                           -------------------------------    
                                           Daniel R. Lee                      
                                           Senior Vice President - Finance    
                                           and Development, Chief Financial   
                                           Officer and Treasurer               

                                    (SEAL)



Dated:  As of August 1, 1997           FIRST SECURITY BANK,
                                       NATIONAL ASSOCIATION    



                                       By: FRANCINE SCHARTZ
                                           --------------------------------
                                           Francine Schartz               
                                           Vice President                  

                                    (SEAL)


                                     S-1
<PAGE>
                                   EXHIBIT A


                                                        CUSIP No. 60462EAD6

          This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be exchanged in whole or in part for a
Security registered, and no transfer of this Security in whole or in part may be
registered, in the name of any person other than such Depositary or a nominee
thereof, except in the limited circumstances described in the Indenture.

          Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Mirage
Resorts, Incorporated, or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

                          MIRAGE RESORTS, INCORPORATED

                         6.75% Note Due August 1, 2007

No. A-1                                                        $________________

          MIRAGE RESORTS, INCORPORATED, a corporation duly organized and
existing under the laws of the State of Nevada (herein called the "Company,"
which term includes any successor to the Company under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the Principal sum of ______________ Dollars
($______________) on August 1, 2007 and to pay interest thereon from August 5,
1997 or from the most recent interest payment date to which interest has been
paid or duly provided for, semiannually in arrears on February 1 and August 1 in
each year, commencing February 1, 1998, at the rate of 6.75% per annum, until
the Principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any interest payment date
will, as provided in such Indenture, be paid to the person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest, which shall be January 15
or July 15 (whether or not a Business Day), as the case may be, next preceding
such interest payment date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such regular
record date and may either be paid to the person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
special record date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be mailed to Holders of the Securities not
less than 10 days prior to such special record date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. Interest on the Securities shall be computed on the basis of a 360-
day year of twelve 30-day months.
                                     A-1 
<PAGE>
 
          Payment of the Principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the person entitled thereto as such address shall
appear in the register for the Securities.

          Reference is hereby made to the further provisions of this Security
set forth on pages A-4 to A-9 following the signature page hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the pages following the signature page hereof by
manual signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

                           [Signature Page to Follow]

                                     A-2
<PAGE>
 
        In Witness Whereof, the Company has caused this instrument to be duly
executed.

                                        MIRAGE RESORTS, INCORPORATED


                                        By
                                           -----------------------------------
                                           Stephen A. Wynn
                                           Chairman of the Board, President and
                                           Chief Executive Officer


                                        By
                                           -----------------------------------
                                           Daniel R. Lee
                                           Senior Vice President -
                                           Finance and Development,
                                           Chief Financial Officer and Treasurer



Attest:

--------------------------
Bruce A. Levin
Secretary


                         CERTIFICATE OF AUTHENTICATION

        This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.


Dated:                                         FIRST SECURITY BANK,
                                               NATIONAL ASSOCIATION
                                                                      As Trustee


                                               By
                                                   ------------------------

                                                   ------------------------
                                                   Authorized Signatory


                                     A-3
<PAGE>
 
          This Security is one of a duly authorized series of securities of the
Company (herein called the "Securities"), issued under an Indenture, dated as of
August 1, 1997, as amended by a Supplemental Indenture, dated as of August 1,
1997 (as so amended, the "Indenture"), each between the Company and First
Security Bank, National Association, as Trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.  The Securities are
subject to, and qualified by, all of the terms of the Indenture.  This Security
is one of the series designated on the face hereof, limited in aggregate
Principal Amount to $200,000,000.  The Securities are general obligations of the
Company.

          The Securities are subject to redemption upon not less than 30 days'
nor more than 60 days' notice by first class mail, in whole or in part, at the
option of the Company at any time at a redemption price equal to the greater of
(i) 100% of the Principal Amount of the Securities so redeemed or (ii) as
determined by a Quotation Agent, the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued
interest thereon to the redemption date.

          "Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.20%.

          "Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Security to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Security.

          "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Company obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.

          "Quotation Agent" means one of the Reference Treasury Dealers
appointed by the Company and certified to the Trustee by the Company.

          "Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., BancAmerica Securities, Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer and certify same to the Trustee; and any other Primary
Treasury Dealer selected by the Company and certified to the Trustee by the
Company.

                                     A-4
<PAGE>
 
          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company and certified to the Trustee by the Company, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Company by such
Treasury Reference Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date.

          In the event of redemption of this Security in part only, a new
Security or Securities of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.

          Notwithstanding any other provision of Article 3 of the Indenture, if
any Gaming Authority requires that a Holder or beneficial owner of Securities of
a Holder must be licensed, qualified or found suitable under any Gaming Law,
such Holder or such beneficial owner shall apply for a license, qualification or
a finding of suitability, as the case may be, within the required time period.
If such person fails to apply or become licensed or qualified or is not found
suitable (in each case, a "failure of compliance"), the Company shall have the
right, at its option, (i) to require such Holder or owner to dispose of such
Holder's or owner's Securities within 30 days of receipt of notice of the
Company's election or such earlier date as may be requested or prescribed by
such Gaming Authority, or (ii) to redeem within such 30-day or earlier period
requested or prescribed by such Gaming Authority the Securities of such Holder
or owner at a redemption price equal to the lesser of (A) 100% of the Principal
Amount thereof or (B) the price at which such Holder or owner acquired the
Securities, together, in either case, with accrued interest to the earlier of
the redemption date or the date of the failure of compliance, which may be less
than 30 days following the notice of redemption if so requested or prescribed by
such Gaming Authority.  The Company shall notify the Trustee in writing of any
such redemption as soon as practicable.  The Company shall not be responsible
for any costs or expenses any such Holder or owner may incur in connection with
its application for a license, qualification or finding of suitability.

          If there is a Change in Control (the time of a Change in Control being
referred to as the "Change in Control Date"), then the Company shall (a)
commence, within five Business Days following the Change in Control Date, an
offer to repurchase (the "Repurchase Offer") all of the outstanding Securities
at a repurchase price (the "Repurchase Price") in cash equal to 101% of the
Principal Amount of the Securities plus accrued interest, if any, to the
Repurchase Date (as defined below) and (b) deposit with the Paying Agent an
amount equal to the aggregate Repurchase Price for all Securities then
outstanding so as to be available for payment to the Holders of Securities who
elect to require the Company to repurchase all or a portion of their Securities.

          If the Repurchase Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest will be
paid to the person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Repurchase Offer.

          Notice of any Repurchase Offer shall be mailed by the Company to the
Trustee and the Holders of the Securities at their last registered addresses.
The Repurchase Offer shall remain open from the time of mailing until 10
Business Days thereafter, and no longer, unless a longer period is required by
law or stock exchange rule or unless a majority of the Continuing Directors of
the Company votes in favor of extending such period (the date on which the
Repurchase Offer closes being the "Repurchase Date").  The notice shall contain
all instructions and materials necessary to enable such Holders to tender
Securities pursuant to the Repurchase Offer.  The notice, which shall govern the
terms of the Repurchase Offer, shall state:

                                     A-5
<PAGE>
 
          (1) that the Repurchase Offer is being made pursuant to Section 4.07
of the Indenture and that Securities will be accepted for payment either (A) in
whole or (B) in part in integral multiples of $1,000;

          (2) the Repurchase Price and the Repurchase Date;

          (3) that any Security not tendered will continue to accrue interest;

          (4) that any Security accepted for payment pursuant to the Repurchase
Offer shall cease to accrue interest from and after the Repurchase Date;

          (5) that Holders electing to have a Security purchased pursuant to the
Repurchase Offer will be required to surrender the Security, with the form
entitled "Option to Elect Purchase" on the Security completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the Repurchase Date;

          (6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than three Business Days before the Repurchase
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the Principal Amount of Securities the Holder delivered for
purchase and a statement that the Holder is withdrawing his election to have
such Securities purchased; and

          (7) that Holders whose Securities are purchased only in part will be
issued new Securities equal in Principal Amount to the unpurchased portion of
the Securities surrendered.

          On the Repurchase Date, the Company shall, to the extent lawful, (i)
accept for payment Securities or portions thereof tendered pursuant to the
Repurchase Offer; and (ii) deliver to the Trustee the Securities so tendered,
together with an Officers' Certificate identifying the Securities or portions
thereof so accepted for payment by the Company.  The Paying Agent shall promptly
mail or deliver to Holders of the Securities so accepted payment in an amount
equal to the Repurchase Price.  The Trustee shall promptly authenticate and mail
or deliver to each Holder who tendered a Security a new Security or Securities
equal in Principal Amount to any untendered portion of the Security surrendered.
The Paying Agent shall invest funds deposited with it pursuant to Section 4.07
of the Indenture for the benefit of, and at the written direction of, the
Company to the Repurchase Date.

          "Board of Directors" or "Board" means the Board of Directors or any
authorized committee of the Board of Directors of the Company, or a Consolidated
Subsidiary thereof, as the context may indicate.

          "Capital Stock" of any person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock and
any and all forms of partnership interests or other equity interests in a
person, including but not limited to any type of preference stock which for
other purposes may not be treated as equity.

          "Change in Control" means (i) the time the Company first determines
that any person or group, within the meaning of Section 14(d)(2) of the Exchange
Act (other than any person who was at the date of the Indenture an officer or
director of the Company or a group consisting of persons who were at the date of
the Indenture officers or directors of the Company) have acquired direct or
indirect beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of 35% or more of the outstanding voting Capital Stock of the
Company, unless a majority of the Continuing Directors approves

                                     A-6
<PAGE>
 
the acquisition not later than 10 business days after the Company makes the
determination, or (ii) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.

          "Consolidated Subsidiary" of any specific person means any subsidiary,
all of whose voting Capital Stock (other than the minimum required number of
directors' qualifying shares) are owned by such person and/or by another
Consolidated Subsidiary of such person, and the accounts of which are, or under
generally accepted accounting principles are required to be, consolidated with
the accounts of such person.

          "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of that
Board of Directors on the date of the Indenture, (ii) had been a member of that
Board of Directors for the two years immediately preceding such date of
determination or (iii) was nominated for election or elected to that Board of
Directors with the affirmative vote of the greater of (x) a majority of
Continuing Directors who were members of that Board at the time of such
nomination or election or (y) at least three Continuing Directors.

          The Indenture contains provisions for defeasance of the entire
Indebtedness of this Security or certain restrictive covenants with respect to
this Security, in each case upon compliance with certain conditions set forth in
the Indenture.

          If an Event of Default with respect to the Securities shall occur and
be continuing, the Principal of the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in Principal Amount of the Securities at the time outstanding.  The
Indenture also contains provisions permitting the Holders of specified
percentages in Principal Amount of the Securities at the time outstanding, on
behalf of the Holders of all such Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.  The right of any Holder (or such
Holder's duly designated proxy) to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of
Securities as of a date set by the Company and identified by the Trustee in a
notice furnished to Holders in accordance with the terms of the Indenture.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in Principal Amount of the
Securities at the time outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in Principal Amount of the Securities at
the time outstanding a direction inconsistent with
 
                                     A-7 
<PAGE>
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of Principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the register
for the Securities, upon surrender of this Security for transfer at the office
or agency of the Company in any place where the Principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of like tenor,
of authorized denominations and for the same aggregate Principal Amount, will be
issued to the designated transferee or transferees.

          The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate Principal Amount of Securities of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.

          No service charge shall be made for any such transfer or exchange, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

          Prior to due presentment of this Security for transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

          No past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company or any successor corporation shall have
any liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  Each Securityholder by accepting a Security
waives and releases all such liability.  The waiver and release are part of the
consideration for the issue of the Securities.

          All terms used in this Security without definition which are defined
in the Indenture shall have the meanings assigned to them in the Indenture.

          THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA.

                                     A-8
<PAGE>
                            Option to Elect Purchase

          The undersigned registered Holder of this Security hereby irrevocably
exercises the option to require the Company to repurchase this Security or
portion thereof (which is $1,000 or an integral multiple thereof) below
designated on the Repurchase Date and in accordance with the terms set forth in
the notice of Repurchase Offer distributed by the Company in accordance with the
terms of this Security, and directs that payment be made to the registered
Holder hereof unless a different name has been indicated below.  Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.

Dated: 
        -------------------


Signature(s) must be                    Holder's Signature:
guaranteed if payment is to be
made other than to and in the name
of the registered Holder                ---------------------------------


Signature Guarante                      Portion of Security to be repurchased
                                        (in integral multiples of $1,000) if
---------------------------------       other than the full Principal Amount
                                        thereof:
Fill in for payment of Repurchase
Price if to be made otherwise than      ----------------------------------
to the registered Holder


---------------------------------   
Name

---------------------------------       
Address

---------------------------------

Please print name and address
(including zip code)

SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION NUMBER

---------------------------------

                                     A-9
<PAGE>
                                   EXHIBIT B



                                                             CUSIP No. 60462EAE4

          This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be exchanged in whole or in part for a
Security registered, and no transfer of this Security in whole or in part may be
registered, in the name of any person other than such Depositary or a nominee
thereof, except in the limited circumstances described in the Indenture.

          Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Mirage
Resorts, Incorporated, or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

                          MIRAGE RESORTS, INCORPORATED

                       7.25% Debenture Due August 1, 2017

No. B-1                                                         $100,000,000

          MIRAGE RESORTS, INCORPORATED, a corporation duly organized and
existing under the laws of the State of Nevada (herein called the "Company,"
which term includes any successor to the Company under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the Principal sum of One Hundred Million Dollars
($100,000,000) on August 1, 2017 and to pay interest thereon from August 5, 1997
or from the most recent interest payment date to which interest has been paid or
duly provided for, semiannually in arrears on February 1 and August 1 in each
year, commencing February 1, 1998, at the rate of 7.25% per annum, until the
Principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any interest payment date will, as
provided in such Indenture, be paid to the person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the regular record date for such interest, which shall be January 15 or July
15 (whether or not a Business Day), as the case may be, next preceding such
interest payment date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such regular record date
and may either be paid to the person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a special
record date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be mailed to Holders of the Securities not less
than 10 days prior to such special record date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. Interest on the Securities shall be computed on the basis of a 360-
day year of twelve 30-day months.

                                     B-1
<PAGE>
 
          Payment of the Principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the person entitled thereto as such address shall
appear in the register for the Securities.

          Reference is hereby made to the further provisions of this Security
set forth on pages B-4 to B-9 following the signature page hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the pages following the signature page hereof by
manual signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

                           [Signature Page to Follow]
 

                                     B-2
<PAGE>
 
          In Witness Whereof, the Company has caused this instrument to be duly
executed.

                                       MIRAGE RESORTS, INCORPORATED


                                       By
                                         ---------------------------------------
                                         Stephen A. Wynn
                                         Chairman of the Board, President and
                                         Chief Executive Officer



                                       By
                                         ---------------------------------------
                                         Daniel R. Lee
                                         Senior Vice President -
                                         Finance and Development,
                                         Chief Financial Officer and Treasurer



Attest:


--------------------------------
Bruce A. Levin
Secretary


                         CERTIFICATE OF AUTHENTICATION

          This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

Dated:                                 FIRST SECURITY BANK,
                                       NATIONAL ASSOCIATION
                                                          As Trustee


                                       By
                                         ---------------------------------------
                                         Authorized Signatory

                                     B-3
<PAGE>
 
          This Security is one of a duly authorized series of securities of the
Company (herein called the "Securities"), issued under an Indenture, dated as of
August 1, 1997, as amended by a Supplemental Indenture, dated as of August 1,
1997 (as so amended, the "Indenture"), each between the Company and First
Security Bank, National Association, as Trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.  The Securities are
subject to, and qualified by, all of the terms of the Indenture.  This Security
is one of the series designated on the face hereof, limited in aggregate
Principal Amount to $100,000,000.  The Securities are general obligations of the
Company.

          The Securities are subject to redemption upon not less than 30 days'
nor more than 60 days' notice by first class mail, in whole or in part, at the
option of the Company at any time at a redemption price equal to the greater of
(i) 100% of the Principal Amount of the Securities so redeemed or (ii) as
determined by a Quotation Agent, the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued
interest thereon to the redemption date.

          "Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.25%.

          "Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Security to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Security.

          "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Company obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.

          "Quotation Agent" means one of the Reference Treasury Dealers
appointed by the Company and certified to the Trustee by the Company.

          "Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., BancAmerica Securities, Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer and certify same to the Trustee; and any other Primary
Treasury Dealer selected by the Company and certified to the Trustee by the
Company.

                                     B-4
<PAGE>
          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company and certified to the Trustee by the Company, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Company by such
Treasury Reference Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date.

          In the event of redemption of this Security in part only, a new
Security or Securities of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.

          Notwithstanding any other provision of Article 3 of the Indenture, if
any Gaming Authority requires that a Holder or beneficial owner of Securities of
a Holder must be licensed, qualified or found suitable under any Gaming Law,
such Holder or such beneficial owner shall apply for a license, qualification or
a finding of suitability, as the case may be, within the required time period.
If such person fails to apply or become licensed or qualified or is not found
suitable (in each case, a "failure of compliance"), the Company shall have the
right, at its option, (i) to require such Holder or owner to dispose of such
Holder's or owner's Securities within 30 days of receipt of notice of the
Company's election or such earlier date as may be requested or prescribed by
such Gaming Authority, or (ii) to redeem within such 30-day or earlier period
requested or prescribed by such Gaming Authority the Securities of such Holder
or owner at a redemption price equal to the lesser of (A) 100% of the Principal
Amount thereof or (B) the price at which such Holder or owner acquired the
Securities, together, in either case, with accrued interest to the earlier of
the redemption date or the date of the failure of compliance, which may be less
than 30 days following the notice of redemption if so requested or prescribed by
such Gaming Authority.  The Company shall notify the Trustee in writing of any
such redemption as soon as practicable.  The Company shall not be responsible
for any costs or expenses any such Holder or owner may incur in connection with
its application for a license, qualification or finding of suitability.

          If there is a Change in Control (the time of a Change in Control being
referred to as the "Change in Control Date"), then the Company shall (a)
commence, within five Business Days following the Change in Control Date, an
offer to repurchase (the "Repurchase Offer") all of the outstanding Securities
at a repurchase price (the "Repurchase Price") in cash equal to 101% of the
Principal Amount of the Securities plus accrued interest, if any, to the
Repurchase Date (as defined below) and (b) deposit with the Paying Agent an
amount equal to the aggregate Repurchase Price for all Securities then
outstanding so as to be available for payment to the Holders of Securities who
elect to require the Company to repurchase all or a portion of their Securities.

          If the Repurchase Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest will be
paid to the person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Repurchase Offer.

          Notice of any Repurchase Offer shall be mailed by the Company to the
Trustee and the Holders of the Securities at their last registered addresses.
The Repurchase Offer shall remain open from the time of mailing until 10
Business Days thereafter, and no longer, unless a longer period is required by
law or stock exchange rule or unless a majority of the Continuing Directors of
the Company votes in favor of extending such period (the date on which the
Repurchase Offer closes being the "Repurchase Date").  The notice shall contain
all instructions and materials necessary to enable such Holders to tender
Securities pursuant to the Repurchase Offer.  The notice, which shall govern the
terms of the Repurchase Offer, shall state:

                                     B-5
<PAGE>
          (1) that the Repurchase Offer is being made pursuant to Section 4.07
of the Indenture and that Securities will be accepted for payment either (A) in
whole or (B) in part in integral multiples of $1,000;

          (2) the Repurchase Price and the Repurchase Date;

          (3) that any Security not tendered will continue to accrue interest;

          (4) that any Security accepted for payment pursuant to the Repurchase
Offer shall cease to accrue interest from and after the Repurchase Date;

          (5) that Holders electing to have a Security purchased pursuant to the
Repurchase Offer will be required to surrender the Security, with the form
entitled "Option to Elect Purchase" on the Security completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the Repurchase Date;

          (6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than three Business Days before the Repurchase
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the Principal Amount of Securities the Holder delivered for
purchase and a statement that the Holder is withdrawing his election to have
such Securities purchased; and

          (7) that Holders whose Securities are purchased only in part will be
issued new Securities equal in Principal Amount to the unpurchased portion of
the Securities surrendered.

          On the Repurchase Date, the Company shall, to the extent lawful, (i)
accept for payment Securities or portions thereof tendered pursuant to the
Repurchase Offer; and (ii) deliver to the Trustee the Securities so tendered,
together with an Officers' Certificate identifying the Securities or portions
thereof so accepted for payment by the Company.  The Paying Agent shall promptly
mail or deliver to Holders of the Securities so accepted payment in an amount
equal to the Repurchase Price.  The Trustee shall promptly authenticate and mail
or deliver to each Holder who tendered a Security a new Security or Securities
equal in Principal Amount to any untendered portion of the Security surrendered.
The Paying Agent shall invest funds deposited with it pursuant to Section 4.07
of the Indenture for the benefit of, and at the written direction of, the
Company to the Repurchase Date.

          "Board of Directors" or "Board" means the Board of Directors or any
authorized committee of the Board of Directors of the Company, or a Consolidated
Subsidiary thereof, as the context may indicate.

          "Capital Stock" of any person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock and
any and all forms of partnership interests or other equity interests in a
person, including but not limited to any type of preference stock which for
other purposes may not be treated as equity.

          "Change in Control" means (i) the time the Company first determines
that any person or group, within the meaning of Section 14(d)(2) of the Exchange
Act (other than any person who was at the date of the Indenture an officer or
director of the Company or a group consisting of persons who were at the date of
the Indenture officers or directors of the Company) have acquired direct or
indirect beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of 35% or more of the outstanding voting Capital Stock of the
Company, unless a majority of the Continuing Directors approves

                                     B-6
<PAGE>
the acquisition not later than 10 business days after the Company makes the
determination, or (ii) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.

          "Consolidated Subsidiary" of any specific person means any subsidiary,
all of whose voting Capital Stock (other than the minimum required number of
directors' qualifying shares) are owned by such person and/or by another
Consolidated Subsidiary of such person, and the accounts of which are, or under
generally accepted accounting principles are required to be, consolidated with
the accounts of such person.

          "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of that
Board of Directors on the date of the Indenture, (ii) had been a member of that
Board of Directors for the two years immediately preceding such date of
determination or (iii) was nominated for election or elected to that Board of
Directors with the affirmative vote of the greater of (x) a majority of
Continuing Directors who were members of that Board at the time of such
nomination or election or (y) at least three Continuing Directors.

          The Indenture contains provisions for defeasance of the entire
Indebtedness of this Security or certain restrictive covenants with respect to
this Security, in each case upon compliance with certain conditions set forth in
the Indenture.

          If an Event of Default with respect to the Securities shall occur and
be continuing, the Principal of the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in Principal Amount of the Securities at the time outstanding.  The
Indenture also contains provisions permitting the Holders of specified
percentages in Principal Amount of the Securities at the time outstanding, on
behalf of the Holders of all such Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.  The right of any Holder (or such
Holder's duly designated proxy) to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of
Securities as of a date set by the Company and identified by the Trustee in a
notice furnished to Holders in accordance with the terms of the Indenture.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in Principal Amount of the
Securities at the time outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in Principal Amount of the Securities at
the time outstanding a direction inconsistent with

                                     B-7
<PAGE>
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of Principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the register
for the Securities, upon surrender of this Security for transfer at the office
or agency of the Company in any place where the Principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of like tenor,
of authorized denominations and for the same aggregate Principal Amount, will be
issued to the designated transferee or transferees.

          The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate Principal Amount of Securities of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.

          No service charge shall be made for any such transfer or exchange, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

          Prior to due presentment of this Security for transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

          No past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company or any successor corporation shall have
any liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  Each Securityholder by accepting a Security
waives and releases all such liability.  The waiver and release are part of the
consideration for the issue of the Securities.

          All terms used in this Security without definition which are defined
in the Indenture shall have the meanings assigned to them in the Indenture.

          THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA.

                                     B-8
<PAGE>
                           Option to Elect Purchase

          The undersigned registered Holder of this Security hereby irrevocably
exercises the option to require the Company to repurchase this Security or
portion thereof (which is $1,000 or an integral multiple thereof) below
designated on the Repurchase Date and in accordance with the terms set forth in
the notice of Repurchase Offer distributed by the Company in accordance with the
terms of this Security, and directs that payment be made to the registered
Holder hereof unless a different name has been indicated below.  Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.

Dated:  
        ----------------


Signature(s) must be                        Holder's Signature:
guaranteed if payment is to be
made other than to and in the name
of the registered Holder           
                                            --------------------------------

------------------------------------        Portion of Security to be 
Signature Guarantee                         repurchased (in integral multiples 
                                            of $1,000) if other than the full 
Fill in for payment of Repurchase           Principal Amount thereof:
Price if to be made otherwise than  
to the registered Holder                    --------------------------------
                                    


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Name

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Address

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Please print name and address
(including zip code)

SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION NUMBER


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                                     B-9